Michelin is to close a factory in Northern Ireland with the loss of 860 jobs, heightening concerns that global competition amid a recent decline in world trade will cause a spate of factory closures.
The French tyre maker told its workforce in Ballymena it was closing the plant “in light of the significant downturn in demand for truck tyres in Europe since the financial crisis of 2007”. Michelin said the site would be run down until it shuts in mid-2018.
It is the second major closure in the town after tobacco company JTI Gallagher announced last year that it was closing its manufacturing site, with 800 redundancies.
More could follow across the UK unless the government improves support for export industries and especially manufacturing businesses, the British Chambers of Commerce said.
Speaking at the BCC’s international trade conference in London, the director general said David Cameron’s ambition to generate an annual £1tn in exports by 2020 was off course. “Will we continue our unsustainable binge of consumer and government spending – or will we make the tough choices and fix the fundamentals, a choice that would lead to more investment and global trade?” John Longworth said.
In 2014, the annual trade deficit was £34.8bn – the largest since 2010 when it reached £37bn. The deficit was blamed on a £14.6bn fall in goods exports from the previous year, which was only partialy offset by a £7.3bn drop in imports.
Michelin said it would continue to make tyres in Dundee and Stoke on Trent, where it planned to invest in new machinery and storage facilities.
But the company said a reduction in capacity was needed after a decline in the European tyre market by more than 5m tyres since the financial crisis. It added that he squeeze on its operations had been compounded by the huge influx of Asian imports, which had doubled in recent years.
“As a result, there is a strong need to reduce overcapacity and to concentrate Michelin truck tyre production in larger, more competitive sites. Despite great efforts and progress being made in previous years, other European plants are still more competitive than Ballymena,” it said.
Michelin has four factories in Thailand, one in India and two in China. Its Chinese factories employ more than 6,000 of the firm’s 112,000-member global workforce.
Unite said the Michelin decision was devastating news for manufacturing in Northern Ireland. Davy Thompson, the union’s regional coordinating officer, said: “In addition to the 860 workers who are directly employed by Michelin on the site, there are approximately 500 contractors and many more in the economy who now face the threat of redundancy as a result of this announcement.”
Thompson also said regional and national government inaction played a part in Michelin’s exit from Ballymena after more than four decades. “Unite has repeatedly demanded action from ministers in relation to the high energy costs, the protracted difficulties experienced by Michelin in obtaining a connection for a proposed combined-heat power plant and the pressing need for capital support to modernise the plant,” he said.
“Ministerial inaction has resulted in a situation where high energy costs have left the Ballymena plant having the second lowest operating efficiency and now facing closure.”
