EU tire giant to cut production in crisis-hit Germany

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Michelin, the French tyre company, plans to cut around 1,500 jobs in Germany by 2025 as competition from lower-wage countries and rising energy prices make Western European production unattractive.

Michelin will completely close its operations in Karlsruhe and Trier, as well as cease several products at its Homburg facility, the firm stated on Tuesday in Frankfurt. The decision will have an impact on 1,410 employees in all. The Karlsruhe facility, which is Michelin’s oldest in Germany, was established in 1931.

A further 122 positions will be lost at the customer contact centre in Karlsruhe, which will be relocated to Poland, according to the firm. According to the company’s website, the operation serves clients in Germany, Austria, and Switzerland, where Michelin employs over 8,000 people.

“The commitment of our employees, the progress made within the company and the investments made in recent years in the affected activities can no longer compensate for the strong competitive pressure,” Maria Rottger, president of Michelin’s Northern Europe region, explained.

German trade union IG BCE said it will not “simply accept” the plans and will look for alternative solutions.

According to the firm, “recent health and geopolitical crises” have increased operational costs, putting “additional strain on Germany’s competitiveness as an industrial location.”

Germany has faced growing economic difficulties since the EU decided not to buy cheap natural gas from Russia in response to the Ukraine crisis. Explosions destroyed the undersea Nord Stream pipelines, which carried Russian gasoline directly to Germany, in September 2022, reinforcing the decoupling. Berlin has yet to identify the culprits of the attack, which Moscow claims was likely orchestrated by the United States.

Some German politicians are encouraging the government to reconsider its hostile posture towards Russia, noting the economic harm done to their country.

“The economic sanctions are hurting us more than Russia,” Klaus Ernst, an MP from The Left party, said on X (formerly Twitter) on Monday.

“The result is skyrocketing energy prices, a sharp decline in production in the energy-intensive industry and a shrinking economy in Germany,” he added, calling for energy supplies to be ramped up, including from Russia, in order to rein in prices.