HALLSTADT, Germany—Michelin has disclosed plans to shut down its tire production plant in Hallstadt by early 2021, affecting 858 employees.
Closing the 48-year-old Hallstadt plant will cost Michelin approximately $185 million in non-recurring expenses, which will be reflected in the company's fiscal 2019 consolidated financial statements, Michelin said.
In operation since 1971, the plant is rated at 8 million tires per year, mainly 16-inch passenger car tires, demand for which has seen a sharp decline globally, Michelin said.
In addition to the structural changes in the market, the segment faces "extremely strong competition" from Asian manufacturers, according to the French tire maker.
To address this market development, Michelin said it had invested $67 million since 2013 in gradually adapting the site's production.
The tire maker said it made the decision in the absence of an "economically viable" industrial alternative, and after a consultation period with the works council.
The company is working with the plant employees to support them in the aftermath of the closure.
The decision to close the plant comes just days after the French tire maker disclosed it had converted production capacity at its plant in Bad Kreuznach to larger rim-size tires. It also falls less than a year after Michelin unveiled plans to shut down another small-sized tire production plant in Dundee, Scotland, affecting 845 jobs.