Michelin’s OE Business 40% Down in North America – Wilkerson

Michelin North America’s Dick Wilkerson has engaged in a further tête-à-tête with his local newspaper, and he is clear that the company is “committed to manufacturing our product in North America and selling it in North America.” The regional operation’s chairman and president told The Greenville News that around 90 per cent of the company’s North American sales tonnage is produced on the continent, including at its Mexican and Canadian plants. These four factories complement Michelin’s 11 major US manufacturing facilities.

The three North American markets account for approximately 32 per cent of Michelin’s global sales, yet in recent months the recession has bitten hard into the company’s turnover. “The original equipment market has cratered,” said Wilkerson, citing a 40 per cent decline in demand. An estimated 9.1 million new cars will be sold in this market during 2009, a significant drop from a highpoint 16 million a few years ago. “The replacement market is down, too,” he added, commenting that last year consumers drove about 107 billion fewer miles than the year before.

Analysts at Michelin anticipate that the recession will have reached its lowest point by either late 2008 or early 2009, and conditions will improve from that point onwards. Wilkerson states that Michelin must be ready to rebound as soon as the economy does. “When the demand comes back, we will have to respond,” he said. “We try to keep our eye on the long term so we can respond quickly and have the company structured properly.”