Wednesday, French tire maker Michelin SA (MGDDF.PK) announced a voluntary separation plan that expects 1093 job cuts. The company also said it will upgrade its global research and development center in Clermont-Ferrand, with investment of more than 100 million euros.
Michelin noted that the voluntary separation plan is part of its continued specialization of a number of industrial operations in France. As per the plan that is open to all employees, nearly 495 of the 1,093 employees impacted will get the advantage of special early-retirement measures and the other 598 to benefit from internal placement opportunities. Michelin said it intends to carry out the reorganization without any layoffs, and would offer each of the affected employees a choice of at least two positions at its plants in France.
According to the company, the upgrade program for its research and development center aims to shorten time-to-market cycles for tires and services and to enable the development of more innovative manufacturing processes.
Michelin pointed out that the project reflects its commitment to strengthen France's role as Michelin's strategic hub and innovation center, and to enhance the productivity of its manufacturing operations in an increasingly competitive global marketplace.
Further, in order to enhance the specialization of its production sites, Michelin said it plans to develop the Montceau plant into a high-performance facility for earthmover tires, with the deployment of a 50 million euros capital spending program. Meanwhile, the facility's current car tire operations will be consolidated with those of other company plants in Western Europe. In the Tours plant, the company would make an investment of additional 15 million euros to continue upgrading plant installations, and its operations will be reorganized and specialized to make the facility more competitive, which will result in closing the rubber compound unit and the transfer of its production to its plants in Montceau and Cholet. Michelin also plans to continue to produce premium tires in France by transferring production at the Seclin facility to Les Gravanches plant near Clermont-Ferrand, and also to strengthen light truck and SUV tire manufacturing operations at the Cholet plant by integrating light truck tire production from one of its European plants. Simultaneously, Michelin Development will launch a program to revitalize the regions impacted by the reorganization.
The company also said that the latest decisions further demonstrate its commitment to maintaining a solid manufacturing base in France, and that it plans to hire about 500 people a year over the next three years to refresh its age pyramid.
MGDDF.PK last traded on June 1 at $62.25.
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