Thursday, June 18, 2009

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Michelin cuts 1,093 jobs in voluntary scheme

Faced with plummeting demand, French tiremaker Michelin announced a plan on Wednesday to cut 1,093 jobs over a three year period, starting in 2010.

The company said the cuts will be made on the basis of voluntary departures and that no workers will be laid off. French media reports earlier this week had said Michelin would fire 1,500 workers.

Michelin said in a statement that 495 of the workers would leave as a result of retirement. Another 598 workers are to be offered some kind of position elsewhere in the company but different from their current job, a procedure known in France as ``reclassification.''

Michelin, which is based in the central French city of Clermont-Ferrand, has been caught in the economic turmoil that has hit the auto industry particularly hard.

In the statement, Michelin justified the measures that it said were due to ``an extremely competitive context, aggravated by the current crisis.''

Demand for tires is down globally as a result of the economic crisis, and Michelin already has furloughed workers this year in its plant in Oklahoma.

Michelin said in April that its sales fell 14.2 per cent to euro3.5 billion ($4.5 billion) in the first quarter as demand for tires slumped in all the company's markets other than China. Measured in volume, sales plunged 24.4 per cent during the first three months of the year.

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