DUNDEE, Scotland—Michelin told employees at its car tire plant in Dundee on Nov. 5 that the factory will close by mid-2020, resulting in the loss of 845 jobs.
Michelin said declining demand for the smaller-sized tires produced at the 47-year-old plant and increasing imports of low-cost products from Asia "have made the plant unsuitable and its conversion [to produce other types of tires] is not financially viable."
The Dundee site manufactures only 16-inch rim diameter and smaller tires for passenger cars. The plant is rated at 25,000 tires a day.
Dundee is the last Michelin tire plant in the United Kingdom. The company has a factory in Stoke-on-Trent, England, that produces truck retreads, tire molds and steel cord.
The decision to close Dundee comes just 17 months after Michelin — with the backing of the Scottish government — disclosed plans to invest $21 million to upgrade the plant for larger-sized tires and to reduce its environmental impact.
That investment was in addition to $106 million the company budgeted in 2015 to boost output 30 percent by 2020.
It also comes just six months after Michelin closed a truck tire plant in Ballymena, Northern Ireland, putting 860 workers out a job.
The closings will leave Michelin with a single manufacturing site in the United Kingdom, a truck retread, tire mold and tire cord plant in Stoke-on-Trent, England.
Michelin said it is offering the affected workers enhanced layoff packages and early retirement measures, as well as comprehensive assistance to employees seeking to start new careers.
John Reid, factory manager at Dundee, said the proposal would come as a "a huge blow" to the company employees and to the city of Dundee as a whole.
"This factory has faced incredibly tough challenges before and we have come through thanks to the hard work and flexibility of our people and the union, and the backing of the Michelin Group," he added.
According to Reid, the market for the smaller tires, made at the factory "changed dramatically and permanently" prompting the company to address these structural changes.
"The proposals are nothing to do with the U.K.'s decision to leave the EU, and they are absolutely not a reflection of the performance of the plant or the people who have worked so hard here for so many years," Reid said.
European Rubber Journal has learned that there are no concrete plans to transfer the capacity to any other Michelin plant at this point.