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Michelin has announced the closure of its truck tyre plant at Burnley and an end of the production of steel cord at Stoke on Trent, with the loss of a total of 732 jobs. The closures are said to be due to the downturn in the US truck market. Burnley is to close in March 2002, steel cord production in September.
Back in October, Tenneco Automotive announced that 285 jobs were to be cut in the USA, as part of a plan to reduce salaried staff by 700 by the end of this year. The company has announced another 405 salaried job losses worldwide, blamed on the state of the global automotive aftermarket and reduced vehicle production in the USA.
The group’s turnover fell from US$ 3.66 bn (1st quarter 2000) to US$ 3.41 bn for Q1 this year. Last year the group achieved earnings before taxes of US$ 80.3 million; this has turned into a loss of US$ 48.2 million. Earnings after tax fell to a loss of US$ 46.7 million. Despite these poor figures, analysts – especially from Deutsche Bank – have confidence in Goodyear, which is based on the hope that the effect of the disastrous Firestone recall will create a big advantage for first brands, and is also based on the assumption that price increases will stick. Last but not least, Goodyear has said that its on-going restructuring programme will lead to further significant cost reductions.
Pacific Dunlop Chairman John Ralph told shareholders at the company’s AGM that joint venture company South Pacific Tyres could return to a break even position by the end of the financial year. Earlier this year, 890 jobs were lost at SPT as the company restructured in a bid to cut losses, blamed on an influx of cheap tyres from overseas.
DaimlerChrysler has announced that it is to cut 26,000 jobs globally over the next three years, which equates to 20 per cent of the group’s workforce. Production will be stopped or curtailed at 13 factories, cutting capacity by 15 per cent. DaimlerChrysler has also told suppliers to reduce prices by 5 per cent.
Over the next five years, Continental will invest just over $51 million in its Continental Teves brake factory, located at Jicin in the Czech Republic. The investment will mean that the factory is amongst Europe’s largest brake system manufacturers and will mean another 670 jobs to the 900 already employed at the plant.
A report in the local paper, the Burnley Express, quoting an anonymous worker, says that workers at the Michelin tyre plant in the town have rejected cost-cutting proposals put forward by management. These proposals are said to include a 25 per cent reduction in shift allowance and some workers moving from a four day week to three days. However, a union spokesman said that proposals have been neither accepted nor rejected and unions and management will meet on 29 January to discuss the situation. Around 450 workers would be affected at Burnley, where truck and bus tyres are made.
Continental announced that the overhaul of its Belgian truck tyre plant at Herstal would cost 35 million Euro and result in a loss of 560 jobs. The workforce would be reduced to 200 and redundancy packages have been agreed this week. The saturated European truck tyre market had raised questions about the profitability of Herstal, which resulted in this restructuring. Truck tyre manufacture is being shifted to Eastern Europe where overheads are lower.
Nissan has made the decision to build its new Micra model at its Sunderland, UK, factory, rather than France, following approval of a 40 million Pound grant. The news is expected to secure 500 jobs at the plant and has been welcomed by the Government as evidence of Nissan’s long-term commitment to the north east. It is thought that Nissan will demand that, in the future, more of its component suppliers for cars made at Sunderland submit invoices in Euro rather than Sterling.
Korean tyre manufacturer Kumho’s production at Kwangju and Koksung had been halted by a walkout by 4,000 union members in protest at Government policies blamed for the loss of thousands of jobs throughout South Korea. Originally, a General Strike was planned from 5th July. Kumho representative, Lim Yoon, said the company would have lost $2.7m per day as a result of the strike. But – as Kumho says – further conflicts could be avoided and production is back to normal.
Next month, DaimlerChrysler is expected to reveal a restructuring plan for its Chrysler subsidiary. Industry commentators are speculating that the plan could involve job losses of up to 20,000, both blue and white collar jobs, and closure of as many as six factories over an unspecified period of time.
It has been announced that the former Kleber tyre factory at St. Ingbert in Germany will close at the end of June next year. The factory began making tyres in 1970 and ceased tyre production in 1994. Since then it has manufactured tyre components such as textile fabrics and rubber mixings. 200 jobs will be lost and the closure is part of the Michelin Group’s on-going restructuring programme to improve competitiveness.
In the UK, Pirelli Tyres Ltd has been awarded the contract to supply all wheel and tyre assemblies for the new BMW Mini. The project includes conventional and run-flat tyres from 15″ to 17″. The tyres and wheels are assembled at the company’s Burton-on-Trent factory and transported to BMW’s renovated plant at Oxford. Pirelli says that it will develop its own run-flat tyre for the contract, rather than use other manufacturers’ products, although different brands of “conventional” tyres will be supplied.
In the UK, ATS Euromaster has announced that Birmingham City centre will become home to its new National Administration & Finance Centre, creating over 150 jobs in the process. Commenting on the announcement, Roland Combes, Managing Director, said: “We want to develop our strategic base in the city of Birmingham to complement our state-of-the-art Customer Service Centre in Aston. The new facility means we will be able to provide seamless operational support for our centres, whilst continuing to deliver the best possible service to our growing UK customer base.”
The Michelin plant in Trier where the Group produces wire and bead core has come under the microscope. The management is guaranteeing 300 jobs out of the present 330 for this year only and is raising the question whether or not production of wire etc. is still a core business.
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