French tyre manufacturer, Michelin has announced that it will shut down its Bamberg site in Germany by early 2021. This move will lead to a loss of more than 850 jobs. This plant was established in 1971 and was built to manufacture premium 16-inch tyres for passenger cars. The segment mentioned above is identified as the most robust competition from Asian manufacturers and also a visible drop in the global demand.
Moreover, the Michelin Group has funded €60 million to meet the market evolution and progressively adapt to the plant’s production. Having said that, these efforts, combined with the hard work and commitment of the teams, can no longer pay for the architectural change of the passenger car tyre market in Europe. Also, there’ s no economically practical industrial option present in this situation.
The tyre maker has come to this decision after discussing the matter with the works council as per accordance with German legislation. The current priority of the Michelin group is to provide the most effective support possible to the workers of the plant and the Bamberg region. This move will aid the employees in facing the consequences caused by the tough decision. In addition to that, the tyremaker is planning to organise a personalized support program for each and every employee working in the Bamberg plant. This program will include the application of a transfer company, internal mobility, compensation for retirement, and external mobility.
The brand will have a talk with labour organizations to specify how these actions will be executed. The Michelin Group will register a provision of roughly €167 million to support this operation in non-recurring charges in its consolidated financial reports as of December 31, 2019. Moreover, the brand is also building a unique revitalization program to reconstruct the site.