Impossible to resume production – Michelin transferring Russian operations

After suspending its manufacturing activities in Russia on 15 March, Michelin now confirms that it is “technically impossible to resume production,” due in particular to supply issues, amid a context of general uncertainty. It says Michelin Group is “therefore compelled” to plan the transfer of all of its Russian operations by the end of 2022.

The company is also considering the possibility of transferring control of its administrative, sales and industrial operations to the current local management. By doing so, Michelin believes it is “preparing the most favourable framework possible” for its employees. This new entity would operate through an independent structure from Michelin.

About Michelin in Russia

Michelin Russia employs approximately 1,000 people, including 750 at the Davydovo plant, located about 60 miles from Moscow. The site has an annual production capacity of 1.5 to 2 million tyres, mainly for passenger cars. Michelin’s sales in the country represent two per cent of the Group’s total sales and one per cent of its global car tyre production.

In financial terms, the Group’s balance sheet exposure to the project’s perimeter is currently estimated at around 250 million euros. Completion of this project would lead to the removal of these activities from the scope of Group consolidation but would not impact the Group’s financial Guidance.