Hundreds of jobs are under threat at Michelin’s Dundee factory after a fall in global demand for premium tyres.
The French headquartered group said the market had also been hit by a flood of cheaper products from Asia.
Michelin stressed it was working to “meet these market challenges” but management at the Dundee site have told the 850-strong workforce they could face job cuts or changes to shift patterns – or a combination of both – as a result of the downturn.
The site is now slated to produce a maximum of 5.4 million tyres per annum over the next three years, a figure which falls roughly 25% short of the facility’s seven million-plus peak production capacity.
“Michelin Dundee continues to face extremely challenging trading conditions, primarily due to the influx of cheap tyres from Asia and falling demand for premium tyres in smaller dimensions,” Dundee factory manager John Reid said.
“Production for the next three years is forecast to be a maximum of 5.4 million tyres a year, which is significantly below capacity.
“We are working with employees, unions and the Michelin Group to meet these market challenges.
“We will explore all options to maximise the efficiency of the plant, and those options could include restructuring working patterns and reducing headcount.
“Michelin Dundee continues to appreciate the hard work and flexibility of its employees, and we will update them before the end of the year.”
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The move to reduce output from the site comes just 15 months after First Minister Nicola Sturgeon visited the factory to reveal a £16.5 million upgrade plan.
The investment was the latest in a series of major cash injections for the Dundee factory in recent years and was expected to secure the workforce for the next 10 to 15 years.
The factory – which is currently working with the developers of the under-construction waste to energy plant at neighbouring Baldovie in order to use the heat it will produce to improve efficiency in the tyre making process – is one of Dundee’s largest private sector employers and has been operating in the city for more than 45 years.
Alison Henderson, chief executive of Dundee and Angus Chamber of Commerce, said Michelin deserved support at what was a difficult time for all manufacturing businesses as Brexit loomed.
“Knowing Michelin Dundee and the management of Michelin Dundee as I do, they fight constantly for the factory here within the global group and they have done that really successfully.
“I am sure this is something they will have worked very hard not to do and hopefully it will be a short, temporary issue.
“Manufacturing in Dundee sometimes operates a little under the radar but Michelin have been strong for a number of years and has seen real growth and investment.
“The other issue for industry at the moment is Brexit and what trading with Europe and the wider world is going to look like.
“Companies like Michelin Dundee operates within a global marketplace and, with Brexit, I’d be concerned whether there is enough information to forward plan.”
The proposed changes to Michelin’s site come in the same week as V&A Dundee is due to open its doors.
The tyre manufacturer has been a strong supporter of the V&A development through the Michelin Corporate Foundation and one of the spaces within the museum is named the Michelin Design Gallery.