Production will shift to remaining BFGoodrich Tire facilities in Alabama, Indiana
OPELIKA, AL (April 13, 2009) - Michelin North America announced today a restructuring plan for its manufacturing operations in response to the unprecedented drop in market demand. The company will close its BFGoodrich Tire Manufacturing plant in Opelika, Ala. by Oct. 31, 2009.
The decision comes in the wake of the continuing economic crisis as consumers are driving fewer miles, purchasing fewer vehicles and delaying tire replacement purchases. The dramatic drop in market demand has created significant overcapacity in the North American tire markets that Michelin does not expect to rebound in the near term. According to the Rubber Manufacturers Association, North American tire sales volume is expected to decline for the second year in a row in 2009.
"Business decisions that directly impact the lives of our employees are extraordinarily difficult," said Dick Wilkerson, chairman and president of Michelin North America. "This action is necessary, however, for the long-term health and competitiveness of Michelin North America. In this crisis, there is no more business as usual."
The BFGoodrich Tire Manufacturing facility in Opelika, Ala. produces BFGoodrich and Uniroyal brand passenger car tires. It currently employs approximately 1,000 wage and salaried workers. Michelin will consolidate production at the BFGoodrich Tire Manufacturing facilities in Tuscaloosa, Ala. and Ft. Wayne, Ind.
The decision ensures the company will be better able to fully utilize the capacity of its remaining Michelin and BFGoodrich facilities in North America, accelerating work already under way to reduce costs and improve competitiveness. The company's strategy is to manufacture in the markets where its tires are sold. More than 85 percent of the tires Michelin sells in North America are manufactured in North America.
The company will work with appropriate government agencies, communities, and the United Steel Workers union to help make the transition for all affected employees as smooth as possible, including providing separation pay and other benefits.
Recognizing that the BFGoodrich Opelika facility is a significant part of the local economy, Michelin North America is establishing a Michelin Development Program to assist in the creation of new jobs from diverse industries within the community. Details of this initiative will be communicated in the coming weeks.