Michelin job cuts at Granton plant 'devastating'

In a major blow to the economy of Pictou County and its tax base, Michelin North America (Canada) Inc. announced today it was slashing 500 jobs from its Granton tire plant over the next 18 months.

The company, which is Nova Scotia's largest private manufacturer, says the market for small car and truck tires is dropping and it’s too expensive to upgrade the 43-year-old Granton plant to make larger tires.

"This is devastating," said Barrie MacMillan, the mayor of nearby New Glasgow. "I didn’t see it coming. No one did."

Premier Stephen McNeil was more optimistic about future prospects for the plant. He suggested Michelin might tap new tire-making opportunities and bring production to Granton, or that a new company could be found to move in.

He said it was a tough day for workers and their families, but called Michelin a "good corporate citizen" that's done "tremendous work" in the province. He said the company has reached out to "cushion the blow for the families that are there."

“While this is a difficult day for the communities and families, I think we can, on past history, recognize that the Michelin family has been strong supporters of this province,” he said.

The first Michelin workers to lose their jobs will be those working in the small tire section of the plant. Close to 200 jobs will be cut by June 30, 2014.

Another round of layoffs to hit next year

Another round of layoffs will hit next year with 300 employees being cut by June 30, 2015 from other areas of the plant.

In all, half the workforce will be affected. Some work will continue at the plant, the company said, including the rubber mixing operation and the production of high performance tires and tire membranes.

It's a tough day for a plant that employs second and even third generation workers, says Grant Ferguson, the president of Michelin Canada. 

Ferguson said workers who lose their jobs will be able to relocate to its two other Nova Scotia plants. One is in Waterville, which is expanding, and the other is in Bridgewater.

"We’re committed to Nova Scotia, we’re committed to remaining here," he said. "We have an issue in one tire-making facility that we are addressing today."

Severance packages are also available.

Michelin said it has invested $500 million in its Nova Scotia operations in the last eight years. It said it spent $66 million in the last year alone. It employs roughly 3,500 people in the province, according to its website.

The job losses come just weeks after the release of the Ivany report, which looked in detail at the Nova Scotia economy. The report bluntly warned the province "hovers now on the brink of an extended period of decline."

The faltering economy is a particularly acute problem in rural Nova Scotia, the commission found. It called it a crisis that "does threaten the basic economic and demographic viability of our province."

The chief administrative officer of the Municipality of Pictou County says the cuts at Michelin will mean a dramatic hit to tax revenue in the area.

"It’s been a complete shock today," Brian Cullen said. "We’re still trying to grapple with the news."

Michelin, he said, is one of the largest corporate taxpayers in the region. There's also a fear that if workers and their families leave the area, a glut of homes will be put on the market, leading to plummeting housing prices and assessment values.

"It’s somewhat, I guess, surreal," he said. "Just trying to fathom and kind of get a handle on what kind of impact it will have directly for the community."