Michelin to close two more plants in Europe
The company Michelin has announced that it will close its factories in the French cities of Cholet and Vannes by the beginning of 2026, which have been facing significant economic difficulties for several years. As a result, 1,254 people will lose their jobs, and previously, Michelin had also announced the closure of facilities in the German cities of Karlsruhe and Trier, while the plant in Homburg will cease production of new tires and semi-finished products. Additionally, the production of truck tires will be halted at the Olsztyn plant in Poland.
Regarding the closure of the two French sites, Michelin states that the decision is linked to the structural transformation of the markets for passenger car, light truck, and truck tires, as well as the deterioration of competitiveness, including due to inflation and rising energy prices. "The decision was made as a last resort after analyzing all alternative scenarios," the company said.
Michelin adds that in recent years, the situation in the European market has changed due to the influx of cheap tires from Asia, which "has damaged the premium segments." "In fact, over the decade, the market share of budget passenger/commercial and truck tires has increased by 9 and 11 percentage points, respectively, taking share away from premium segments, which have decreased by 11 and 8 percentage points, respectively (according to Roland Berger data as of May 2023), leading to overcapacity at some Michelin plants in Europe," the company said.
The company has promised to "mobilize all available resources for individual support" for each of the employees who will lose their jobs and noted that in connection with the closure of the factories, additional funds of around 330 million euros have been reserved.
Production at both factories will be halted until November 11, so that management and unions can discuss future support for employees. Some workers will be eligible for early retirement, others will be able to transfer to another position within Michelin, and the rest, the company says, will also be assisted in finding new employment. A committee will also be created to oversee the implementation of the plan to support workers.
Michelin emphasizes that France is a key and strategically important region for the company, where its headquarters (in Clermont-Ferrand) and main research center (in Ladu) are located, with around 3,000 employees developing new technologies. In addition, Michelin is "actively engaged in modernizing its production sites where possible."
"Among all European tire manufacturers, Michelin is the only company that has maintained a broad industrial presence in Western Europe, particularly in France," Michelin said, adding that currently, around 19,000 people work in the company's French division, including 9,000 production site employees. "Even after the closure of the Cholet and Vannes factories, France will remain the number one country in Michelin's structure in terms of the number of facilities and employees," the company noted.
It is also reported that in France, Michelin is implementing the Michelin in Motion 2030 strategy, aimed at increasing the production of high-value-added products, such as aircraft tires, large mining equipment, and others. In addition, other areas of activity are being developed, such as the Watèa by Michelin subscription service for the use of eco-friendly commercial vehicles. The company is also developing various composites, which, according to Michelin, already account for a significant portion of the company's revenue. In 2023, a "gigafactory" was opened in Saint-Fons in partnership with partners, the largest European site for the production of hydrogen fuel cells, which will create several hundred new jobs, and Michelin is also producing various inflatable structures as part of the Michelin Inflatable Solutions project.
"Over the past 10 years, Michelin's investments in France have exceeded 2.6 billion euros, 1.5 billion of which have been directed towards modernizing factories in areas such as digitization, AI, decarbonization, water management, waste management, employee training, and improving the working environment," Michelin said, adding that the former factory in Qatar has become "an unprecedented project with investments of 300 million euros, combining private and public investments," which will create 1,000 jobs by 2030, and new biomaterials will be developed.
"Our goal is to improve the competitiveness of French production, and we will continue to work in this direction. That's why we offer the unions to work on creating conditions that will allow our companies and employees in France to more effectively plan their future," Michelin said. "We are convinced that through the Michelin France Manufacturing 2030 project, by working collectively with the unions, levers will appear that will help develop the career prospects of employees and the competitiveness of companies, especially small ones, and ensure a minimum level of protection and support in case of a change in activity, to jointly prepare the future for Michelin and its employees in France."