Michelin Celebrates ‘Navy Week’, but has Goodyear Trained its Guns on Military Contracts?

Representatives from the US Navy may have hauled up their anchors and, as it were, set sail for Greenville, South Carolina during October’s Navy Week 2009 festivities, but whether Michelin North America has grounds for continued celebration remains to be seen. While Michelin is currently top dog in the US military supply game, a defence bill passed by the US House of Representatives in late July opens up bidding on military contracts to other potential suppliers.

Michelin was awarded a contract to supply 100 per cent of all aircraft tyres to the Navy in 2001, and in 2007 the company became sole supplier of tyres for US Military wheeled vehicles.  While the Navy aircraft tyres are produced at the company’s Norwood, North Carolina plant, some tyres supplied to Uncle Sam are made in Canada. A further insult to some Americans is that these Canadian tyres are produced by – oh the humanity – a French company.

The 2010 Defense Appropriations bill has the potential to change all this. A section of the bill, under the sub-heading “Military Tires”, reads: The Committee [of Appropriation] is pleased that the Department [of Defense] has dramatically reduced the cost and streamlined the process of delivering tyres…However, the Committee believes that the Department must administer these contracts in a manner that maintains the US industrial base for military tyre manufacturing and future innovation…The Committee also believes that having a single prime contractor who is also a tyre manufacturer managing the programme could result in a conflict of interest and place this contractor in an advantageous position with respect to competing for tyre contracts.”

US tyre manufacturer Goodyear appears very chuffed about the bill’s wording. “The language in this bill is important to Goodyear and specifically Danville’s military tyre business,” Goodyear plant manger Andrew Harper said in a statement. These sound like fighting words from a company that has, in recent years, surrendered much military segment ground to its French opponent.