LIKE many industries, the tyre industry has come under intense pressure from low cost Far East manufacturers. In many ways Semperit's problems are similar to those, which closed the Packard Electric plant earlier this year.
That plant, which closed with the loss of 800 jobs, fell victim to low wage economics, such as that in Portugal. Despite harsh cuts and more productivity, the company's parent still felt the Tallaght plant was uneconomical.
But in Semperit's case, although car sales are booming in Ireland, there is a general downturn in car and truck sales in Europe. Sources said this factor, coupled with the decline in the value of sterling, damaged the Ballyfermot plant.
The threat to Semperit has been talked about in the industry for months, if not years. It is the only tyre manufacturer in Ireland, producing 3.3 million tyres annually.
A key problem is that low wage countries such as Korea, China and Indonesia are flooding Europe with good quality tyres. The tyres carry an "E" mark conform to EU standards and are cheaper.
"All the ingredients for tyres have to be imported," said an industry source, "so what you are really adding in Ireland is labour and energy costs."
Labour cost's are higher in Ireland and although the Irish market is growing, much of the product is for export.
Sources say leading brand name tyre manufactures such as, Dunlop, Bridgestone and Michelin are being forced to compete by producing low margin economy tyres for the Irish and European market.
"If you go into a garage you, will pay anything from £24 to £35, plus VAT for a standard tyre,"said one source. "Irish motorists now want good economy tyres."
Trade sources estimated that" the "majors" Semperit, Dunlop, Michelin hold 60 per cent of the Irish tyre market, while 40 per cent is held by manufacturers from outside Europe.