FRENCH manufacturing giant Michelin yesterday blamed weak demand for truck tyres across Europe for 700 job cuts.
The announcement of a restructuring of its operations in its home country marks the latest blow to the continent’s struggling automotive industry.
Michelin, which employs some 63,000 people across Europe including 1,000 at its Dundee factory which is not affected by yesterday’s announcement, said winding down of production at its Joué-lès-Tours site in central France in 2015 was due to the “extremely competitive” European truck tyre market.
It said demand was running at 25 per cent below 2007 levels.
Apart from luxury carmakers cushioned by buoyant export demand, Europe’s automotive industry has been hit hard by the eurozone’s debt crisis and austerity drive, with vehicle sales nearing a 20-year low.
Companies including PSA Peugeot Citroen and Ford have already announced thousands of job cuts, and Michelin warned in April it would be forced to follow suit unless the market picked up.
The company, which employs 24,000 in France, said it would take a €135 million (£115m) restructuring charge in its results for the first half of 2013.
But as well as the jobs cuts, the group said it would be investing in other facilities in France including a spend of €145m to increase capacity by 30-40 per cent at two factories producing outsized tyres for earthmoving equipment, one of its most profitable markets.
A further €220m is earmarked for upgrading the company’s main research and development centre near its headquarters in Clermont-Ferrand, central France.
Workers at the Joué plant downed tools yesterday as their representatives were briefed on the cuts by management.
The company pledged to make 250 of the job losses through early retirement and by offering transfers to a further 480 staff, with 200 of the 930-strong workforce staying on in non-production roles.
The company said the move was needed to “preserve the competitiveness of its truck tyre production operations in France”.
It also plans to expand capacity to double truck tyre output from another facility in La Roche-sur-Yon as part of a strategy to develop “world-class, competitive and highly export-driven manufacturing centres”.
But Force Ouvriere union leader Jean-Claude Mailly described the cuts as a “hammer blow”.
Michelin also said it would halt truck tyre production in Algeria later this year and sell its local plant to the country’s Cevital group, which has pledged to preserve all of its 600 workers.
The company’s Dundee factory manufactures in excess of seven million car tyres each year for export all over the world.