Dundee’s Michelin tyre plant will shut down for three weeks later this month as the multinational firm tackles a drop in sales caused by the financial crisis in Europe.
Workers at the Baldovie plant have been told it will stall production for three weeks in an effort to curb production volumes. Production lines are expected to fall silent from the end of this month until mid-June.
Staff will be asked to undertake training and stay off work during the closure. Planned holiday shutdowns in July and August will also be extended.
The firm said the downturn in the eurozone has led to ”very challenging” conditions for manufacturers particularly in southern Europe while the mild winter also hit revenues for winter tyres.
Site personnel manger Ian Peart stressed there is no threat to full-time jobs or planned investment worth millions of pounds.
”We’re in a situation in which the impact of circumstances in the eurozone is beginning to affect demand for our tyres,” he said. ”Since the start of the year, we’ve been slowing our production using our own range of built-in methods. But we’ve got to the stage now where we have to take a chunk out of production for three weeks.
”There is no threat to jobs and no impact on our investment plans.”
Around 860 staff will be asked to go to work for four of their nine scheduled shifts during the shutdown, when they will undertake training and other duties. They will be told to stay away for the other five, on full pay, on the understanding that they work back the hours later in the year or in 2013.
Other Michelin factories across Europe will follow suit with similar production-slowing measures.
The Baldovie plant has already cut the number of temporary staff on its books. And, faced with similar pressures three years ago, the company cut the factory’s working week to four days in order to slow production and save jobs.
The firm last year announced its intention to install a new production line for production of the eco-friendly ”tyres of the future”.
It made bids for funding through a Scottish Government regional selective grant and an internal investment round run by the French manufacturing giant.
Mr Peart added: ”Obviously people will be concerned because this is not good news. People will inevitably ask the question about what the future holds, but all we can say is that we will monitor the situation.
”These actions are the actions that we need to take just now, but the business remains optimistic. All we need to do is weather the storm and get through this temporary slowing of the markets.”
A company statement added: ”These issues reflect not only the current challenging economic situation across Europe, but a shift in the market towards bigger tyres.
”Whilst the strategy for the factory remains growth and the introduction of new tyre-making machines, which will allow the plant to make the tyres of the future, the current market conditions have led Michelin to slow its investment in the Dundee plant to better match the growth now foreseen in these markets.
”This change will not impact on jobs in the factory but will delay some of the investment plans announced in 2011 during the next five years.”
The site first warned that production was to be ”eased” in March, after posting a 15% rise in revenues to £15.6 million in 2011.
Michelin’s site at Baldovie is Scotland’s only tyre factory and this year celebrates 40 years in the city.