Michelin closing down German plant by early 2021

Bamberg, Germany – Michelin Group has announced plans to shut down its tire production plant in Hallstadt, Bamberg, by early 2021, affecting 858 employees.

The closure will cost the French tire maker approximately €167 million in non-recurring expenses which will be reflected in the company’s consolidated financial statements as of 31 Dec 2019, Michelin said 25 Sept.

In operation since 1971, the Bamberg site manufactures 8 million tires per year, mainly 16-inch passenger car tires, the demand for which has seen a sharp decline globally.

In addition to the structural changes in the market, the segment faces “extremely strong competition” from Asian manufacturers, according to the French tire maker.

To address this market development, Michelin said it had invested €60 million since 2013 in gradually adapting the site’s production.

“However, these efforts, combined with the commitment of the teams, can no longer compensate for the structural transformation of the passenger car tire market in Europe,” said Michelin.

The tire maker said it made the decision in the absence of an “economically viable” industrial alternative, and after a consultation period with the works council.

The company is now working with the plant employees to support them in the aftermath of the closure.

The announcement comes less than a year after Michelin unveiled plans to shut down another small-sized tire production plant in Dundee, Scotland, affecting 845 jobs.