Categories: News

Michelin: two factories will close and 1,500 jobs will be cut

Michelin has announced the closure of a significant portion of its tire production in Germany due to increasing production costs in the country across the Rhine.

The French tire company, Michelin, has just announced the imminent closure of two of its factories in Germany as well as the elimination of 1,500 jobs, due to “increasing production costs” in the country.

This decision is part of a “gradual cessation of activities by 2025” in the Karlsruhe and Treves factories, with also the end of the production of truck tires and semi-finished products at its Honbourg site.

What justifications?

Michelin also clarified its intention to relocate its customer service center dedicated to Germany, Austria, and Switzerland, currently based in Karlsruhe, to Poland. In total, 1,532 employees are affected by these cessations of activity out of the 5,000 that Michelin currently has in Germany, Austria, and Switzerland.

Michelin justifies this strategy by “context of increasing competitive pressure and increasing manufacturing and operating costs in Germany”. The group highlighted the repercussions of the recent health and geopolitical crises, as well as their consequences on the prices of energy, logistics, and raw materials, combined with a high inflation rate which have affected Germany’s competitiveness.

However, these explanations did not fail to arouse criticism, in particular from the unions, with whom management had been in discussions for several weeks regarding this activity reduction program, announced at the end of October.

The IGBCE union expressed its dissatisfaction, deploring that “the planned cut is unjustified” and accusing Michelin of seeking to maximize its profits at the expense of highly committed and qualified employees.

German industry in difficulty

This decision comes in a difficult context for the industry in Germany, faced with geopolitical upheavals which have affected its export-oriented economic model, as well as high energy prices, particularly since the war in Ukraine and the end of Russian gas deliveries.

At the same time, Michelin has been facing supply problems since the pandemic and must face increased competition from heavily subsidized Chinese and American companies.

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