Michelin Tyre plc (MTPLC) announces investment and restructuring to confirm its place at the heart of Michelin European operations
The MTPLC proposals include investments and increased production at Michelin’s Dundee factory and the modernisation of its logistics and warehousing infrastructure in Stoke-on-Trent and the run-down of the Ballymena factory by mid-2018.
The proposal to run down the truck tyre factory in Ballymena has been made in light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007, which has seen the market decrease by over 5 million tyres.
This reduced market has been made even more challenging by the huge influx of tyres made in Asia, which have doubled in the last few years, and increased competition. As a result, there is a strong need to reduce overcapacity and to concentrate Michelin truck tyre production in larger, more competitive sites.
Despite great efforts and progress being made in previous years, other European plants are still more competitive than Ballymena. The tyre building machines at Ballymena are not capable of making the high tech tyres of the future, and the amount of investment required to upgrade the plant is prohibitive, particularly at a time when that capacity is not required.
An employee consultation process will begin immediately regarding the run-down proposal. The Ballymena factory currently employs 860 people, and MTPLC is committed to supporting those employees during consultation and in the forthcoming months.
Michelin appreciates the impact these proposals may have on the employees and local community, and commits to support every employee throughout the process. In the coming weeks we will meet every employee individually to discuss the proposal and the assistance the employee may need. Support will include enhanced redundancy payments, training and advice to find new employment quickly. Employees prepared to relocate will be offered a job in UK or European plants with relocation support.
In addition, Michelin Development, which has helped create more than 400 jobs in County Antrim in the last seven years, will release more than £5 million to help company start-ups, fund expansion at existing businesses and supply investment to attract new businesses to Ballymena. As part of MTPLC’s plans to maintain its position as a key part of Michelin operations in Europe, it is announcing investments of £65 million at its Dundee and Stoke-on-Trent sites.
Dundee will benefit from a five-year investment of more than £52 million to transform it into a state-of-the-art factory. The investment will increase production by 30 per cent through the installation of new tyre-building machines, enabling the production of larger tyres which are a growing segment of the market. Tyre curing capabilities will be increased with the installation of electric presses, the first large-scale industrialisation of this technology at a Michelin production site. A new 20,000 square metre warehouse will be built on site to accommodate this increased production.
Following a modernisation project of the Stoke-on-Trent factory with a £21 million investment over the last few years, there will be an additional investment of £12 million in its production and logistics facilities.
This will include a modernised distribution centre of 53,000 square metres in Stoke-on-Trent to serve all MTPLC customers, dealers and partners from a single shared logistics platform. This series of investments will lead to the creation of a total of more than 100 new jobs in Dundee and Stoke-on-Trent.
Michelin Tyre plc has developed these proposals to maintain its leadership position by responding to market changes, increasing competitiveness, improving manufacturing efficiency and enhancing customer service.