Clermont-Ferrand, France – Michelin is to launch a programme to improve the performance of its manufacturing and corporate & administrative operations in France, the group announced 6 Jan.
To be based on a three-year framework agreement with unions, the plan is intended to enhance Michelin’s position in premium and speciality tire markets and would avoid layoffs or plant closures.
Moreover, the group said it would develop new high value-added businesses in France, particularly in the service, sustainable materials, energy transition and recycling areas.
According to Michelin, the strategic initiative is in response to structural shifts in the global tire market, which have led to a “massive influx” of low-cost tires in the market over the last 10 years.
With the pressures on competitiveness particularly acute in France, the group plans to modernise its sites and advance its position in markets involving high value-added, technology-content.
In its statement, Michelin emphasised that it “believes strongly in France’s assets and is committed to maintaining the country at the heart of its strategy. “
The goal is to improve its competitiveness by up to 5% a year in the corporate and administrative activities and by up to 5% a year in the manufacturing operations.
At corporate and administrative levels, Michelin aims to eliminate complexities that are impacting on operational efficiency and to rationalise its sales, general & administrative activities.
At its manufacturing sites, Michelin foresees “robust gains” in plant performance over the next three years, building on performance improvements achieved over recent years.
The measures, it said, could mean the loss of up to 1,100 office positions up to 1,200 in the plants – around 60% via voluntary early-retirement and the remainder through voluntary severances.
For each job eliminated, Michelin said it “is committed to help create another, either through the development of its new businesses or through its participation in local job market revitalization programs, within a realistic timeframe.”
Michelin said the plan will involve an as yet undetermined level of capital expenditure to modernise plant- and office-based activities, with a focus on automation, digitalisation, ergonomics and environmental improvements.
“Our economic responsibility is to improve our overall performance while developing new high value-added business projects,” said Florent Menegaux, CEO of Michelin.
The process has to go “hand-in-hand with a highly demanding commitment to social responsibility, to work with our unions and employees to forge consensus solutions that are as balanced as possible,” added Menegaux.