But France’s Socialist government, its popularity hit by fast-rising unemployment, took the announcement in its stride, in a sign of its growing willingness to work with the country’s manufacturers and unions to improve competitiveness.
Michelin unveiled the cuts at its plant in Joué-lès-Tours in central France, which will stop making truck tyres, as part of a restructuring plan in which it will invest €800m in France between now and 2019 “to enable its French plants to meet the highest European competitiveness standards”.
It emphasised that it intended to avoid any compulsory redundancies. It will take a €135m charge in the first half of this year to cover the restructuring.
Pierre Moscovici, finance minister, said: “All the ministers involved will work together to make sure things work out in the best way.” He specifically included Arnaud Montebourg, the leftist industry minister who has in the past attacked big companies for redundancy plans.
Mr Moscovici said the government would be “very attentive” to the social consequences of Michelin’s plan – but also to “the situation of Michelin, which is a great company with a global vocation, which must be competitive, present on the market, innovative and strong”.
Michelin, which employs 24,000 people in France out of its 63,000-strong European workforce, said it was responding to a 25 per cent fall in demand for truck tyres in Europe since 2007. It said it would concentrate truck tyre production in France at a plant at la Roche-sur-Yon on the west coast, investing €100m to increase production to 1.6m tyres a year.
The investment programme will also include €145m used to upgrade its earthmover tyre plants in France, and a further €535m in other manufacturing and research projects.
Unions at Joué-lès-Tours stopped work on Monday in protest at the announcement and vowed to fight the job cuts. “If Michelin is not capable of negotiating correctly it will lose more than the workers will lose,” said Claude Guillon, local representative of the communist-backed CGT union.
But Michelin is clearly hoping its overall investment plan will win it broad support, as unions and the government respond to appeals for the need to cut costs and improve investment to compete with German and other European rivals.
Its announcement followed recent restructuring programmes involving 7,500 job losses at Renault and 6,000 at PSA Peugeot Citroën that were hammered out with unions at France’s two big carmakers. Peugeot has also begun talks on a further deal with the unions to improve competitiveness.
Michelin itself recently agreed a landmark deal with the majority of its unions for employees to “pay back” at a later stage days lost during times of reduced production during the downturn.
-Fianacial Times
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