Michelin Relocates Europe to Cope with Slowing Demand
In recent days, the Michelin Group was very busy.
They are busy closing down some tire production facilities in the United Kingdom, Italy and Germany, laying off more than 1,600 people. While investing 290 million U.S. dollars, they have modernized tyre factories in the United Kingdom and Italy and established a complete tire logistics and distribution network.
Michelin said that the integration of business is to respond to the slowing demand for tires in Europe.
European market slides Michelin re-layout
In the United Kingdom, Michelin's business activities are mainly concentrated in the car tires and light truck tires and the tire market. The company closed some factories that are in poor condition, such as the Ballymina truck tire factory in Northern Ireland.
Because the plant's geographical location is remote, resulting in high logistics costs, coupled with high production costs and energy costs, "the factory has been operating for several years."
In Germany, Piaget Lauren, a subsidiary of the Michelin Group that specializes in the retreading business, will close its tire revamping plant in Oranienburg as a result of the harsh environment in the European retreading market.
At the same time as closing the factory, Michelin will invest 75.5 million U.S. dollars in the Dundee factory in England, which will increase the production of tires for passenger tires and light trucks by 30% in 2020. The investment will also include the installation of new equipment capable of producing larger tires and the construction of a new warehouse.
The French tire manufacturer will also invest US$16 million in the Stoke factory on the River Tren in England. As part of the new multi-brand strategy, the factory had replaced the tire production equipment several years ago.
In Italy, the group will implement a five-year strategic plan to further increase tire production.
If it is to invest 197 million U.S. dollars, in 2020, it will further expand the production of car tyres, van truck tyres and truck tyres in the two factories in Cuneo and Alexandria, Italy.
The Cuneo plant is a Michelin Group's large passenger tire and light truck tire production plant, and is also one of the largest semi-finished products production bases in Europe.
The Alexandria plant will specialize in the production of new truck tires, and its retreading operations will be terminated in mid-2016.
The Fossano factory in Italy mainly produces semi-finished products. Production has been reduced by 45% since 2009 and the plant will be closed by the end of 2016.
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