Hundreds of jobs are at risk at Michelin’s tyre factory in Dundee amid claims that cheaper foreign imports are having an impact.
The group says there has been a fall in global demand for its products.
It also claims to have been flooded by cheaper products from Asia.
Management at the Dundee site have told the 850-strong workforce they could face job cuts or changes to shift patterns – or a combination of both – as a result of the downturn.
The site is now slated to produce a maximum of 5.4 million tyres per annum over the next three years, a figure which falls 25% short of the facility’s seven million-plus peak production capacity.
>> Keep up to date with the latest news with The Tele newsletter
A company statement said: “Michelin Dundee continues to face extremely challenging trading conditions, primarily due to the influx of cheap tyres from Asia and falling demand for premium tyres in smaller dimensions.
“Production for the next three years is forecast to be a maximum of 5.4 million tyres a year, which is significantly below capacity.
“We are working with employees, unions and the Michelin Group to meet these market challenges.
“We will explore all options to maximise the efficiency of the plant, and those options could include restructuring working patterns and reducing headcount.
“Michelin Dundee continues to appreciate the hard work and flexibility of its employees, and we will update them before the end of the year.”
Marc Jackson, senior shop steward at Michelin Dundee, said: “Unite the Union has been aware over the last few months of the challenging market situation in close dialogue with our European partners.
“The reduction in production will impact the Dundee site more than any other site within the Michelin group, as we manufacture smaller tyre dimensions.
“Unite have always worked together with Michelin through difficult periods and we will continue to do so.
“We understand this is one of the most challenging periods we have faced as one of the main reasons for the announcement is an influx of cheap imports from Asia.
“At this moment in time our members can be assured that we will be looking to protect their terms and conditions and to maximise jobs on site.
“The union and the company are working hard to deal with these issues and to give the factory the best opportunity going forward and to be as competitive as possible.”
Scottish Enterprise allocated £4.5m into new production machinery in addition to a £12m investment by the Michelin Group to support increased demand for larger tyres in the Dundee factory last year.