HUNDREDS of Scottish jobs are at risk at a Michelin tyre factory after a fall in global demand in a move which comes just a year after it received £4.5million in public cash to fund an expansion programme.

The French headquartered group said the market had also been flooded by cheaper products from Asia.

Michelin stressed it was working to “meet these market challenges” but management at the Dundee site have told the 850-strong workforce they could face job cuts or changes to shift patterns – or a combination of both – as a result of the downturn.

The site is now slated to produce a maximum of 5.4 million tyres per annum over the next three years, a figure which falls roughly 25% short of the facility’s seven million-plus peak production capacity.

A Michelin statement said: “Michelin Dundee continues to face extremely challenging trading conditions, primarily due to the influx of cheap tyres from Asia and falling demand for premium tyres in smaller dimensions.

“Production for the next three years is forecast to be a maximum of 5.4 million tyres a year, which is significantly below capacity.

“We are working with employees, unions and the Michelin Group to meet these market challenges.

“We will explore all options to maximise the efficiency of the plant, and those options could include restructuring working patterns and reducing headcount.

“Michelin Dundee continues to appreciate the hard work and flexibility of its employees, and we will update them before the end of the year.”

Last year Scottish Enterprise allocated £4.5m into new production machinery in addition to a £12m investment by Michelin to support increased demand for larger tyres in the Dundee factory last year.

First Minister Nicola Sturgeon announced the funds would pay for a series of improvements at the site, including bringing in new technology aimed at bringing about a substantial drop in CO2 emissions.

The funding package was revealed by First Minister Nicola Sturgeon as she visited the factory, which employs 850 workers.

Union leaders reacted with dismay at the announcement which they blamed on an influx of cheap foreign imports from Asia into the European market and falling demand for premium tyres in smaller dimensions.

Unite the union has been working with trade union partners on the European Works Council (EWC) in discussion with the company to consider a series of measures to address the issue of cheap imports into Europe from Asia.

Unite recently launched its ‘Steer Well Clear’ campaign which is putting pressure on the UK government to take action to ensure that mislabelled inferior Asian tyres are no longer being dumped on the UK market.

They also want drivers to be better educated about the potential dangers of mislabelling and using inferior tyres.

Under provisional regulations published by the EU, inferior quality tyres made in China for use on buses and lorries will be subject to anti-dumping duties of between 29 per cent and 68 per cent.

Senior Shop Steward at Michelin Dundee Marc Jackson said: "Unite the Union has been aware over the last few months of the challenging market situation in close dialogue with our European partners.

"The reduction in production will impact the Dundee site more than any other site within the Michelin group, as we manufacture smaller tyre dimensions. Unite have always worked together with Michelin through difficult periods and we will continue to do so.

"We understand this is one of the most challenging periods we have faced as one of the main reasons for the announcement is an influx of cheap imports from Asia.

"At this moment in time our members can be assured that we will be looking to protect their terms and conditions and to maximise jobs on site. "The union and the company are working hard to deal with these issues and to give the factory the best opportunity going forward and to be as competitive as possible.