Michelin North America will close its BF Goodrich tyre manufacturing plant in Opelika, Alabama by 31 October with the loss of about 1,000 jobs.

"The decision comes in the wake of the continuing economic crisis as consumers are driving fewer miles, purchasing fewer vehicles and delaying tyre replacement purchases," the French tyremaker's US unit said in a statement.

"The dramatic drop in market demand has created significant overcapacity in the North American tyre markets that Michelin does not expect to rebound in the near term. According to the Rubber Manufacturers Association, North American tyre sales volume is expected to decline for the second year in a row in 2009."

Michelin North America chairman and president Dick Wilkerson added: "This action is necessary, however, for [our] long-term health and competitiveness. In this crisis, there is no more business as usual."

The Opelika factory produces BFGoodrich and Uniroyal brand passenger car tyres and currently employs about 1,000 wage and salaried workers. Michelin will consolidate production at facilities in Tuscaloosa, Alabama and Fort Wayne, Indiana and will work with local authorities to help the sacked Opelika workers find new jobs.

The company said it would be better able to fully use the capacity of its remaining Michelin and BFGoodrich facilities in North America, after the closure, accelerating work already under way to reduce costs and improve competitiveness.

The company's strategy is to manufacture in the markets where its tyres are sold it said, adding that over 85% of the tyres it sells in North America are made there.

Michelin North America currently has 22,600 workers and 19 major manufacturing plants in 17 locations.