Michelin Sells Northern Ireland Plant After Sales Decline
The tire manufacturer is selling the factory to a business park developer.
Michelin, the company that produces tires for trucks, automobiles, motorcycles, bicycles, and agricultural vehicles, will close its Ballymena factory in Northern Ireland at the end of this month. Hundreds of employees will be jobless as a result.
The company made the decision in 2015, but it was a long time coming. In 2008, Michelin’s operating profit decreased by 17.8 percent. Michelin shed 5,000 jobs in 2009. In 2014, truck tire sales fell 12 percent and car tire sales fell 10 percent. Between 2007 and 2014, Michelin’s sales decreased by $5 million.
Because of these financial troubles, Michelin was also unable to pay for the amount of energy the Ballymena plant produced. A rep from Unite, the region’s workers' union, told The Guardian that Michelin needed to modernize its plant with new machinery, but did not have the capital.
“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,” he said.
Michelin sold the land to Silverwood Business Park Limited, a manufacturing giant that currently houses facilities along Ireland’s M1 Motorway that connects the north and south regions. Silverwood plans to turn the land into a manufacturing plant, office spaces and warehouse hub, and create several hundred jobs.
But Silverwood will only build on 58 acres of the 68-acre property. Michelin has chosen to gift the remaining 10 acres to the East Antrim Borough Council, the local governing body. EABC plans to build a Heathrow Logistics Hub. The ever-expanding London airport announced last year that it would build 65 factories throughout the U.K.’s 12 regions, and a total of three in Northern Ireland.
Michelin will invest the profits from Silverwood into its other Ireland factories, Stoke-on-Trent and Dundee. The company will compensate Ballymena’s 900 employees through June this year. According to Michelin, 43 Ballymena employees have already transferred to other locations, 65 have retired, and 260 have found new jobs. But this still leaves nearly two-thirds of the employees jobless.
Michelin isn’t the only tire company to downsize. Goodyear recently closed factories in England and Germany, and Firestone announced it would close its Canadian plant by the end of the year.
Though the factory closure was a result of cumulative decreasing sales, Michelin increased its net sales by 12.5 percent last year and plans to sell more truck tires in 2018. Michelin, which began in France in 1953, currently has 68 plants in 17 countries, the majority of which are located in the U.S. and Europe.
Michelin also just announced it will acquire Fenner, a U.K. conveyor belt company, for $1.7 million, in an attempt to expand its offering to more than just rubber tires. The new products include mining materials and gas pumps. This acquisition will also create 400 more jobs for the company. Perhaps employees from Ballymena will relocate to Fenner’s England headquarters.