London – Groupe Michelin expects to achieve £40 million (€46 million) annually in productivity gains through the closure of its Dundee, Scotland plant, scheduled for mid-2020.
Michelin to gain €46m a year from Dundee closure
In a 14-Nov presentation at a UBS conference in London, the French tire maker said the planned closure, would incur a £140-million non-recurring cost in 2018 and £50 million “cash outs” during 2019 and 2020.
Productivity gains would start with £20 million in 2020 and increase to an annual figure of £40 million from 2021 onwards, according to the presentation.
Michelin announced its decision to close the Dundee plant on 5 Nov, citing a structural decline in demand for its output and competition from cheap Asian imports.
The plant makes 16-inch and smaller tires, Michelin maintaining that its conversion to manufacture other products was “not financially viable”.
An ‘action group’ comprising Scottish government, union and business leaders, on 12 Nov launched efforts to secure a future for the Dundee site.