High Energy Prices Claim More Jobs
By Paul Homewood
The green dream claims more jobs.
Michelin is to shut its tyre factory in County Antrim with the loss of 860 jobs – blaming intense competition from Asia and high energy costs.
The reasons for the decision place further pressure on the Government as they largely mirror those given by steelmakers in recent weeks for the loss of thousands of jobs. Trade union Unite accused ministers of inaction.
Michelin said the Ballymena plant would be closed by mid-2018 under its proposals.
Union bosses warned that 500 contractors who work with Michelin will also be affected, together with many other local businesses whose trade relies on the plant.
The announcement was part of a wider shake-up of Michelin’s facilities in the UK, Italy and Germany, where it will also close a factory. The company said the moves would result in investment in its operations in Stoke-on-Trent and Dundee.
However, the news is devastating for Ballymena – coming on the back of the planned closure of another factory in the town.
The JTI Gallaher tobacco plant is due to close by the end of next year with 870 staff facing the axe.
The Michelin factory in Ballymena opened in 1969. Management figures have been warning for a number of years that high-energy costs were making production increasingly unsustainable.
North Antrim MP Ian Paisley Jr said: "This means the loss of millions of pounds of wages annually and is, frankly, hard to come to terms with.
"The North Antrim factory has put up a valiant fight, but today they have bowed their head."
Stormont First Minister Peter Robinson and Deputy First Minister Martin McGuinness said the closure was a "body blow" to the local economy and pledged to make every effort to alleviate the impact of the job losses.
Michelin said in a statement that it had been hit by "very aggressive competition and manufacturing overcapacity on the truck tyre market, heavy logistics costs due to its location and high production costs principally due to the price of energy".
An employee consultation process will begin immediately regarding the run-down proposal, the firm said.
Unite’s regional co-ordinator Davy Thompson said: "Ministerial inaction has resulted in a situation where high energy costs have left the Ballymena plant having the second lowest operating efficiency and now facing closure."
Manufacturers have been suffering from the effects of the strong pound while the Government has promised help to refund green levies for energy-intensive industry, subject to EU approval, to help bring their costs down amid the steel crisis.
Michelin’s decision was announced as the British Chambers of Commerce warned that UK export growth had slipped back to levels seen during the financial crisis.
Its director-general, John Longworth, called for action to address short-comings on skills, infrastructure and access to finance.
As with all these closures, there are a number of issues adding to a complex situation. However, businesses always operate at the margin, and in cases such as Michelin it may be that unnecessarily energy costs make the difference between closure and staying open.
What is clear is that there is little the UK government can do about the other problems mentioned, such as global oversupply and cheap imports. But they can, and should, do something about high energy costs now.