Hundreds of jobs to go as Michelin cuts production at Canadian plant

Production and workforce numbers at Michelin’s Granton plant in Nova Scotia, Canada will decrease between now and July 2015, the tyre maker shares. On 3 March the company announced plans to reduce passenger car and light truck tyre output there in response to declining demand for small-size car tyres.

“The market has changed dramatically since the plant was built in 1971, and the company is changing with market demands,” said Grant Ferguson, president, Michelin North America (Canada) in a statement. “Market demand for small car tyre dimensions, such as the 14-, 15-, and 16- inch tyres produced at the Pictou County plant, is diminishing. Investment costs to upgrade the 43-year-old plant for larger car tyre production are not cost-effective.”

The measure directly affects approximately half of the Pictou County plant’s workforce of 1,000 and will be carried out in two phases; workforce numbers will decrease by around 200 when a production line making small dimension tyres closes by 30 June this year, and an additional 300 or so tyre production jobs will disappear before 1 July 2015 due to a further reduction of tyre production in Granton. Michelin says approximately 500 employees will continue to work at plant after this date, including those engaged in semi-finished rubber production.

Michelin states that all impacted employees “will have the opportunity to continue working for Michelin.” Options open to these employees include transferring to another position at the Granton site or to one of Michelin’s two other plants in Nova Scotia (Bridgewater and Waterville). Early retirement is a further option Michelin will offer. “We have a long history of manufacturing here, and we care deeply about the well-being of our workforce and the community,” said Ferguson. “We will continue as a significant manufacturing employer in Pictou County with our remaining operations on site, and we will continue to invest in Nova Scotia.”

Production in Granton after the planned cuts will include the manufacture of some high-performance passenger car tyres and tyre membrane production. The existing rubber mixing operation will also continue along with the company’s Canadian corporate offices. The reduction of tyre manufacturing at Michelin Pictou County will not affect Michelin’s plants in Bridgewater and Waterville. To finance the measures at the Granton site, the Michelin Group will book a provision of CA$87 million (£47.0 million) in non-recurring expenses in its first-half 2014 accounts.

Michelin remains the largest private manufacturer in Nova Scotia and has invested almost $2 billion in its operations since it began operations in 1969. In the last eight years, from 2005 to 2013, Michelin invested $587 million in its manufacturing operation within the Canadian province. “Michelin remains committed to Nova Scotia, as evidenced by the fact that this year alone we plan to invest a total of $66.5 million (£35.9 million) in our three Nova Scotia plants,” said Ferguson. Investments include projects at Bridgewater to extend wire capacity, ongoing investments in the Waterville Michelin X One investment project, along with a $10-million investment slated for in the rubber mixing operation on the Pictou County site.