Michelin plans to close its Cholet and Vannes factories, affecting over 1,200 jobs, due to declining sales in truck and van tires. The company faces challenges from a shrinking new vehicle market and competition from Asia. CEO Florent Menegaux emphasized support for affected employees, including job placement and early retirement options. Despite these closures, Michelin aims to create new jobs in affected regions and will propose a plan for a more secure future for its French operations.
Michelin has announced the impending closure of its Cholet and Vannes factories, impacting over 1,200 workers, due to a significant drop in tire sales for trucks and vans. This decision was communicated to the employees on Tuesday morning, a situation they had been anticipating for several weeks.
Market Challenges
The tire manufacturer is currently facing a challenging year, grappling with a downturn in the new vehicle market alongside increased competition from Asia. Michelin’s CEO, Florent Menegaux, addressed the situation in an interview, stating, “It is the collapse of activity that has caused this situation, and I want to assure all these employees that we will not leave anyone behind.”
This closure adds to Michelin’s longstanding trend of downsizing in France, where it has already shuttered five other factories over the past two decades. The company had previously announced a plan to cut 2,300 jobs in France in 2021, leaving it with approximately 18,000 employees, of which 8,000 are in manufacturing.
The wider automotive industry is feeling the strain as well, with many European suppliers facing severe challenges leading to multiple site closures, evidenced by the struggles of wheel manufacturer Impériales Wheels and gearbox manufacturer Dumarey Powerglide.
Menegaux further elaborated on the circumstances surrounding the European tire market, indicating that the decline in demand for heavy trucks and vans has made it increasingly difficult to sustain operations at these factories in the medium to long term. The rise of Asian competitors in these sectors has rendered the closures “inevitable.”
The Cholet factory, which employs 955 people, specializes in the production of small tires for vans (17 inches and less). Michelin noted that this market segment has witnessed a substantial decline in Europe, leading to a drastic reduction in production without any signs of recovery. Future production will be shifted to facilities in Italy, Spain, and Poland.
Meanwhile, the Vannes site, employing 299 workers, primarily manufactures metal cables for tires destined for production in Spain and Italy. This factory has also seen a steady decline in production volumes, driven by shifting demand from the company’s heavy truck operations in Europe.
Commitment to Employees
In response to the closures, Michelin has committed to providing support to affected employees through customized solutions, which may include job placements within other companies or the organization, as well as options for early retirement.
The company also pledges to assist the regions impacted by these closures by fostering the creation of at least as many jobs as those lost. For instance, in La-Roche-sur-Yon, Michelin has successfully generated 635 jobs over the past four years, while 1,054 jobs were created in Joué-Lès-Tours during the same timeframe, despite the elimination of 613 and 706 jobs, respectively.
The inter-union group has expressed concerns regarding the future of several French facilities and has recently halted discussions with management. However, Michelin intends to present a plan dubbed “Michelin Industry France 2030” to the unions, designed to help French sites and their employees envision a more secure future.