Michelin to close factory in Scotland

The announcement by tyre manufacturer Michelin of its plans to close its factory in the Scottish city of Dundee, UK, has come as a very unwelcome surprise to employees and the wider local community. Workers were sent home immediately after they were informed of the news on 6 November, and the general mood outside the factory gates was one of shock and anger – not helped by the fact that the news had leaked out on social media a day earlier.

The planned closure is scheduled to be completed by mid-2020 and will result in the loss of all 845 jobs at the plant. In recent years Michelin has spent €70 million on modernizing the Dundee site, which was opened in 1971. But the plant is described as “unsuitable” to cope with structural changes in the industry, and the firm is unwilling to invest even more money to convert it in the current climate.

The growth in the range of tyres available is changing the dynamics in the industry, and premium manufacturers are under pressure from low-cost alternatives from Asia. Meanwhile, changing consumer tastes towards big wheels and robust SUVs have triggered a drop in demand for smaller tyres, which is what the Dundee factory is specialized in.

Volume cut

Manager of Michelin Dundee John Reid is quoted by the BBC as saying: “Clearly we have been operating in a very difficult market context for more than a year. We’ve had our volume cut three times this year. This year we actually produced the lowest volume we’ve ever produced in the factory, so it was clear that something fairly fundamental was happening.”

A representative from the union Unite reportedly called the closure a “hammer-blow” to the city of Dundee, where Michelin is currently the biggest employer. Scotland’s Economy Secretary Derek Mackay intends to form an action group to “explore all options to secure a sustainable future for the site” but, as one worker commented to the BBC: “The unions say they’ll fight, but what can they do? France has made their decision.”