Michelin cuts its losses in Colombia
In response to what it describes as “more than a decade of substantial annual losses in Colombia”, a situation it says “repeated investments have failed to stem”, Michelin has decided to discontinue the manufacturing operations of its local subsidiary Icollantas. The tyre maker singles out the unit’s insufficient size and other local economic factors as the reasons behind Icollantas’ lack of competitiveness.
Production operations at the Chusaca truck tyre plant, which employs around 220 people, and at the Cali plant, which makes Michelin passenger car tyres and BF Goodrich tyres, with a workforce of around 240 people, will be shut down in the summer of 2013. In accordance with Colombian law, a notice of intent has been filed with government authorities. Michelin reports that it is offering “personalised socio-economic support” to the 460 people concerned to help them find a new job. The sale and distribution of Michelin Group brands will continue and be stepped up in Columbia through developing the existing sales force, which will comprise more than 60 people. Michelin brand products will continue to benefit from a solid distribution network, the tyre maker adds.
In respect to the project, Michelin will recognize €101 million in non-recurring expenses in the consolidated financial statements for the six months ending 30 June 2013.