Michelin's North American tyre operations have succumbed to the US slowdown and will result in the firm deflating its workforce by 2,000 jobs, 7% of its workforce.

The French tyre maker cited weak demand for its tyres as the reason for the cuts. It will take a $100m (�68.6m) charge against profits in the second half of 2001 to pay for the costs associated with layoffs.

The company, which intends to complete the job cuts by the end of 2003, said it expects to achieve the reduction in workforce almost entirely through voluntary severance programmes and normal attrition.

"Overall demand for passenger cars and light-truck tyres, both replacement and [original equipment manufacturers] is down about 6%," said spokeswoman Nan Banks in a written statement.

"Heavy trucks continue to go down, and we don't see any improvement until the end of the next year's second quarter," she said.

Firestone recall

Since announcing in April its intention to cut costs, Michelin, whose American headquarters are located in Greenville, South Carolina, has said job reductions were "highly possible."

Monday's announced redundancies do not target any one job classification, location or region, the company said.

Michelin's cuts come amid slack demand in the US for tyres despite a massive recall campaign by both Bridgestone/Firestone and Ford Motor over faulty Firestone Wilderness AT tyres.

In August 2000, Ford began recalling 6.5 million Firestone tyres, most installed on its Explorer sport-utility vehicle, following reports of sudden blow-outs and tread loss.

Federal officials are investigating over 200 deaths and more than 700 injuries linked to the Firestone tyres

Michelin was one of the first tyre makers named by Ford as a replacement manufacturer when Ford discontinued using Firestone-brand tyres on its vehicles.

Akron, Ohio-based Goodyear Tire & Rubber was also named by Ford as a supplier.

But Goodyear has also said that it is cutting back on production and laying off nearly 8,000 employees worldwide.

Beleaguered Firestone has announced it will close its Decatur, Illinois, plant, where it is believed a majority of the faulty tyres were produced.

Firestone expects as many as 1,350 workers will lose their jobs.