Michelin to Close Kitchener Plant
Michelin North America (MNA) has announced that it will close its Kitchener, Ontario, tyre plant in July with the loss 1100 jobs. Michelin cited overcapacity in its broadline products as the reason for the closure.
The news comes six months after the manufacturer closed its Poitiers, France, plant with the loss of 500 jobs and is believed to be part of a global cost-cutting programme. “We believe that Michelin will accelerate restructuring measures in coming quarters, using the opportunity of the progressive attrition of one third of their workforce (or 25,000 people) in Western Europe and North America in coming years,” Deutsche Banks analysts said in a report shortly after the news broke.
The Kitchener plant produces BFGoodrich, Uniroyal and private and associate brand passenger tyres, primarily for the US market, MNA said. Production there will continue until 22 July, MNA said, with necessary production being shifted to other MNA plants in plants in Tuscaloosa and Opelika, Alabama and Fort Wayne, Indiana The plant employs 1,100 hourly and salaried workers, according to MNA.
“The decision to close the Kitchener plant was very difficult,” said Guy Pekle, president of Michelin North America (Canada) Inc. “Michelin has made significant investment in the plant, as well as its three other North American BFGoodrich plants. However, overcapacity continues to exist in this segment of the market. The competitive nature of today’s tire industry requires the company to invest and maintain production in the plants that can compete successfully in an increasingly difficult global market.”
The plant suffered a short strike last year when union workers walked off the job in a pay dispute. The move comes on the heels of December and January announcements of plant expansions at MNA’s OTR tyre facility in Lexington, South Carolina, and its medium truck tire plant in Waterville, Nova Scotia.