Michelin announces €120 million exit plan for site in France

by Autocar Pro News Desk , 11 Oct 2019

The Michelin group has announced that the La Roche-sur-Yon site in France will be shut in the wake of the unfruitful reinforcement activity. Michelin will propose to the social partners to start as soon as possible the negotiation of an agreement on a support scheme for employees favouring voluntary mobility in order to avoid forced departures.

As part of this negotiation, in addition to an early retirement program, Michelin will offer secured internal and external mobility schemes, to enable each employee to continue on a good quality career pathway in the best possible conditions. Michelin is offering all the employees concerned the opportunity to stay within the company and at the same time supports secure professional evolution of employees.

Among the 1,338 salaried employees at the Cholet plant, 74 people from the workshop supplying rubber mixes to La Roche-sur-Yon site are concerned by the project of closure. In addition to the early retirement measures, Michelin claims that each employee concerned in Cholet will be offered a new position on the site. There will be no impact for employees of the other French factories.

The measures are being taken at the site after the reinforcing activity failed to produce any result. Michelin claims that this activity called the ‘Skipper’ project, which was supported by a 70 million-euro (Rs 549 crore) investment, did not produce the expected results due to the structural transformation of the premium truck tyre market, both in Europe and overseas: a European market with no growth expected, intense competition, with an entry-level brand segment in constant increase.

The Michelin Group claims that its priority is to support each of the 619 employees to build with them their future career. Michelin is committed to ensuring that each person, according to his or her situation and projects, has a choice for the future.

Michelin is also proposing an initiative to transform the site, allowing for the development of sustainable activities, which will serve the interests of the town, the department (a local administrative division), and the region. Michelin will propose to the trade unions and all the public and private stakeholders in the region to take part in this project which will be supported by the Group.

To finance this operation, the Michelin Group will record a provision of approximately €120 million (Rs 942 crore) in non-recurring expenses in its consolidated financial statements as of December 31, 2019.