PARIS (Reuters) -- Michelin plans to close its truck tire plant in Budapest, Hungary, in response to adverse trends and aggressive competition in the European market.
"The decision reflects the fact that extending the facility is no longer possible, due to its location in an urban setting, and that improving its competitiveness would require excessive upgrading with new equipment," Michelin said.
The move will lead to a 39 million euro ($54 million) provision for non-recurring expenses in its first-half accounts relating to the closure, Michelin said in a statement today.
The Budapest plant’s production will be reallocated to the Michelin facilities in Karlsruhe and Homburg, Germany, Olsztyn, Poland; and Zalau, Romania, starting next year.
Michelin will continue to produce high-performance car tires at its plant in Nyiregyhaza, Hungary. It also will maintain operations of its logistics center in Vac, Hungary, which serves countries in central and southern Europe, and its strategic raw materials marketing unit in Tuzser.