Michelin to close Japan tire plant in July

(chinatrucks.com, Jan.18, 2010)Group Michelin will end tire production at its passenger and light truck tire plant in Ota, Japan, in July, citing the plant's high operating costs as the reason.

Closing the plant, which Michelin acquired from Japan's Okamoto Industries Ltd. in stages starting in 1988, will affect about 380 employees. The plant's production of about 12,000 tires a day will be transferred to other Michelin plants in Asia, Europe and North America, the company said.

The closing will not affect Michelin's sales and research and development activities in Japan, grouped together under Nihon Michelin Tire Co. Ltd. in Tokyo.

Michelin said it is taking this action because production costs at Ota are twice those of other group plants serving the same tire segments. This cost disparity is despite measures taken since 2006 to improve productivity, reduce production costs and, starting in 2007, refocus production on more complex products such as X Ice tires, Michelin said.

Michelin is holding discussions with employee representatives at the Ota factory in order to help employees affected by the closing to find jobs, either within Michelin Group, in particular in Ota site in Japan, or elsewhere.

A provision will be set aside for restructuring costs related to this project, though Michelin did not quantify it individually. They are part of $595 million in non-recurring expenses Michelin is booking against 2009 results; this charge also covers the firm’s plan to specialize production at plants in France, to reorganize manufacturing and sales operations in North America as well as a voluntary separation plan for employees in France.

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