Michelin plans to close two factories in France

The Cholet and Vannes plants have been struggling with the structural changes in the passenger car, light truck, and truck tyre markets.

Tyre manufacturing company Michelin has announced the closure of two of its French factories by 2026, a move that will impact approximately 1,250 employees.

The Cholet and Vannes plants have been struggling with the structural changes in the passenger car, light truck, and truck tyre markets, the company said in a statement.

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Increasingly challenging competitiveness in Europe, exacerbated by inflation and rising energy costs were also cited as the reason for the closure.

“In recent years, European markets for passenger car & light truck and truck tyres have undergone a profound transformation, with a strong trend toward low-cost tyres, mainly from Asia, that has been detrimental to premium segments,” the company said.

Michelin added that the decision to close the plants was made as a “last resort” after analysing and evaluating “all possible alternatives”.

The company will record a provision of around €330m ($356m) in its consolidated financial results for 2024 to address the closures.

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Michelin said it will use “all available resources” to support the affected employees and the communities of the two plants individually.

The company has paused production at both sites until 11 November to allow for management and unions to engage in collective and individual discussions with the workforce.

Despite the closures, France will continue to be Michelin’s leading industrial country in Europe, with the remaining 15 production plants and nearly 19,000 employees, including 9,000 in manufacturing.

The decision has sparked outrage among French labour unions, with the CGT calling for a company-wide strike and the CFDT urging for a review of the decision to find alternatives, reported Reuters.

The Cholet factory, which employs 955 workers and produces light truck tyres, and the Vannes plant, with 299 employees making metal tyre frames, had been previously flagged by labour unions as potential closure sites.

Following the announcement, staff at the Cholet site voted in favour of strikes to protest the planned shutdown.

Recently, Volkswagen CEO Oliver Blume highlighted the need for a comprehensive cost-cutting programme to tackle “decades of structural problems” within the automaker.

Volkswagen is considering significant cost reductions, including potential factory closures and layoffs, to improve competitiveness and ensure long-term sustainability.

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