Michelin to close two French plants, impacting 1,250 workers

Michelin, the tyre manufacturer, said it would shut two factories in France which would put 1,250 workers at risk. High operating costs and higher competition from Asian producers at low prices were the main reasons cited for the closures of Cholet and Vannes plants in western France, the company said.

Coming amid broader turmoil in Europe's automotive sector, which is going through heightened pressures from rising inflation, higher energy prices and intensifying competition. Other big industry leaders have followed suit, including Michelin. In recent weeks unions at Volkswagen warned plant closures could be imminent while Peugeot maker Stellantis issued major profit warnings.

On the same day that Michelin announced its moves, Germany's major automotive supplier Schaeffler said it would be firing 4,700 people. These developments are a sign of growing instability within the sector, which is rapidly becoming increasingly competitive and cost conscious, in an increasingly cost conscious global market.

That has drawn outrage from French labor unions. The hard line CGT union had called for a nationwide strike and the CFDT called for the closure to be explored by the company and the French government. According to Michelin’s Chairman, Florent Menegaux, closing the two sites was necessary despite efforts to find alternatives as that market had seen structural shifts, *Le Monde* reports.

The closures were condemned by French Prime Minister Michel Barnier, who offered support for the affected workers. Europe had to protect its automotive industry against the 'unfair' foreign competition, he said, to keep jobs and long-term competiveness in the country. Industry Minister Marc Ferracci also wants a European 'emergency plan' for the sector.

Both the Vannes site, which produces metal tyre frames, and the plant, which makes smaller light truck tyres, employ 955 and 299 respectively. It has suspended production at both plants until November 11 in order to begin talks with the unions and staff.

In addition to these closures, Michelin announced last year the closure of two German plants and recently lowered its profit forecast due to a slowdown in the automotive market. The company operates 15 plants in France, employing nearly 15,000 workers.