Due to competitive market demands, French tyre maker Michelin’s North American subsidiary says that the company will begin winding down tyre production at its Ardmore site in Oklahoma, with the goal of completing the process by year-end 2025 or sooner. Rubber-mixing operations at the Ardmore factory are expected to continue.
The wind-down decision impacts approximately 1,400 people associated with tyre-manufacturing activities (excluding additional contractors) at the Ardmore site, which has produced passenger tyres since 1970. Tyre production will gradually shift to Michelin’s other passenger-tyre plants in North America.
North America’s passenger-vehicle market is changing rapidly and profoundly. Despite substantial investments over the past five years to improve technical capabilities and competitiveness, Michelin says it has concluded that the Ardmore factory is not equipped to deliver tyres at competitive costs that will meet these evolving market demands in the coming years. Continuing investments to modernise the Ardmore plant would negatively impact other US sites in the network.
Fundamental market conditions driving Michelin’s decision include:
- the dominance of light trucks and cross-over vehicles in North America, which require ever-larger tyre sizes;
- dynamic market transition to electric vehicles; and
- customers’ requirements for continual improvements in rolling resistance and other sustainable materials technologies.
Taken together, these factors add substantial complexity to the company’s portfolio, which in turn requires much greater industrial flexibility.
Precise timing has not been determined for specific phases of the wind-down. Based on the current outlook for market demand, however, operations at the Ardmore plant are expected to continue trending gradually lower until mid-2024, when the first wave of staffing reductions will occur. Additional reductions are expected to occur in phases through 2025 as transition plans are finalised.
Michelin’s rubber-mixing operations at the Ardmore plant supply other factories in North America. After tyre-manufacturing activities wind down, these rubber-mixing operations are expected to continue for the foreseeable future.
“Michelin has strived to be a good steward in every chapter for this plant and community. Winding down operations is the hardest of all business decisions,” said Terry Redmile, senior vice president of manufacturing for Michelin Group’s Americas Zone.
Over the coming days and weeks, representatives for the company will discuss separation benefits individually with each person who works in the factory. Michelin will offer retention bonuses going forward to achieve a smooth transition for employees and customers.
When staffing reductions begin in 2024, Michelin will offer a combination of early retirement, separation benefits and financial incentives for relocation support.