French tire maker to cut jobs

• Source: Shanghai Daily
• [11:10 June 19 2009]
• Comments

By Jean-Marie Godard 

Bibendum, the mascot of Michelin SA, is seen during a car parade for the 24-hour Le Mans endurance race in western France. The French tire maker announced yesterday plans to cut 1,093 jobs beginning next year. Photograph byMichel Spingler

Faced with plummeting demand, French tire maker Michelin SA announced a plan yesterday to cut 1,093 jobs over a three year period, starting in 2010.

The company said the cuts will be made on the basis of voluntary departures and that no workers will be laid off.

French media reports earlier this week had said Michelin would fire 1,500 workers.

Michelin said in a statement that 495 of the workers would leave as a result of retirement. Another 598 workers are to be offered some kind of position elsewhere in the company but different from their current job, a procedure known in France as "reclassification."

Michelin, which is based in the central French city of Clermont-Ferrand, has been caught in the economic turmoil that has hit the auto industry particularly hard.

In the statement, Michelin justified the measures that it said were due to "an extremely competitive context, aggravated by the current crisis."

Demand for tires is down globally as a result of the economic crisis, and Michelin already has laid off workers temporarily this year from another plant.

Michelin said in April that its sales fell 14.2 percent to 3.5 billion euros (US$4.5 billion) in the first quarter as demand for tires slumped in all the company's markets other than China. Measured in volume, sales plunged 24.4 percent during the first three months of the year.