Fate Tire Factory Closes After 85 Years, Laying Off 925 Employees Amid Milei’s Controversial Labor Reform

Original article: Caso testigo de la crisis del modelo Milei: cierra fábrica de neumáticos tras 85 años y despiden a 925 personas

Amid the ongoing vote in Argentina’s Chamber of Deputies concerning the controversial labor reform pushed by Javier Milei, Fate—a tire manufacturing company with over 95 years of history—was forced to shut down, laying off 925 workers.

Displaced Fate workers, along with representatives from the Confederation of Workers of Education of the Republic of Argentina (CTERA), and various labor and social organizations, blocked the Pan-American Highway near the Buenos Aires locality of Virreyes on Thursday.

The protesters organized this action amid broader mobilizations and a general strike called by the General Confederation of Labor (CGT) in opposition to the contentious labor reform that is being deliberated in the Chamber of Deputies.

According to Página/12, National Gendarmerie personnel arrived at the scene, threatening to implement anti-protest protocols to remove them.

The tire factory, closing its doors after 85 years, has profoundly impacted the economy and workforce.

Argentina’s industrial landscape faced a bleak chapter on Wednesday. After 85 years of continuous operation and surviving the nation’s most devastating crises—including hyperinflation, the Menem era, the 2001 economic collapse, and the government of Mauricio Macri—Fate, dedicated to tire production, shuttered its sole factory in Virreyes and terminated the contracts of 925 employees, highlighting the detrimental effects of the libertarian economic model adopted by Milei.

The shockwave of this closure was so severe that even officials from the Casa Rosada rushed to distance themselves from the scandal. According to reports, the government’s strategy involved blaming the union and weaving elaborate «political conspiracies.» Concurrently, the Ministry of Human Capital imposed a mandatory mediation for 15 days «without even assessing the situation» at the plant.

The news struck workers like a cold shower. At 6 AM on Wednesday, returning employees found a notice announcing the unimaginable: the Madanes Quintanilla family’s company was permanently closing its doors.

Since January 26, the factory had been under an extended technical stoppage. The consumption crisis affecting Argentina’s economy under the libertarian administration turned 14 days of shutdown into a complete month. The situation was already critical: by 2024, the company had filed a Preventive Crisis notice and had cut its workforce in half, which once peaked at 2,000 employees.

The Influx of Imported Tires

The factory’s closure reflects a recurring issue in several industrial sectors across Argentina. The influx of Chinese-manufactured tires has devastated local industry, particularly companies like Fate, which now faces a staggering 75% share of imported tires in the Argentine market.

Specifically, the closed plant had been producing 150,000 tires monthly, which represented only 25% of its normal production capacity. For instance, truck tire production declined from 2,000 daily to just 500.

The statistics surrounding imports make the closure understandable. According to Página/12, tire imports from 2023 to 2025, under the commercial opening favored by Milei’s administration, increased by an average of 34.8%. This situation triggered price reductions of 38.3% in dollars and 42.6% in Argentine pesos, as reported by consultant PxQ.

Fate workers, who spoke with the digital medium, expressed uncertainty about their future since the company’s decision, as they confirmed, is not to reopen.

While they understood the economic context prompted this decision, they noted daily operations indicated a stable company.

«You entered and saw stocked materials, well-maintained machines, and others under repair,» they shared, blending disbelief with resignation.

What Did the ‘Libertarian’ Government Do to Prevent the Factory’s Closure?

The response from Casa Rosada was swift, albeit paradoxical.

«The Ministry of Human Capital, through the Secretary of Labor, Employment and Social Security, announces that mandatory mediation has been enacted in the conflict between FATE S.A.I.C.I. and the Argentine Tire Workers Union (SUTNA) for a period of fifteen (15) days, as per existing regulations,» the Milei administration stated, underscoring its engagement with the struggling company.

The official communication addressed the employment crisis at Fate but neglected to clarify what measures the libertarian administration implemented to prevent the factory from closing.

«The Ministry of Human Capital will continue to promote necessary mediation processes to safeguard employment and compliance with labor and social security regulations,» the department claimed, attempting to show concern that has yet to manifest in concrete actions.

The Conspiracy According to Milei

The libertarian government released an image of Argentina’s Vice President Victoria Villarruel walking alongside Javier Madanes Quintanilla in Fate’s Virreyes plant during the 2025 Industry Day, attempting to deflect responsibility for the company’s decline and opening the door to a kind of political conspiracy theory to explain the closure.

«From Casa Rosada, the line disseminated is, first, to blame Madanes for not being competitive. Second, to suggest the company collapsed due to high prices. Third, to speculate that the business shut its doors just a day before the Labor Reform, as a pressure tactic to influence the vote. Quite peculiar,» argued Página/12.

Concern quickly spread throughout the sector. According to reports, on Wednesday, worker committees from Bridgestone and Pirelli—the other two industry players—arrived to support Fate workers in the Virreyes plant.

This display of solidarity is significant, occurring amid fears that Fate’s fate could repeat itself in any other company.

Chamber Votes on Milei’s Controversial Labor Reform

The protest led by displaced Fate workers coincides precisely with the Chamber of Deputies’ preparation to vote on Thursday concerning the controversial labor reform proposed by ultraliberal president Javier Milei, which has sparked widespread union protests, paralyzing Argentina with a general strike.

The legislative project, which was approved last week by the Senate, is expected to undergo modifications in the lower chamber, necessitating the Senate to ratify the legislation definitively, backed by the ruling party and its center-right allies.

In an effort to prevent its approval, members of the CGT have called for a 24-hour strike on Thursday, joined by transport workers, public employees, and bankers, among others. The closure of Fate stands as a potent symbol of what is at stake.

Argentine unions argue that the proposed legislation restricts the right to strike, reduces severance pay, licenses the extension of work hours up to 12 hours, and alters overtime pay, among other issues.

The «libertarian» government asserts that its «labor modernization» initiative aims to encourage formal employment, as informal work surpasses 40% in the country, while also reducing the number of lawsuits over dismissals, often considered a headache by many employers.

However, Fate’s closure illustrates a critical case of the Milei model crisis. It is not merely a factory closing after 85 years of operation. It symbolizes a national project that favors import openness without regard for the consequences on domestic production networks. This situation evidences that «modernization» can, in practice, lead to job destruction and the loss of industrial capabilities developed over decades.

*Featured Image: Jorge Labroso (Página/12).