Michelin has secured agreement at central union level for three of its French plants to operate flexible working in a bid to address a drop in European demand.
The France-based tyre manufacturer is taking the step in response to weak passenger car and light truck tyre sales in Europe and a disappointing North American environment.
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First quarter sales were EUR4.9bn (US$6.3bn) – in line with its full-year outlook – but which were down 8.1% although slightly brighter news is expected on a fall in raw materials pricing.
But in a bid to smooth out the peaks and troughs of uncertainty, the tyre producer has asked its unions for a degree of flexibility when it comes to days worked and in a bid to avoid short-time working.
“We have agreed a deal at central level concerning the lowering of [European economic] activity [and] to avoid technical unemployment [short-time working]” a Michelin spokeswoman told just-auto from France.
“It has been agreed by unions that are centrally represented in France.”
Three factories – Michelin’s headquarters of Clermont Ferrand in central France – Vannes and Golbey – have accepted the deal at central labour body level – which would see unions agreeing to their members working up to five extra days per year in exchange for being paid full salaries even during difficult periods.
“It is the first time we have agreed this deal,” said the Michelin spokeswoman. “The crisis in 2008 we tried to have this agreement…for three or four years we have been trying to sign it.
“We are very happy the central unions accepted it. It is a good thing for the workers and gives us reactivity when things pick up. It allows [us] to lessen the impact of lowering of [economic] activity.”
Details of the flexible working – that would see the extra days worked when demand rises – will now go back to local union level for ratification although Michelin says there is no minimum number of site agreements necessary.
Michelin is due to implement a capital expenditure programme of EUR2bn to add production capacity in new markets.
For 2013, the tyre manufacturer expects to report stable operating income before non-recurring items and a more than 10% return on capital employed.
