Michelin will slash production at Opelika plant

July 11, 2006

Michelin North America Inc. will cut production at its BFGoodrich tire plant in Opelika, Ala., by 30% to 40% starting the fourth quarter of 2006 due to overcapacity.

"The mass market tire segment has been shrinking over the past several years and also is experiencing intense cost pressure due to imports from competitors in lower-cost countries," say Michelin officials.

The cutback will result in the indefinite layoff of 30% to 40% of the plant’s employees.

The Opelika plant produces BFGoodrich, Uniroyal and private and associate brand passenger and light truck tires, primarily for the U.S. market. It has the capacity to build 19,000 passenger and 4,000 light truck units per day, according to Modern Tire Dealer research.

The factory employs 1,300 hourly and salaried employees.

Michelin is currently in talks with the United Steelworkers to forge a new labor contract for the Opelika facility, plus two other BFGoodrich tire manufacturing centers.

Steelworkers Executive Vice President Ron Hoover says Michelin's decision is not related to productivity.

"It's about marketing and that's why we're working to secure the long-term viability of the Opelika plant by negotiating capital investment expenditures that will enable Opelika to upgrade the products it produces," he says.