“In this crisis, there is no more business as usual.”
With those words, the head of Michelin North America said Monday his firm is shutting down its BFGoodrich tire plant in Opelika, Ala., about 30 miles northwest of Columbus.
About 1,000 jobs will be lost after the closure takes effect by Oct. 31. About 800 of the jobs are production, and 200 are management.
“Business decisions that directly impact the lives of our employees are extraordinarily difficult,” said Dick Wilkerson, chairman and president of Greenville, S.C.-based Michelin North America. He called the action necessary for the “long-term health and competitiveness” of the tire manufacturer.
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The recession has driven consumers to purchase fewer vehicles and hold off purchasing replacement tires, the company said. The Rubber Manufacturers Association expects North American tire sales to fall for the second year in a row, with no rebound in sight.
Michelin said it will offer the 1,000 dismissed employees in Opelika separation pay and benefits, though it gave no specifics. It also will create a job development program to help place laid-off workers with other area industries.
But Wendi Routhier, president of the Opelika Chamber of Commerce, said the union jobs — which paid as much as $25 per hour — will be hard to replace. Many of the Kia auto parts suppliers locating in the area have projected pay scales in the $11- to $15-per-hour range.
“That would just be an adjustment to the true wage scale in our area,” Routhier said. “You will find another job, but it may not be at $20 to $25 an hour.”
The 1 million-square-foot Opelika factory, which also makes Uniroyal tires, opened in 1963. Most people in Auburn and Opelika know someone who works at the plant, Routhier said.
“The ones you are really going to feel the sorriest for are the ones that have worked there for years and years and years,” she said. “Just like at (now-closed textile plant) WestPoint Stevens, that’s where they had anticipated retiring, and they may have been just a few months or a few years away.”
The Lee County metropolitan statistical area has a work force of about 60,000; more than 120,000 are in the Columbus metro area.
Lee County posted an unemployment rate of 7 percent in February, which ties it with Coffee County for the third-lowest jobless level in Alabama. Neighboring Chambers County is the second-highest in the state at 18.9 percent.
“It’s certainly, certainly going to hurt our area,” Routhier said of the BFGoodrich shutdown. “But we’re in a much better position to deal with that than, say, if you were in a community and that was the only cat in town.”
Lee County is home to Auburn University, a major employer, and has developed a diverse manufacturing base, particularly in automotive. It also has become more of a retail hub.
Opelika Mayor Gary Fuller said Michelin officials warned his city in December that the tire business was tough and getting tougher.
“We’ll get through this,” he said. “We’ve been making tires in Opelika for 45 years, so Oct. 31 isn’t a day we’re looking forward to.”
Aside from Opelika, Michelin North America said it also is consolidating production at its plants in Tuscaloosa, Ala., and Fort Wayne, Ind. It did not provide specifics.