Group Michelin has notified workers at its La Roche-sur-Yon, France, truck tire plant it intends to close the 47-year-old factory by year-end 2020.
Michelin cited a "structural transformation" of the premium truck tire market, both in Europe and overseas, for its decision to close the factory. Michelin said it is offering each of the plant's 619 workers the opportunity to continue working for the company.
This is the second plant closing announced by Michelin in the past several weeks. In late September Michelin disclosed plans to shut a plant in Hallstadt, Germany, which focuses on the production of smaller rim-size passenger tires, by early 2021, affecting 858 employees.
Michelin said the structural transformation affecting truck tires includes a European market with no growth expectations, intense competition and an expanding "entry-level" brand segment.
Michelin committed $132 million in 2013 to transform the plant — consolidating truck tire capacity from another plant in Joue-les-Tours, France — but now concedes that effort did not achieve the desired improvements in productivity.
Michelin said it reached the decision to close despite the "remarkable commitment" of the employees and the company's efforts to complete the "Skipper" project, which was aimed at reinforcing the activity of the La Roche-sur-Yon site.
Consolidating the Joue-les-Tours plant's capacity at Le-Roche-sur-Yon was expected to double the latter factory's capacity to roughly 1.6 million units a year.
Michelin also said it intends to launch an "ambitious initiative" to transform the site in the coming few weeks.
Michelin's priority now is to support each of the 619 employees to help them build their career. Michelin will propose negotiating an agreement on a support scheme for employees favoring voluntary mobility in order to avoid forced departures.
This approach will give the social partners the time and latitude necessary for the in-depth co-construction of solutions that are truly adapted to the needs of employees.
As part of this negotiation, in addition to an early retirement program, Michelin will offer secured internal and external mobility schemes, to enable each employee the chance to continue on a good quality career pathway in the best possible conditions.
Michelin said its offer of a job within the company to all affected employees is possible because of the scale of expected retirements in the coming years. This will open up multiple position opportunities in other sites in France.
Michelin also will offer to "strongly support" those employees who choose not to move to stay with the company and instead look for other work.
Michelin said it will record a provision of approximately $133 million in non-recurring expenses in its consolidated financial statements as of Dec. 31, 2019.