Again, Michelin has cut its full-year market forecasts, pointing out a sharper-than-expected downturn in the truck segment.
The group, which said two weeks ago it would close a French plant in response to deteriorating conditions of the auto industry, also posted a 8.9% increase in third-quarter revenue to 6.115 billion euros ($6.78 billion).
In a statement, Michelin explained that the truck tyre markets are now expected to end the year down 4%, versus a previous forecast of a 2% decline.
The group confirmed it expects a segment operating income exceeding the 2018 figure at constant exchange rates and before the estimated 150 million euros contribution from the Fenner and Camso businesses. It also expects a structural free cash flow of more than 1.45 billion euros. ($1 = 0.9013 euros)
Recently. the French company announced the closure of a factory in Germany with 858 employees by 2021, and last year said it would shutter a plant with 845 employees in Scotland.
Regarding the closure of its plant at La Roche-sur-Yon in western France, Michelin promised a “support plan” for affected employees, and said it would offer every one a chance to remain in the company in France.
It would also seek out “a major public-private project” in a bid to relaunch the failing site.
Michelin said 74 people who work at a factory in nearby Maine-et-Loiret, manufacturing rubber for the site in La Roche-sur-Yon, will also be affected.
Michelin has been hit hard by the lacklustre performance of the auto industry.
Its CEO Florent Menegaux said last month that a 70-million-euro ($77-million) investment had been unable to save the site at La Roche-sur-Yon.
He blamed “difficulties in the market for high-end heavy-duty tyres both in Europe and abroad”, coupled with “increased competition”.
By the end of last year, Michelin employed about 110,000 people in different countries, including 20,000 in France.
