Michelin North America Inc. has decided to suspend its operations at the Starr manufacturing plant by the end of 2015. The facility mainly produces off-the-road tyres.
The Starr facility of Michelin was opened only two years back and employs around 100 people. However, the company said that current employees will be offered jobs at other Michelin plants in the area. Michelin operates nine other manufacturing facilities including another earthmover plant that is situated 100 miles east of the Starr in South Carolina area.
Michelin’s spokesperson said the company has suspended production at Starr due to excess capacity in mining sector. She mentioned that mining firms are hit worldwide due to falling commodity price and slower growth. The company, however, has no plans to dilute the assets of the Starr plant and plans to keep its equipment on standby so that they can restart the operation once the global mining market conditions and demand recover.
Michelin’s spokesperson also said that operations will be able to restart in timely manner when the market conditions improve and this will be accomplished by carefully maintaining the facility even during the shut down.
According to the company, its Lexington plant has sufficient capacity to fulfill the current demand for off-the-road tyres. Over the several years, the company has invested $750 million to build up the Starr factory and also to increase the capacity of the Lexington plant.
Michelin also manufactures earthmover tyres at its Victoria facility in Spain. According to Michelin, the production capacity at Lexington and Victoria will not be affected by this decision.