Michelin and Bentley put on brakes as economy slides towards recession

Last week it was JCB, this week more of our region's big employers have been forced to balance rising stock levels and falling demand for their products by cutting jobs or scaling back production.

French tyre maker Michelin's Stoke works, which employs about 1,200 people, and Bentley Motors, which had built its staff at Pyms Lane in Crewe to 4,000 people, have both announced measures to ease the pressure as consumers tighthen their purse-strings and save, rather than spend.

The Sentinel reports that workers at the firm's factory in Campbell Road, Stoke, will lose three shifts in the week commencing November 24, as the company tries to scale back stock levels that have soared amid falling demand.

A move that follows just four weeks after the company revealed a shutdown this month and another over Christmas and the New Year.

Similarly, luxury car marque manufacturer Bentley is shutting down for five weeks this Christmas and scrapping its nightshift after sales were hit by the global spending slowdown.

It goes to show just how hard these global players are finding it, even in premium goods markets which can be shielded from a normal downturn in demand for your goods.

What it hides, however, is the impact that the downturn will have on the dozens of smaller suppliers to the manufacturers.

After all, research after the collapse of MG Rover in 2000 revealed that for ever job under threat at the company, economists reckoned there would between another two or eight staff in supplier companies who would be squeezed.

Of course, the world has changed a lot since 2000 when Michelin made 900 job cuts - something which hit the local economy hard.

Although Stoke-on-Trent's economy still retains a strong manufacturing heritage it has made great leaps towards a more mixed range of employment including call centres and distribution - although these might not be seen as true replacements for skilled manufacturing jobs.

But this has had the effect of shielding the region after a fall in demand for manufactured goods. That said, the fact 40,000 people of Stoke-on-Trent's 250,000 population are on benefits and the higher than the national average in terms of unemployed means the city is hardly super-charged for success.

From a regional perspective, however, it is important that major branded companies like JCB and Bentley can take measures to weather the storm as they act as a bell-weather for the economy locally - even if that is more on a symbolic level, rather than helping to drag people's prospects up by their bootstraps when the economy eventually bounces.