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8 October, 2007
A year ago, Michelin rubber company announced a massive, global four-year restructuring plan called l’Horizon 2010. The plan would cut costs by over US$2 billion by 2010, push the operating margin to over 10%, and gain annual growth at a rate of 3.5%.
It would also cost 12,000 jobs, nearly two-thirds of which are now happening in France, Spain, and Italy. The horizon for many European workers of Michelin is bleak and barely visible.
In France, trade union CFDT has expressed deep concern over the French company’s plan to close its auto and light truck tyre plant in Toul, an enterprise called Pneumatiques Kleber. The plant is located in Meurthe-Moselle near Metz. Michelin intends to close the 47-year-old plant by 2009, severing 800 jobs.
In Spain last week, CC.OO trade unions conducted a vote among 5,500 Michelin workers at three tyre plants on a company-proposed plan tied in with l’Horizon 2010. The plan passed by just under a two-to-one margin, but job restructuring will occur for half of the workers. Even though changes to work shifts are now in effect, Spanish unions did maintain the 35-hour work-week, and work days will not exceed 198 annually.
The tyre plants are Michelin’s Valladolid auto and tractor tyre plant, an auto and construction tyre plant in Vitoria, and a truck and bus factory in Aranda de Duero. The plants are in northern Spain. Workers at a fourth tyre plant in Lasarte, near Bilbao and close to the Bay of Biscay coast, won assurances that Michelin will invest US$73 million to produce premium tyres for sport motorcycles.
In Italy, trade unions FILCEM-CGIL, FEMCA-CISL, and UILCEM-UIL began protests in June to protect 5,500 jobs at four production plants, all near Turin, three logistic plants, and a commercial centre in Milan. The unions have demanded that the multinational begin new investments in the country, and have called upon Italy’s Ministry of Economic Development to closely examine issues that will facilitate investment.
Michelin’s ambitious four-year restructurings call for reducing inventory levels below 16% of net sales, freeing cash flows, and spending some US$650 million per year on capitalisation projects, nearly all of which will occur in Eastern Europe, Asia, and Latin America.
Besides Europe, workers in other countries have felt the pain of job cuts and plant closings. Early in 2007, in Nigeria, the French company closed a tyre plant in Port Harcourt, causing Nigeria’s senior staff federation, Trade Union Congress (TUC), to say that it “wonders why (Michelin) just wants leave of the country, causing misery and hardship to former employees who never prepared for premature retirement.” The plant employed 1,200, and Michelin had operated it for 30 years.
In North America, Michelin shuttered a unionised plant in Kitchener, Canada, in 2006. The closure cost 1,100 jobs in the province of Ontario. The United Steelworkers (USW) protested the closure several times, including a mass rally when the plant’s machinery was auctioned off in May 2007.
That same month, in the UK, Michelin announced it was closing its final pension scheme for 4,000 rubber workers at three plants and a logistics centre. The company said it was moving workers into a defined contribution pension plan, effective in January 2009. Three years ago, Michelin closed off the final pension scheme to all newly hired employees at its UK operations.