Michelin & Cie (ML), Europe’s largest tiremaker, will end production of heavy-truck tires at a factory in France, eliminating 730 jobs at the site and trimming excess capacity amid slumping demand in the region.
A factory in Joue-les-Tours, about 250 kilometers (155 miles) southwest of Paris, will stop making the tires by the first half of 2015, the Clermont-Ferrand, France-based company said in a statement today. About 200 of the plant’s 930 employees will keep their jobs. Manufacturing of heavy-truck tires will also cease at a factory in Algeria.
Michelin’s European plants are currently using 50 percent to 60 percent of capacity for truck tires and 70 percent for passenger cars and light trucks, Michelin Chief Executive Officer Jean-Dominique Senard said on May 17. The company is seeking growth outside Europe and expanding offerings of tires for large vehicles such as mining equipment.
Sales of the French tiremaker fell 8.1 percent in the first quarter to 4.88 billion euros ($6.45 billion), as the European car market slides for its sixth straight year. Sales in Western Europe dropped 6.8 percent from January to May, according to IHS Automotive.
Demand for heavy-truck tires has fallen 25 percent since 2007, according to Michelin. The 200 remaining employees at the Joue-les-Tours site will work on semi-finished products.
To improve its competitiveness in France, Michelin plans to 800 million euros by 2019 in its home country, the company said. The manufacturer employed about 24,000 people in France at the end of 2012, or 22 percent of its global headcount. The investment includes money to develop a research center in Clermont-Ferrand and double heavy-truck tire production at a factory in La Roche sur Yon.
Michelin shares fell as much as 60 cents, or 0.9 percent, to 67.80 euros and was down 0.1 percent at 12:35 p.m. in Paris trading. The stock has slipped 4.6 percent this year, valuing the company at 12.5 billion euros.
To contact the reporter on this story: Mathieu Rosemain in Paris at email@example.com