DUNDEE, Scotland — Group Michelin is warning of possible job cuts at its consumer tire plant in Dundee amid "extremely challenging trading conditions" it blamed in part on an influx of "cheap tires" from Asia.
Michelin said it expects the plant's output to fall "significantly below capacity" to a maximum of 5.4 million car and light truck tires per year over the next three years from 6.2 million units in 2017.
The company cited falling demand for smaller premium tires for the decline in output along with the increase of Asian imports.
Michelin said it is working with employees and unions to address market challenges. Michelin employs 850 at the 47-year-old plant.
"We will explore all options to maximize the efficiency of the plant, and those options could include restructuring working patterns and reducing headcount," the company noted.
Michelin's warning comes just a year after the company disclosed a $21 million investment in the factory to upgrade the plant for larger-sized tires and to reduce its environmental impact.
That investment was in addition to $106 million the company budgeted in 2015 to boost output 30 percent by 2020.
The investment covered the installation of new machinery, enabling the production of larger tires which are a growing segment of the market. It also envisaged a new on-site warehouse to accommodate the rise in production.
This is the second bit of negative news for Michelin in the United Kingdom this year. In April the company ceased production at its 49-year-old truck tire plant in Ballymena, Northern Ireland, with the loss of 860 jobs. The decision was linked to rising energy costs and falling demand for truck tires in Europe.