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Investing.com -- Tire manufacturer, Michelin (EPA:MICP), has announced plans to close its Queretaro factory in Mexico by 2025, a move that will affect 480 employees. The decision comes as the factory, which is set up to produce smaller tires, has become obsolete in a market that is gradually shifting towards larger products.
According to information from Citi, the Queretaro facility produces less than 500,000 BFGoodrich tires annually. The closure will leave Michelin with only one factory in Mexico, a state-of-the-art facility in Leon that was opened in 2016. This move aligns with Michelin’s strategy of focusing on larger, more profitable products.
The closure of the Queretaro factory follows a series of similar actions by Michelin in recent years. The company has closed factories in France, Germany, Poland, China, and the United States between 2024 and 2025.
Despite the closures, Michelin continues to target a €4.2 billion SOI in 2026, which would represent a 14% margin. The company aims to achieve this mainly through a mix of products but also through operating efficiency measures.
According to Citi, these actions should support the group’s mix and margins, potentially providing up to a €300 million EBIT restructuring benefit in FY26 compared to FY24 from combined measures. It’s also noted that previous announcements of this nature have generally had a positive effect on Michelin’s share value.
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