Michelin, a leading global tire maker with deep roots in France, will close two manufacturing plants in Cholet and Vannes, impacting approximately 1,250 jobs. The closures, set to affect operations in western France, are the latest sign of distress in Europe's automotive sector, struggling with rising energy costs and intense competition from cheaper Asian imports.
Michelin Chairman Florent Menegaux explained that escalating costs and significant competition in entry-level tire markets left few options for maintaining operations at these sites. "The only constant at Michelin is that it’s always on the move," Menegaux told Le Monde, emphasizing the need for structural adjustments to sustain competitiveness.
Union and Government Response The decision has sparked backlash from labor unions, with the CGT union calling for a company-wide strike and CFDT urging both Michelin and the French government to seek alternative solutions. Michelin workers at Cholet voted to strike, voicing concerns over job security and the economic impact on local communities.
In response, Prime Minister Michel Barnier expressed disappointment and underscored the government's commitment to support affected employees. He also highlighted the broader challenges facing Europe’s auto sector, calling for "protection from unfair foreign competition."
The Broader Automotive Sector Impact Michelin's closures coincide with a wave of cutbacks across Europe’s auto industry. The announcement follows a similar move by Schaeffler, a German automotive supplier, which will lay off 4,700 employees, and recent warnings from Volkswagen and Stellantis regarding potential plant closures and profit concerns.
Industry Minister Marc Ferracci urged for a comprehensive European "emergency plan" to safeguard the auto sector, noting that policy proposals would be submitted to the EU in the coming weeks.
Plant Closures and Financial Implications The Cholet plant, producing smaller light truck tires, employs 955 workers, while the Vannes site, manufacturing metal tire frames, has 299 employees. Michelin has paused production at both facilities until November 11 to allow time for discussions with unions and employees. The company anticipates a provision of €330 million ($360 million) in non-recurring expenses due to the closures, which will be reflected in its year-end financial statements.
The closures follow Michelin’s earlier announcement to shutter two German truck tire plants and a recent profit forecast cut, attributed to a slowdown in the auto market in Q3. Michelin employs close to 15,000 people across its 15 French manufacturing plants, underscoring the significance of these closures within the company's broader European operations.
As France and Europe contend with the rising tide of foreign competition and economic challenges, the future of the region’s auto sector remains uncertain, with leaders calling for swift protective measures to stabilize the industry.
