Tyre maker Michelin is closing its Dundee factory and cutting 845 jobs, the company announced on Tuesday.
The group said it will shut the plant by mid-2020, because of a decline in demand for the kind of tyres it manufactures, and competition from Asia.
Michelin’s Dundee site, which has been open since 1971, specialises in manufacturing 16in and smaller tyres for cars.
The company said the factory had faced “serious difficulties” in recent years because of a “profound transformation” in the number of cars on the market, and due to an “accelerated shift” towards “low-cost, entry-level products” from Asia.
Michelin said it had invested €70m (£61m) in the Dundee site in recent years, but added: “Despite the group’s continuous efforts, and the factory employees’ dedication to making the site economically sustainable through the implementation of several action plans ... the accelerated market transformation has made the plant unsuitable and its conversion is not financially viable.”
Michelin said it will begin a consultation process with employees within the next two weeks.
As part of its support programme, the company said it will “propose a comprehensive plan to assist the employees concerned to start a new career as quickly as possible”.
The closure of the factory is the latest sign that the UK car market is struggling. Figures published by the Society of Motor Manufacturers and Traders this week showed new vehicle registrations dropped in October, and the new car market so far in 2018 is 7.2 per cent behind where it was at this point last year.
Meanwhile, several car manufacturers have said Brexit is impacting business. Jaguar Land Rover has moved workers at its Castle Bromwich plant to a three-day week because of “continuing headwinds impacting the car industry”, and BMW said it would move a planned shutdown of its Mini plant in Oxford forward to coincide with the beginning of Brexit in order to minimise the risk of disruption.
