Michelin to close Kitchener tyre plant by July

Kitchener, Ontario - Michelin North America Inc. will close its BFGoodrich passenger and light truck tyre plant in Kitchener, Ontario, Canada, effective July 22, due to overcapacity in a shrinking North American mass market passenger tyre segment.

The United Steelworkers' Union (USW) expressed grave disappointment upon being notified of BFGoodrich's intent to close the facility.

Michelin and the United Steelworkers union, which represents about 1000 hourly workers in Kitchener, reached a contract agreement following a short strike in August 2004. Language in the pact included no-plant-closure security, but the deal lapses July 22, the designated shutdown date.

"We're extremely disappointed that the company intends to take this action without involving us in any discussions that led up to this decision," said Ron Hoover, USW executive vice president. "I thought we had a better relationship than this."

The Union claimed that the decision is in breach of the current agreement with Michelin, saying, "This action is contrary to the current agreement, finalized in August 2004, which grants the

facility plant protection status, provides its workers with a network of job security provisions and commits to investing the necessary capital needed to increase the quantity of higher quality, more profitable tires produced at the Kitchner (sic) plant.

Michelin said it will shift production to its other North American BFGoodrich tyre units - in Opelika and Tuscaloosa, Alabama, and Fort Wayne, Indinana - the company announced on Thursday. The Kitchener site houses about 1100 salaried and hourly employees.

Michelin said the mass market passenger tyre segment in North America has been decreasing in size over the past several years, plus it is experiencing "intense cost pressure" caused by increased imports from lower-cost competition abroad. The 34-year-old Kitchener plant, with an estimated daily capacity of about 17 000 tyres, produces BFGoodrich-, Uniroyal- and private- and associate-brand passenger tyres, primarily for the US market.

"The decision to close the Kitchener plant was very difficult," said Guy Pekle, president of Michelin North America (Canada) Inc. "BFGoodrich has made significant investment in the plant, as well as its three other North American plants. However, overcapacity continues to exist in this segment of the market."

The shutdown will not affect Michelin's other Canadian facilities, all located in Nova Scotia.

From Rubber & Plastics News (A Crain publication)

Press release from BFGoodrich

Press release from USW

Ontario keeps bleeding jobs as Michelin closes tire plant Globe and Mail (Canada)