Michelin to Take EUR167 Million Provision to Close Operations in Bamberg, Germany

   By Max Bernhard 
 

Compagnie Generale des Etablissements Michelin (ML.FR) said Wednesday it would take a 167 million euro ($183.7 million) provision as part of a decision to close its site in Bamberg, Germany, due to lower demand worldwide and competition from Asia.

The site employs 858 people and primarily manufactures premium 16-inch passenger-car tires, which have seen a sharp drop in demand globally and strong competition from Asia, the French tire maker said. The closure will happen by early 2021.

Michelin has invested 60 million euros ($66 million) since 2013 to address the challenges and change the site's production but couldn't offset structural market changes, it said.

"However, these efforts, combined with the commitment of the teams, can no longer compensate for the structural transformation of the passenger-car tire market in Europe," it said, adding "no economically viable industrial alternative is possible in this context."

The provision will be taken against full-year earnings, it said.

Michelin said it would set up a transfer company, assistance for retirement as well as support programs for employees to find new jobs within or outside the company. The company will negotiate with labor groups to define how these measures will be implemented, it said.

Write to Max Bernhard at [e-mail]; @mxbernhard

(END) Dow Jones Newswires

September 25, 2019 07:59 ET (11:59 GMT)

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