Posted on 09/10/2001 12:05:12 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
GREENVILLE, S.C. -- Michelin North America Inc. is cutting 2,000 jobs, or about 7 percent of its work force, citing a downturn in tire markets and the need to increase its long-term competitiveness.
The company hopes to complete much of the cuts through normal attrition and voluntary severance programs, Michelin said in a statement.
All 23 of Michelin's plants in North America will be affected, spokeswoman Nancy Banks said. The company has 26,500 employees, Banks said.
The jobs cuts had been expected for months after Michelin North America announced this spring it would cut $125 million in operating costs. The tire maker -- a subsidiary of France's Michelin, the world's No. 2 tire maker --has since announced it needs to cut costs by an additional $75 million.
The company blames a downturn in the tire market. Michelin's car and small truck tire sales had been boosted in 2000 by the demand for replacements for recalled Bridgestone/Firestone tires blamed for blowouts on sports utility vehicles.
At the same time, though, tire sales for larger trucks declined as the tractor-trailer industry suffered a decrease in sales. The cost of raw materials also has increased.
"We need to position ourselves for the future and cannot wait for the markets to improve," said Jim Micali, chairman and president of Michelin North America.
The company must get leaner and focus on its core businesses, Micali said.
"Through this cost reduction plan, we'll also improve our ability to weather the inevitable down cycles of the industry," Micali said.
If the company cannot cut 2,000 jobs voluntarily, Micali said Michelin would offer a "generous severance package."
Michelin's other operations around the world have been hit, too. The company is in the midst of cutting 7,500 jobs in Europe.
Hard times have struck many tire makers. Bridgestone/Firestone lost $250 million in the first half of this year in the wake of its 13 million tire recall in the United States.
Many other tire companies have not been able to take advantage. Goodyear's earning fell about 90 percent in the second quarter of 2001 compared with the same quarter a year earlier.
Goodyear and Michelin have blamed a decrease in auto and trucks sales worldwide for sagging profits.
Michelin said despite the cuts it still plants to invest in several South Carolina plants. State officials had worried the company might break a promise to add up to 1,400 jobs and $900 million in capital to South Carolina during the next decade.
Looks like even higher tax rates don't work either.
Michelin can start with the baby in the tire and the 6 ducks crossing the road.
That's seven right there.
[........crickets............]
That was only good for mufflers, not tires.
Dubya must've cut a deal with Midas.
10% tariff on imports would increase demand for domesticly produced tires, even if they're domesticly produced by a foreign owned company. (They'd probably also get a bigger chunk of the Bridgestone/Firestone replacement market.)
I hope the Michilin workers aren't holding their breath.
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