Michelin Trims Labour Cost/Sales Ratio in 2007

Michelin is on track to improve its labour cost/sales ratio by 2 per cent annually, claim analysts. A report from Deutsche Bank shows that the group employs approximately 73,000 people in what are considered high labour cost countries; in 2007 natural attrition causes such as retirement saw 4,000 people from these countries leave Michelin. On top of this figure a plant closure in France saw 800 jobs cut; restructuring in Italy led to 200 redundancies; in Japan 500 jobs disappeared due to restructuring; and a thousand left the company in Spain as the result of ‘accelerated pre-retirements.’ Overall, 6,500 workers – 9 per cent of the workforce in high labour cost countries – left the Michelin group in 2007, a number Deutsche Bank calls “impressive.” The bank adds that, even if some of these workers are replaced – and less than half are expected to be replaced at a much lower wage rate – the Michelin group will be on track to meet the aforementioned labour cost/sales ratio improvement and to improve group productivity by 20 per cent by 2010.