Dive Brief:
- Tire maker conglomerate Michelin plans to end tire production at its facility in Ardmore, Oklahoma, by the end of 2025, laying off about 1,400 workers.
- The company, which has been operating since 1970, will begin winding down tire operations and implement its first round of layoffs next year.
- Michelin will move its operations to other U.S.-based tire passenger production plants. However, rubber-mixing operations will continue at the Ardmore site, which will supply other factories in North America.
Dive Insight:
Michelin has made several investments in the Ardmore plant over the past five years to keep up with the demand for light-duty trucks and cross-over vehicles that require larger tires.
Still, the site wasn’t able to keep up with the automotive market’s major transition to EVs or its customer requirements for sustainable materials and ongoing tire improvements. Thus, the company said if they continued investing to modernize the Ardmore facility, it would negatively impact Michelin’s 29 sites in the U.S.
Michelin did not immediately respond to a request for comment.
“Winding down operations is the hardest of all business decisions,” Terry Redmile, SVP of manufacturing for Michelin Group’s Americas Zone, said in a statement. “The Company has carefully explored every other option before resolving this decision.”
The company’s representatives will work with each worker over the next few weeks to discuss separation benefits and offer retention bonuses, early retirement, and financial incentives for relocation. The company is set to lose over $200 million, according to the press release.
Despite no longer investing at Ardmore, Michelin is moving ahead with its plans to expand operations in Canada. Earlier this year, Michelin announced it’s investing over $200 million to upgrade three tire facilities in Nova Scotia. The plant upgrades will enable the site to produce tires for the EV segment as well as larger tires for passenger and light-duty truck vehicles, according to the March 14 release.
