Michelin's Dundee plant seeks grant aid to safeguard future

John Reid (above), the factory's new manager, is putting proposals to Michelin executives and government ministers to ensure the company remains viable over the next three to five years.

Reid says the Dundee factory is aiming to specialise in tyres designed for the growing electric car market.

Michelin, a major employer in Dundee since 1972, had a torrid 2009 with global revenue falling nearly 10 per cent worldwide with sales of tyres down nearly 15 per cent.

Along with several other employers, the Michelin factory cut hours and production rather than lay off any of its 800 employees in the second half of 2009.

Reid, who took over as manager in January, admitted that morale among the Dundee workforce was hit during a Europe-wide restructuring of Michelin factories which saw a number of closures. Although Dundee made it through the latest round of shutdowns, Reid did not rule out the need more closures at Michelin.

He said despite competing against 18 of Michelin's other European tyre plants, Dundee was in the top third of Michelin factories.

"Dundee is a good plant, but in the future there will only be excellent plants. There won't be good plants," said Reid. "We have to drive harder to become an excellent factory. That is the next challenge over the next three to five years."

Last month, Michelin invested 20 million in upgrading its Stoke-on-Trent factory, which was augmented by a 3.9m grant from the regional development agency Advantage West Midlands. Reid said government support for firms was attractive to Michelin's French owners, as the company looked to continue to cut costs in Europe while it expanded its facilities in Brazil, India and China.

He said government funding "reassures the company that their operation and the commitment they make to a site is valued by the country it operates in".

"We will be looking for government support and grants," said Reid. "We have to justify every investment we make and it is a competition. Michelin has a limited resource it can invest. If it can make a better investment in other plant then it will do.

"If we can get support from local government to bear a percentage of the costs, then it is a little easier to fish in the investment," he said.

Reid credits the flexibility of the Dundee workforce and its "business literacy" for the factory's ability to compete with cheaper or larger centres.

"Dundee's secret, if there is any secret, is its relationship with its workforce. It is their ability to work with the unions and make difficult decisions and make changes quickly.

"We have a high-calibre workforce, well trained, and we try to attain a level of business literacy in the workforce so when something like this (a downturn] happens they can understand and digest it more readily than some other people.

"If you have reasonable people and you keep them informed, nine times out of ten you will come up with the right answers. We tackled it together and that's the secret of how we have come through a difficult period."

Reid is now focused on improving the image of manufacturers. Not only does Dundee produce Michelin's brand of "energy saver" tyres, but the firm also adheres to a zero-waste policy.

He says since 1998 the firm has reduced electricity consumption by 30 per cent and was the first factory to erect onsite wind turbines, which provide 25 to 30 per cent of the plant's energy.

The company also passes some of its waste to cement factory Lafarge, which can use cured rubber as fuel.