Michelin backs Dundee tyre plant

FRENCH tyre giant Michelin has offered reassurances over the future of its plant in Dundee, but warns that the scale of its investment in the facility will depend on grant funding from the Scottish Government.

The firm also revealed that it has held talks with government ministers over the possibility of making winter tyres a legal requirement in this country. The Scottish Government is understood to have approached Michelin following the extreme weather conditions at the end of last year.

At a press conference in Berlin, Michel Rollier, managing general partner of Michelin, confirmed that the company will continue to invest in Ballymena, where it produces large truck tyres, and Dundee, where it employs 750 people.

Michelin temporarily ceased manufacturing across all of its global operations following the economic crisis as demand ground to a halt.

But it recently signalled that its Dundee plant was being considered for a multi-million pound investment.

Eric Le Corre, managing director of the UK business, Michelin Tyre, said that the firm's 70 factories around the world competed fiercely for a 1.6 billion annual pot available to keep facilities up to date. About half of the money is spent on Michelin's factories in Europe and the US, and the other half is spent on facilities in emerging markets.

He said the future of the Dundee operation was still subject to discussions which he expected to conclude in the autumn. Productivity at the plant made a "big leap forward" last year, he said, which was "instrumental in keeping Dundee in the race to compete for investment".

Following its decision to suspend manufacturing last year, Michelin was surprised by a sudden resurgence as retailers restocked and there was strong demand for winter tyres.

All of Michelin's factories are currently working at full capacity, including Dundee which used the downtime to "de-bottleneck" its operations.

"Dundee has been able to deliver a higher level of daily production than was initially anticipated," said Le Corre.

Dundee produces energy-saving and winter car tyres for the UK and European markets, and Le Corre said the proposed investment would make the plant suitable for producing tyres for a wider global market.

The firm is seeking an undisclosed amount of regional selective assistance funding from the Scottish Government to support its plans for the Scottish facility.

Le Corre said he met Finance Minister John Swinney last year to discuss the possibility of bringing German-style rules to Scotland that require all motorists to use winter tyres, which are designed to perform at temperatures below 7 degrees Celsius.