Workers at Michelin’s Dundee plant are leaving for the final time today as the manufacturer ends its half-century of operations in the city. The final Dundee-made Michelin tyre was produced on 23 March, as the Coronavirus pandemic interrupted the planned closure of the site. The Unite union agreed to the early end to production, with Michelin honouring all wage commitments until the final closure date, 30 June. The 2018 decision to close the factory was informed by the rapid increase in consumers’ preference for lower-cost alternatives within the smaller size range the factory was equipped to produce. Michelin supported efforts to find employment for staff at the factory, including the relaunch of Michelin Development, which aimed to create hundreds of jobs in Dundee and Angus.
Michelin’s tyre plant in Dundee, Scotland has produced its last tyre. Although the facility wasn’t scheduled to close until mid-year, Michelin now says it won’t resume operations after the coronavirus crisis – indeed, it considers doing so “unviable and unwise”. The decision has been taken in agreement with the Unite union, and the company will pay plant workers all wages they’re entitled to through to the planned closure date.
Production at the Michelin tyre plant in Dundee is expected to end by the middle of this year, with around 850 jobs affected. To offset this loss, the company is relaunching its Michelin Development scheme with the aim of helping to create hundreds of jobs in Dundee and the Angus area.
Michelin calculates that closing its tyre factory in Dundee will cost the company £240 million until the end of 2021, however it expects to partially offset this cost with £60 million of savings during this period and then make annual savings of £40 million thereafter.
Work to find a sustainable future for the Michelin Dundee plant is now underway – after Scotland’s Economy Secretary Derek Mackay convened the first meeting of the Michelin Dundee Action Group yesterday. Meeting in Dundee, Mackay tasked the group with exploring what can be done to retain the plant in Dundee and how it could be repurposed in the future towards manufacturing related activity.
An analyst report published by Jefferies International Limited has stated that the closure of Michelin’s Dundee plant “supports [the company’s] intent to accelerate cost savings during 2019-20.” Presenting its nine-month 2018 results in October, Michelin warned that demand had deflated in the car and truck markets and it was revising down its guidance; subsequently Michelin shares fell to a seven-year low.
It isn’t just retreaders who have suffered at the hands of cheap tyres imported from the Far East. In a statement issued today, Michelin confirms that its plant in Dundee “continues to face extremely challenging trading conditions, primarily due to the influx of cheap tyres from Asia and falling demand for premium tyres in smaller dimensions.”
Demand for larger tyre sizes continues to increase, and Michelin intends to better equip its Dundee factory for their production through a project being implemented at a total cost of £16.5 million. Scottish First Minister Nicola Sturgeon announced yesterday that Michelin’s own investment will be supported by a £4.5 million Environmental Protection Grant from Scottish Enterprise.
Michelin Corporate Foundation has been announced as a corporate founding partner in the development of the V&A Museum of Design Dundee. The V&A Museum will be the first in the UK outside of London, and is part of a wider £1 billion regeneration scheme for the city. Due for completion in 2018, the foundation will support both its initial and ongoing development with a significant investment. A gallery within V&A Dundee will take on the Michelin name for a term of 25 years. Michelin has strong ties to Dundee; its tyre plant on Baldovie Road is the city’s largest employer. The French manufacturer committed to an investment of £52 million to modernise the plant in 2015, and was recently visited by the Queen.
The Michelin tyre factory in Dundee is the city’s largest employer, and last year the tyre maker committed to a plant modernisation investment totalling more than £52 million. The funds cover the installation of new tyre building machinery that will boost production capacity by 30 per cent, electric curing presses and the erection of a new 20,000 square metre warehouse.
Michelin Tyre Plc is consulting on the closure of its Ballymena truck tyre factory at the same time as investing in the expansion of its Dundee car tyre and Stoke-on-Trent retreading sites. The Ballymena factory closure plans suggest the site will be run-down between now and a mid-2018 closure point. The Ballymena factory currently employs 860 people and Michelin says it is “committed to supporting those employees during consultation and in the forthcoming months”.
Those wishing to see Michelin Tyre PLC’s plans for extending and modernising its Dundee facility can do so today and tomorrow at the Michelin Training Centre in Baldovie Road, Dundee. The tyre maker intends to extend existing factory buildings on the southern part of the Dundee site, reportedly to provide space for additional tyre production and storage, and undertake earthworks to create a flood storage area on the western part of the site. It is understood that the extensions would enlarge the existing building by 2,000 square metres, and a further 300 square metres of office space would also be added.
Michelin Tyre PLC has announced that Michelin Group has agreed to invest up to £50 million in its UK manufacturing sites at Ballymena, Dundee and Stoke-on-Trent over the next six years. This investment plan will be supported by grants from the UK and Scottish governments and will help the company increase production capacity and help secure employment at all three of its UK production sites. Implementation of these plans has already begun at Dundee with the hiring of 140 people to fill newly created positions and the construction of a building extension to house new production equipment. In Stoke work has also commenced with the conversion of an existing building, ahead of the installation of new state-of-the-art equipment for the manufacture of the latest generation Michelin Remix truck tyres.