Michelin shuts down Scots plant for three weeks as sales slump

Michelin is to suspend production at its Dundee factory for three weeks – months after announcing a multi-million-pound investment.

Management of the French-owned firm said the decision was taken in response to the economic crisis in Europe and a very mild winter that had hit demand for specialist tyres.

Output at the plant, which has 860 staff, is currently being reduced and production will cease altogether at the end of May.

A spokesman said the impact on employees would be limited, but the pace of investment at the site would be slowed.

The surprise announcement yesterday followed Michelin’s decision six months ago to invest £50 million in its UK operations, including in Dundee, where it hoped to create a further 140 jobs.

The firm said the downturn in the eurozone had led to “very challenging” conditions for manufacturers.

The spokesman went on: “These issues reflect not only the current challenging economic situation across Europe, but a shift in the market.

“Whilst the strategy for the factory remains growth and the introduction of new tyre-making machines, which will allow the plant to make the tyres of the future, the current market conditions have led Michelin to slow its investment in the Dundee plant to better match the growth now foreseen in these markets.

“This change will not impact on jobs in the factory but will delay some of the investment plans during the next five years.”

Workers at the Baldovie plant have been told production is being stalled for three weeks in an effort to curb production volumes. Staff will be asked to undertake training during the closure. Planned holiday shutdowns in July and August will be extended.

Site personnel manger Ian Peart stressed there was no threat to full-time jobs or the planned investment.

He said: “We’re in a situation in which the impact of circumstances in the eurozone is beginning to affect demand for our tyres.

“Since the start of the year, we’ve been slowing our production using our own methods. But we’ve got to the stage now where we have to take a chunk out of production.”

Some 860 staff will be asked to go to work for four of their nine scheduled shifts during the shutdown, when they will undertake training and other duties. They will be told to stay away for the other five days, on full pay, on the understanding that they work the hours later in the year or in 2013.

Other Michelin factories across Europe will see similar production-slowing measures.