Dick Wilkerson, CEO of Greenville-based Michelin North America, told The Greenville News that the Michelin brand "is much more resilient than the other brands" in the company’s portfolio, and has even "gained market share in the downturn. I think people are fleeing to value."
He said the company doesn’t anticipate any layoffs at its Michelin manufacturing plants in South Carolina under current conditions, and that some of its operations are doing well.
Wilkerson pointed to the company’s specialty tires made at the earthmover tire plant in Lexington and the X One, a large single commercial truck tire that replaces dual tires on 18-wheelers, as doing well, and that its retreading business is growing, with more locations franchising the processes.
But the tire market has experienced an unprecedented drop in the past year, he said. To handle decreases in demand, Michelin plants are varying production hours to meet the reduced demand. That varies from plant to plant.
Still, the company wants to retain its trained employees because the situation will improve, he said.
"When the demand comes back, we will be able to respond," he said.
Michelin said Monday it would close its Opelika, Ala., plant that makes BFGoodrich and Uniroyal brand tires because of the depressed tire market and an improvement in productivity at all its plants.
Wilkerson said that, "right now, there is overcapacity," and added that the Alabama closure "is due entirely to market forces and productivity improvements. The people of Opelika have been excellent employees."
He said the plant is stymied by its technology. All the dimensions of tires it makes can be readily made at other BFGoodrich plants, while the converse isn’t true.
"Business decisions that directly impact the lives of our employees are extraordinarily difficult," he said. "This action is necessary, however, for the long-term health and competitiveness of Michelin North America. In this crisis, there is no more business as usual."
Although "it takes some time to wind down a factory," he said the closure should be complete by the end of October.
The company also has plants in Tuscaloosa, Ala., and Fort Wayne, Ind. Those plants are making further production adjustments to reduce inventory, particularly in the BFGoodrich mass-market passenger tire segment.
The Tuscaloosa plant began an indefinite layoff of about 5% of its work force, effective Apr. 6. The Fort Wayne plant will began a similar indefinite layoff of about 6% of its work force, effective Apr. 12. Staffing details are being worked out now.
Before the announcement of the plant closing, Opelika, which had nearly 1,600 employees several years ago, had laid off nearly 10% of its production work force Feb. 14.
Michelin will work with government agencies, communities and the United Steelworkers union to make the transition as smooth as possible, Wilkerson said. A severance package for employees will include separation pay and other benefits.
Also, the company is establishing a Michelin Development Program to assist in the creation of new jobs from diverse industries within the community. Details will be announced later.
Michelin used a similar program when it closed a plant in Kitchener, Ontario, in 2006. (Tire Review/Akron)
