Michelin job cuts at Granton plant 'devastating'

In a major blow to the economy ofPictouCounty and its tax base, Michelin North America (Canada) Inc. announced today it was slashing 500 jobs from itsGrantontire 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 its 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 didnt see it coming. No one did."

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

He said it was a tough day for workers and their families, butcalled Michelin a"good corporate citizen" that's done "tremendous work" in the province. He said the company hasreached 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 Michelinworkers to lose their jobs will be those working in the small tire section of the plant. Close to 200jobs will be cut by June 30, 2014.

Another round of layoffs to hit next year

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

In all, half the workforce will be affected. Some workwill 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 aplant that employs second and even third generation workers, saysGrant Ferguson, the president of Michelin Canada.

Ferguson said workers who lose their jobs will be able to relocate to its two other NovaScotiaplants. One is inWaterville, which is expanding, and the other is inBridgewater.

"Were committed to Nova Scotia, were 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 theIvanyreport, which looked in detail at the NovaScotiaeconomy. The report bluntly warnedthe 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 administrativeofficer of the Municipality of Pictou County says the cuts at Michelin will mean a dramatic hit to tax revenue in the area.

"Its been a complete shock today," Brian Cullen said. "Were 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 familiesleave the area, a glut of homes will be put on the market, leading to plummeting housing prices and assessment values.

"Its 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."