The Japanese multinational Yazaki, a leading manufacturer of automotive components, has announced the closure of its two plants in Uruguay. The company will relocate its operations to Argentina and Paraguay due to competitiveness challenges and adverse union measures.
Japanese Auto Parts Manufacturer Expands in Argentina
Yazaki, which supplies wire harnesses and dashboard components to the automotive industry, counts Toyota as its main customer in Argentina. With the country’s recent economic shift, Argentina has become an attractive destination for the automotive sector, particularly as companies seek cost-effective production alternatives in a competitive global market.
As part of its strategic restructuring, Yazaki aims to strengthen its presence in Latin America and leverage the region’s lower production costs. The company’s facilities in Argentina and Paraguay will play a crucial role in meeting the growing demand for automotive components in the region.
A Strategic Shift
Yazaki, which has operated in Uruguay since 2007, officially informed its employees and local authorities that its factories in Las Piedras and Colonia, both in the southern part of the country, will shut down by January 30. The closure affects approximately 1,200 workers.
The decision to shift operations stems from cost disparities between Uruguay and neighboring countries. The company noted that operating in Uruguay was between 20% and 25% more expensive than in Argentina and Paraguay. These higher costs, coupled with frequent production stoppages due to union actions, jeopardized Yazaki’s ability to meet delivery commitments to its customers.
“The decision is based on the high production costs in Uruguay, which significantly affect the company’s ability to compete in global markets, as well as the constant work stoppages imposed by the union, which threaten Yazaki’s ability to deliver products on time,” the company stated in an official announcement.
Support for Displaced Workers
Following Yazaki’s decision, Uruguay’s Minister of Labor, Mario Arizti, has called for a dialogue table with the company and the union. The goal is to facilitate the reintegration of the 1,100 affected workers into the labor market.
Yazaki’s Presence in Argentina
Yazaki operates a plant in Escobar, located in the northern region of Greater Buenos Aires. The expansion of production in Argentina aligns with the broader trend of the automotive industry seeking more competitive manufacturing environments within Latin America.
With this shift, Yazaki aims to maintain its competitive edge and continue supplying high-quality automotive components to its clients, while adapting to the evolving economic landscape in the region.