These plans, according to the tyremaker, constitute a new phase in Michelin’s industrial strategy in the two countries, and are aimed at strengthening the group’s competitiveness in Western Europe. Michelin adds that “significant investments” have been earmarked for plant modernisation projects.”
As part of the strategy, production at the company’s factory in the French town of Toul is scheduled to cease in 2009. The facility produces mid-range passenger car tyres, a market experiencing intense competition from low production cost countries that have massively invested in this specific segment during the past five years.
Michelin claims that, in spite of significant investment into the operations at Toul in recent years and the streamlining of industrial processes, production costs at the plant are 50% higher than those of the French manufacturer’s competitors, therefore Toul is no longer a competitive site. The company adds that the market currently has an overcapacity in the tyre sizes manufactured in Toul.
Michelin says it will undertake all necessary measures to “help every employee find a new job quickly and revitalise the affected regions.” Each employee will automatically be offered two job opportunities at another of the group’s 16 French factories. For those workers wishing to remain in the Toul area, Michelin will provide “all the support necessary to help them find a new job rapidly or start a professional project.”
In Spain, a programme will be implemented to reorganise and modernise all Michelin facilities, and as part of this the company’s Lasarte plant will become a specialised production site for the manufacture of high performance motorcycle tyres. A sum of 50 million euros has been allocated for modernising facilities at Lasarte, and when motorcycle tyre production is in full swing 90% of output will be exported. The production of passenger car tyres at Lasarte, the plant’s current mainstay, will cease before the end of next year. A number of jobs will disappear during the changeover, with Michelin opting to take an ‘early retirement’ approach to redundancies wherever possible.
A stated aim of this industrial strategy is a 7% increase in French tyre production by 2011. Michelin reports that in total it plans to invest 2 billion euros modernising plants and equipment in Western Europe, including 1.15 billion euros in France and 320 million euros in Spain. Despite job cuts at certain locations the group will continue to hire new staff between 2007 and 2001, and aim to fill more than 4,000 jobs in France and 600 in Spain.
