No longer competitive – Michelin closing Ardmore, USA tyre plant

In response to a “rapidly and profoundly” changing passenger vehicle market in North America, Michelin has decided to end production at its Ardmore tyre plant in Oklahoma. Michelin North America idled operations at the factory from the morning of 26 October to begin the process of presenting details to the workforce. It expects to resume operations early on 28 October, but “over the coming days and weeks” Michelin representatives will discuss separation conditions with each individual employee.

Tyre production will wind down gradually, and Michelin anticipates completing the process by the end of 2025 at the latest. Rubber-mixing operations at the Ardmore site will continue. The end of tyre manufacturing activities impacts approximately 1,400 people (excluding additional contractors) at the Ardmore site, which has produced passenger tyres since 1970. Michelin will shift tyre production to its other passenger tyre plants in North America.

Further investment ruled out

In light of the aforementioned profound and rapid changes, and despite “substantial investments” in the Ardmore plant over the past five years to improve technical capabilities and competitiveness, Michelin has concluded that the facility “is not equipped to deliver tyres at competitive costs that will meet these evolving market demands in the coming years.” The company has ruled out further investments to modernise the Ardmore plant, stating that these would “negatively impact other US sites in the network.”

Michelin says the following three “fundamental market conditions” were key to its decision:

• The dominance of light trucks and crossover vehicles in North America that require ever-larger tyre sizes.
• A dynamic market transition to electric vehicles.
• Customer demand for continual improvements in rolling resistance and other sustainable materials technologies.

Taken together, Michelin explains that these factors “add substantial complexity” to its portfolio, which in turn requires “much greater industrial flexibility.”

Job cuts to begin mid-2024

Michelin has not yet determined the precise timing for specific phases of the wind-down. Based on the current outlook for market demand, the company expects operations at the Ardmore plant to continue trending gradually lower until mid-2024, at which time it will implement the ”first wave” of staffing reductions. Michelin expects to instigate additional reductions “in phases” through 2025 as it finalises transition plans.

Rubber-mixing operations at the Ardmore plant supply other Michelin factories in North America. Michelin expects these rubber-mixing operations to continue “for the foreseeable future” after tyre manufacturing activities wind down.

Hardest of all business decisions

“Michelin has strived to be a good steward in every chapter for this plant and community. Winding down operations is the hardest of all business decisions,” says Terry Redmile, senior vice president of manufacturing for Michelin Group’s Americas Zone.

“The company has carefully explored every other option before resolving this decision,” Redmile continues. “In the months ahead, we’ll work through every stage of the transition with a deep sense of stewardship for the Ardmore community. Our goal is to provide individual support for each person at the Ardmore site to start a new chapter in the best way possible. This also includes starting conversations with local and state-level leaders to determine the best ways to lend support for this community even after the transition.”