CLERMONT-FERRAND, France—A crowd of more than 1,500 Michelin workers and union activists marched through the streets of Clermont-Ferrand, Group Michelin's headquarters, Sept. 21 to protest the tire maker's plan to cut 7,500 jobs in Europe over the next three years. In a highly symbolic gesture, union leaders took down a street sign from Avenue Edouard Michelin—so named for one of Michelin's co-founders—and replaced it with a sign marked Avenue du Plein Emploi (Avenue of Full Employment). The crowd then marched to the home of current Michelin Chairman Edouard Michelin (fourth-generation namesake of the co-founder) and deposited the sign in his front yard.
Since announcing a plan Sept. 8 to cut its European work force by about 10 percent, Michelin has been the object of a steady stream of criticism, from both political and labor circles.
France's Prime Minister Lionel Jospin took the company to task for announcing job cuts at a time when it was reporting increasing profits. Mr. Jospin said Michelin's job cuts run counter to France's current struggle to reduce unemployment.
Leaders from the French chemical and energy workers' union, FCE-CFDT, called Michelin's job action ``visceral contempt'' for the firm's workers and accused Michelin of disdain for small shareholders.
Edouard Michelin defended the company's plan, saying the cuts were necessary to make the tire maker more efficient so it could compete more aggressively with its major rivals.
Mr. Michelin told the French financial daily Les Echos the company risked falling behind its major competitors if it didn't act now.
Michelin's productivity lags its competitors noticeably: Michelin's sales per employee for fiscal 1998 stood at $109,064, whereas Bridgestone Corp.'s average was $174,639, Goodyear's was $140,550 and Continental A.G.'s was $141,174.
In spite of the furor in France, Michelin has yet to specify where in Europe the job cuts will be made. France, however, is Michelin's largest single operating unit and home to 16 of the company's 34 European tire plants.
In general, Michelin has too many small plants, a company spokesman said. Parallel to the job reductions, the company will seek to reduce complexity throughout its plant network, making product line consolidations where they make sense.
Michelin's announcement also comes at a time when French companies are preparing for a mandated 35-hour workweek—down from 39 hours—scheduled to take effect in January 2000.
Michelin's job cuts plan was greeted positively by French stock analysts. The firm's stock price jumped more than 10 percent the day of the announcement, although the gain has eroded somewhat since.