PARIS (AP) -- Faced with plummeting demand, French tiremaker Michelin announced a plan Wednesday to cut 1,093 jobs over a three year period, starting in 2010.
The company said the cuts will be made on the basis of voluntary departures and that no workers will be laid off.
French media reports earlier this week had said Michelin would fire 1,500 workers.
Michelin said in a statement that 495 of the workers would leave as a result of retirement. Another 598 workers are to be offered some kind of position elsewhere in the company but different from their current job, a procedure known in France as "reclassification."
At the same time, Michelin also said it planned to hire about 500 new employees each year for the next three years to renew its workforce.
Finance Minister Christine Lagarde vowed the French government would oblige Michelin to invest sufficiently in the reclassified workers.
"We'll personally make sure that happens" she told lawmakers Wednesday.
Michelin, which is based in the central French city of Clermont-Ferrand, has been caught in the economic turmoil that has hit the auto industry particularly hard.
In the statement, Michelin justified the measures that it said were due to "an extremely competitive context, aggravated by the current crisis."
Demand for tires is down globally as a result of the economic crisis, and Michelin already has furloughed workers this year in its plant in Oklahoma.
Michelin said in April that its sales fell 14.2 percent to euro3.5 billion ($4.5 billion) in the first quarter as demand for tires slumped in all the company's markets other than China. Measured in volume, sales plunged 24.4 percent during the first three months of the year.
Michelin also announced Wednesday proposals to modernize its research facilities and promote innovation in tire development.
The company will put euro100 million into its center for research and development in its home city of Clermont-Ferrand, sink euro15 million into tire development for trucks at a plant in the French city of Tours, and euro50 millions into development of mixed rubber at a factory in Moncteau.