Michelin announced plans on Tuesday to shut down two of its factories in western France, impacting approximately 1,250 workers, amid growing pressures on Europeâs automotive sector. The closures come as high operational costs and intensified competition from cheaper Asian manufacturers continue to strain the tire maker’s profitability.
The plants slated for closure include the Cholet facility, which employs 955 workers and primarily produces light truck tires, and the Vannes plant, where 299 employees manufacture metal tire frames. “The market share of entry-level car, light truck, and heavy-duty tires has risen significantly, affecting premium categories and creating overcapacity at some Michelin plants,” the company stated.
Michelin’s Chairman Florent Menegaux acknowledged the challenges but emphasized that alternatives had been exhausted. âWe assessed our options but couldn’t find any alternatives to [closing] these two sites,â Menegaux told Le Monde. âThe only constant at Michelin is that itâs always on the move.â
French labor unions expressed strong opposition to the closures, with CGT, a major union, urging Michelin workers to strike in response. CFDT, another union, called on Michelin’s management and the government to seek alternatives to avoid shutting down the facilities.
In response to Michelinâs announcement, French Prime Minister Michel Barnier underscored the difficulties facing Europeâs automotive sector, noting, âThe automotive sector is in a difficult spot and not only in our country.â Barnier advocated for stronger measures to protect Europeâs auto industry from “unfair” foreign competition.
The closures reflect broader struggles within the European automotive supply chain. Michelinâs decision follows recent warnings from unions at Volkswagen and Stellantis, while German supplier Schaeffler announced 4,700 job cuts on Tuesday. French Industry Minister Marc Ferracci echoed the call for protective measures, advocating for a European âemergency planâ to shield the sector from further strain.
Michelin has temporarily halted production at both sites until November 11 to facilitate discussions with employees and unions. The company will record a provision of approximately âŹ330 million ($360 million) in its 2024 financial statements, reflecting the costs associated with the closures.
Michelin, which was founded 135 years ago and employs nearly 15,000 people across 15 French manufacturing facilities, previously closed two German heavy-duty truck tire plants in response to similar pressures.
