Apollo Tyres on Thursday said it will cut 750 jobs at its plant in the Netherlands over a period of two years in order to have a "sustainable business" and focus on producing only high-value tyres.
The home-grown tyre major had acquired Vredestein Banden BV (VBBV) for an undisclosed sum in 2009 from Russia's bankrupt largest tyre manufacturer Amtel-Vredestein NV.
Apollo Vredestein BV (AVBV) had a meeting with its employees to discuss the future of the plant in Enschede and the company's plans to build a more sustainable business in the Netherlands, Apollo Tyres said in a statement.
AVBV intends to specialise the production in Enschede to a level where only high-performance Vredestein tyres will be produced at a profitable level, it added.
"Aligning the plant to the intended specialised and sustainable production level, will unfortunately result in AVBV having to reduce its workforce in the Netherlands by around 750 full-time employees, over a period of 24 months," Apollo Tyres said.
Explaining the rationale behind the step, the company said: "Within the current operating environment certain tyre sizes can no longer continue being produced in Enschede at a sustainable and competitive level. The company therefore intends to specialise the plant towards high-value tyres and to secure a sustainable future in the Netherlands."
"The operating environment for AVBV and the entire tyre industry has changed significantly over the last few years," Apollo Vredestein President Benoit Rivallant said.
Despite large investments made in recent years in modernising the plant, the factory employees' dedication and continuous efforts to make the site economically viable has proved ineffective against the accelerated market transformation and has required a strategic adaption of the site to secure it has a sustainable future in the long run, he added.
"After a deep analysis of the profitability and sustainability of the products currently produced in the Enschede Plant, we regrettably could not arrive at a different conclusion," Rivallant said.
The company is aware that its employees and their families will face a great deal of uncertainty as a result of this difficult decision, he added.
"As a responsible employer we will comply with all statutory obligations towards our employees. We will regularly inform our employees about developments within this process and offer them all necessary support and assistance," Rivallant said.
The strategic aim is to specialise the Enschede plant to an extent where AVBV will only produce agricultural tyres and high value niche segment passenger car tyres with a short production run, the tyre maker said.
The plant in Enschede will become the centre of excellence for quality, innovation and production agility, it added.
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