Michelin to Shut Japanese Plant

The company has been investing heavily in building new plants in emerging markets such as India and Brazil, where labor costs are lower than in Japan.

The Ota plant north of Tokyo that will be closed employs about 380 people. Production will be moved to other sites in Asia, Europe and North America, the company said on Jan. 15

The company blamed the move on the global economic crisis and the high production costs at the plant.

"Despite measures taken, in particular since 2006, to improve productivity, reduce production costs and, from 2007, refocus on the production of complex products such as X Ice tires, the production cost at Ota plant remains around twice as high as those of other plants serving that tire segment," it said.

Michelin has been investing heavily to build new plants in fast-growing emerging markets such as India and Brazil, where labor costs are lower than in Japan.

The French group, stung by a slump in sales, is cutting more than 1,000 jobs in France.

Michelin said it would retain a presence in Japan, home to its arch-rival Bridgestone, with research and development programs and a sales network in the world's number two economy.

It said it would help the Ota plant employees look for new jobs, either with Michelin or elsewhere.

Japan's Bridgestone, which vies with France's Michelin to be the world's top tire maker, has also been hit hard by the global economic downturn, which triggered a slump in sales of cars and other vehicles. In October Bridgestone said it would shed nearly 900 jobs in Australia and New Zealand as it closes manufacturing plants there.

Copyright Agence France-Presse, 2010

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