The factory will be closed in July after several measures destined to increase productivity and cut production costs failed to offer a satisfying result. Since 2007, the plant has been dedicated to the production of “complex products” but this did not improve its efficiency either. To be more specific, production costs at the Ota factory are about twice as high as those of other sites producing similar tires, as just-auto writes.
The production will be relocated to other sites in Asia, Europe and North America.
The company said that it will "continue to develop its operations and expand its presence in Japan and the Asia Pacific region, notably through its research and development programs in Ota, its sales operations throughout the country and its activities at Nihon Michelin Tire Co Ltd. headquarters in Tokyo."
Michelin also stated for the aforementioned source that the financial effort necessary to shut down the plant will bring the group’s 2009 restructuring charges to a figure of 410 million euros.
The company added that it is currently negotiating with representatives of the employees to find an immediate solution to the unemployment problem, such as supporting the involved workers in finding a job in one of the Michelin Group production sites.
Other automotive component manufacturers have closed some of their production sites in an effort to reduce costs, such as the Swedish airbag and seatbelt manufacturer Autoliv (the company is the segment's world leader), which has planned to shut down 4 of its factories, cutting over 800 jobs.