MEXICO CITY, Mexico—Group Michelin's Uniroyal S.A. de C.V. subsidiary has closed its tire plants in Tacuba and Queretaro, Mexico, citing high production costs at the facilities. The plants were Michelin's only tire-making facilities in that country.
Michelin described the plants as its least cost-competitive sources of Uniroyal tires in North America, despite repeated cost-cutting and productivity improvement programs over the past 10 years. The company did not divulge earnings or sales data for the subsidiary.
The closings, effective Aug. 4, took capacity for more than 9,000 tires a day out of circulation: The 23-year-old Queretaro factory operated at 6,000 passenger and truck radials daily, while the 54-year-old Tacuba plant listed daily capacity of 3,200 bias auto, truck and bus tires.
The plants produced primarily Uniroyal and private brand tires for the Mexican market; no Michelin-brand tires were made there, a spokesman said.
The 760 employees put out of their jobs by the closings will receive a severance package that meets all legal and contractual requirements. The company did not disclose details of the severance package or say how much it expects the closings to cost.
Uniroyal said its commercial business with the Uniroyal brand in Mexico was profitable, and the company will continue to supply the Mexican market with Uniroyal-brand tires from other sources.
Michelin acquired the Mexican plants in 1989 through its purchase of Uniroyal Goodrich Tire Co.
Several of Michelin's top competitors—Goodyear, Bridgestone/Firestone Inc. and Continental General Tire Inc.—have tire plants in Mexico and there is one local tire maker, Companie Hulera Tornel S.A. de C.V., which has close ties to Denman Tire Corp. in the U.S.