Tyre firm shake-up is good and bad news
Michelin to invest £52m in Dundee as Ballymena shuts
Michelin’s tyre plants in Dundee and Stoke on Trent will benefit from the closure of its factory in Ballymena, Northern Ireland where 860 jobs will be lost.
The company said it will “run down” the tyre manufacturing plant by mid-2018 as part of a shake-up of its facilities in the UK, Italy and Germany, where it will also close a factory.
Dundee will receive a £52 million boost in upgrading facilities to increase production by 30% to nine million tyres a year. The firm will spend £12m at its plant in Stoke. Up to 100 jobs will be created across the two sites.
The Ballymena plant opened in 1969 but high energy costs were said to have made production increasingly unsustainable.
A statement from Michelin said: “The proposal to run down the truck tyre factory in Ballymena has been made in light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007, which has seen the market decrease by over five million tyres.
“This reduced market has been made even more challenging by the huge influx of tyres made in Asia, which have doubled in the last few years, and increased competition.
“As a result, there is a strong need to reduce over-capacity and to concentrate Michelin truck tyre production in larger, more competitive sites.
“Despite great efforts and progress being made in previous years, other European plants are still more competitive than Ballymena.
“The tyre building machines at Ballymena are not capable of making the hi-tech tyres of the future, and the amount of investment required to upgrade the plant is prohibitive, particularly at a time when that capacity is not required.
“Employees prepared to relocate will be offered a job in UK or European plants with relocation support.”
The announcement comes a year after another major employer in Ballymena – the JTI Gallaher tobacco factory – announced it was closing its plant in the town by 2017, with the loss of 870 jobs.