CLERMONT-FERRAND, France — In a bid to improve the competitiveness of its manufacturing, corporate and administrative operations in France, Michelin Group plans to launch a "reinforced simplification and competitiveness plan" that could result in the elimination of up to 2,300 jobs there over three years.
The plan also will include an as-yet undisclosed amount of capital spending to modernize its plant- and office-based activities and to improve the quality of work life, with a focus on automation, digitalization, ergonomics and environmental excellence.
To expedite the deployment of the competitiveness plan, Michelin said it is offering to initiate negotiations with the unions as soon as possible to devise a three-year framework agreement that will empower each plant and corporate and administrative entity to develop its own strategy.
"The ultimate goal of this project is for France, the birthplace of Michelin, to remain a key country in the group's strategic transformation in the years ahead," Michelin CEO Florent Menegaux said. "Our economic responsibility is to improve our overall performance while developing new high value-added business projects.
"This business responsibility has to go hand-in-hand with a highly demanding commitment to social responsibility, to work with our unions and employees to forge consensus solutions that are as balanced as possible, and to do everything we can to provide exemplary support to people and our host communities in these transformations."
The company's goal is to improve its competitiveness by up to 5% a year in the corporate and administrative activities and by up to 5% a year in the manufacturing operations. These targets may vary depending on each targeted entity's activities and competitive environment, Michelin said.
The reduction in jobs would be split nearly evenly between offices (up to 1,100 positions) and factories (up to 1,200). Nearly 60% of the projected separations would be based on voluntary early retirement opportunities and the remainder on company-supported voluntary severances, Michelin said.
The plan apparently does not include plant closures.
For each job eliminated, Michelin said it would help create another, either through the development of its new businesses or through its participation in local job market revitalization programs, within a realistic timeframe.
The amount and timing of the capital expenditure program be based on identified needs and progress observed on projects, Michelin said.
The plan is part of a broad "co-construction and social dialogue approach" and will rely on negotiating a three-year framework agreement that will not entail any layoffs.
At the same time, Michelin said it's committed to keep developing its market presence in France by consolidating its position in premium and specialty tires while continuing to locate new high value-added businesses in the country, particularly in the service, sustainable materials, energy transition and recycling domains.
Michelin said its decision to pursue these initiatives are in response to "profound, structural shifts" in the global tire market, led by the massive influx of low-cost products. These changes compel the company to support strategic shifts in its operations to prepare for the future.
The situation is particularly critical in France, Michelin added, where the "vitality of its positions depends on significantly strengthening its competitiveness."
Thus the firm plans to modernize its sites and reinforce its position in premium and specialty tires with high value-added technological content, while also pursuing a strategy of locating new high-value-added businesses in France, particularly in the service, sustainable materials, energy transition and recycling domains.
Michelin said it believes strongly in France's assets and is committed to maintaining the country at the heart of its strategy.
For the corporate and administrative entities, there are two objectives: to eliminate the complexities in the operating modes; and to allocate the right resources to help reducing selling, general and administrative expenses,
As for the job-reduction program, Michelin said it will offer voluntary early retirement opportunities to all eligible employees (with full retirement over the period) as well as outplacement initiatives.
To implement these measures, Michelin will propose that the unions negotiate mutually agreed annual severance packages (RCC) that will be used to support the evolution in the workforce and jobs resulting from the project over the next three years. This annual approach is designed to manage these changes step-by-step as the project reaches each milestone, as defined through a local social dialogue process.
As for its plan to foster new businesses in the region, Michelin cited its expansion strategy in hydrogen solutions. Through Symbio FCell, its joint venture with Faurecia Group, Michelin plans to build France's first hydrogen fuel cell production plant in Saint-Fons, in the Auvergne Rhône-Alpes region. This project is expected to create hundreds of jobs over time.
In addition, the Group plans to start up new businesses in France over the next three years in recycling and sustainable materials, with the industrial-scale production of a breakthrough plastic waste recycling technology in partnership with Canadian-based Pyrowave, and the industrial-scale production of a non-toxic resin by its Resicare subsidiary.