French multinational tire manufacturer Michelin announced it will close a plant in the state of Querétaro by the end of the year, but will not be leaving Mexico.
The tire-maker described its move as “a last resort,” explaining that changes in the passenger car and light truck tire market forced the decision on the company.
The plant, which opened in 2002, is configured to produce smaller tires. According to the company, the market has evolved toward larger rims and tires.
“The Querétaro plant will be closed because it has become obsolete,” a representative for the company told Reuters.
The plant closure will affect 480 employees.
Some of the Querétaro production will be moved to León in the neighboring state of Guanajuato. The León factory — operational since 2016 — is one of the company’s most modern plants globally, Reuters reported.
The Querétaro state government said the tire-maker will maintain a presence in the state. In addition to Michelin’s corporate operations in Querétaro city, the tire company will support other activities in the state.
Querétaro’s Sustainable Development Minister Marco del Prete said in a social media post that Michelin will continue to operate its Shared Services Center in the state.
Michelin México CEO Matthieu Aubron told Del Prete that the company will pay full severance to all 480 employees and will help them through the transition process, including providing support for job-training programs.
Michelin met with its Querétaro customers, the employees and community leaders to discuss arrangements, the newspaper El Financiero reported.
Del Prete said the state government will also offer services to the laid-off workers via the Labor Ministry and the state’s Institute of Entrepreneurship and Innovation.
Economy Minister Marcelo Ebrard was quick to point out that the plant closure was not a first step toward Michelin’s departure from Mexico, asserting that Michelin maintains its commitment to Mexico.
“Michelin informed the Economy Ministry that it has decided to merge its Querétaro plant with its plant in León, Guanajuato,” Ebrard said in a social media post. “The merger is being implemented because the latter produces tires best suited to the current Mexican market.”
The Querétaro factory was producing about 500,000 BF Goodrich tires per year for passenger cars and light pick-up trucks. The plant also features a workshop to retread or remold old truck tires.
With reports from El Economista, Infobae, Reuters and El Financiero
