Hayes Lemmerz sales and earnings in the first quarter 2000 were at the same level as last year. A significant drop in orders for heavy truck wheels and brake components was compensated by a successful expansion of aluminium wheel capacity worldwide.
Hayes Lemmerz International, the world’s largest wheel manufacturer, plans to invest 23 million US dollars with the objective of quadrupling the annual capacity of the Mexican aluminium wheel factory in Chihuahua to 1.2 million units by the year 2001.
New Internet linked initiatives and on-line transfer of all Pirelli company processes were announced today by the company’s board of directors. The e-Pirelli project to has been assigned an investment of 2 billion lire for the period 2000-2002.
At the beginning of the 90s Goodyear had great success – especially in USA – with its aquachannel tyre “Aquatred”. Now the tyre manufacturer launches in North America the dual-aquachannel tyre Aquatred 3 with greater dry traction performance and an 80,000-mile treadlife Warranty. The all-season tyre will be introduced initially in 18 popular T-rated sizes.
Bridgestone Corporation has acquired control of a Chinese manufacturer who produces radial passenger and commercial tyres from the Republic of Korea’s Kumho Industrial Co. The company has a current production capacity of about 3.5 million tyres a year.
In its last issue NEUE REIFENZEITUNG speculated about an agreement between Montupet and Michelin in the area of aluminium cast wheels. The talks seem to be “on hold” for the time being, because at the moment both partners have their hands “full with orders”. Montupet is currently doubling its capacity to 2.5 million cast wheels. Kronprinz, the Michelin subsidiary in Solingen, is able to cast 1.4 million wheels with the equipment already in place. In its search for a strategic alliance partner (without seeking a direct participation) Michelin has now found steel wheel manufacturer Meritor, which has factories in Mexico and Brazil. Meritor is a business division of Rockwell, the large supplier to the automotive industry, and is also known by the trade name Fumagalli. With an annual capacity of about 25 million steel and aluminium wheels Michelin is roughly double the size of Meritor. The strategic benefit for Michelin is not only the geographical location of the two Meritor factories, but above all the close relationship between the supplier Rockwell and Chrysler. The principal reason for the cooperation between M+M, however, was Renault’s decision to produce the Mégane also in South America with the same steel wheels as in Europe, where they are made by Michelin. To comply with local content requirements, the South American Mégane will have Meritor wheels.
The company anticipated a reduction in demand and took the decision to cut most of the production capacity of its Gadsden plant. Only a few months later Goodyear is forced to immidiately employ 500 – 550 workers to meet the demand for Goodyear tyres in the USA.
In an interview with the rather left-wing daily paper “Liberation” Edouard Michelin gave his comment on the so-called “Michelin Affair”. On 8th September the group reported a 20 p.c. rise in its half-yearly profits while at the same time declaring that it wanted to shed 7,500 employees in European factories within three years. The Michelin boss attributes the unusually fierce public reaction, by French politicians in particular, to insufficient public discussion. It has to be possible, he argued, to take the right entrepreneurial measures in time to achieve a rapid improvement in productivity, which is 15 to 20 p.c. below that of the group’s main competitors, Bridgestone and Goodyear. And the only way to do that, he claimed, is through accelerated growth on the basis of a new sales policy and through job cuts. Edouard Michelin reminded his critics that in the last twenty years the group had twice been faced with extinction, that it had needed to lose 25,000 employees in France and in spite of that had issued only 186 dismissal notices. Asked about the “Lex Michelin” (a change of law to accommodate the “Michelin case”, dealing with the application for state aid to facilitate social plans), Edouard Michelin pointed out that the group had indeed received a French state subsidy for its social plans in the past amounting to four or five billion francs, but that at the same time the French state had received 45 billion francs in social contributions, taxes and other levies. Today the group still makes 30 p.c. of total investments within France, he continued, and retains 30 p.c. of the production capacity in the country, although the domestic market takes only 15 p.c. of total sales. Though keen to dust off certain parts of the company, he said, he wants to preserve its culture, personality and customs. As the head of a “family business” he sees himself as “permanently accountable” and cannot afford not to make long-term plans, because he is only too well aware of having to defend his decisions also in five or ten years’ time. On the question of worldwide merger plans Edouard Michelin said that his company is in a position “to play an active part. Our gaze is directed towards Asia. Michelin has a talent for growth.”
Finnish tyre manufacturer Nokian has achieved a net turnover of 199 million Euros in the first nine months of this year; an increase of around 20 %. Operating profit is 18.4 million Euros (9 % lower than the previous year). Nokian is pursuing a strategy of expansion and, this year, will invest some 31 million Euros, with the aim of increasing production capacity by 50% within five years. At the moment, Nokian is trying to purchase ISKO, Finland’s largest tyre dealer with a turnover of approximately 65 million Euros. Analysts say that ISKO is financially very strong and very profitable.
Goodyear has told bank analysts that it will close a large factory in Italy that produces six million tyres a year. Goodyear produced about 55 million tyres in Europe this year and intends to reduce the production capacity from 72 million tyres (after the Dunlop take-over) to about 62 million by 2002. After Goodyear’s shares lost more than 40 per cent of their value, they announced plans to close more than one factory and increase production in the remaining European plants by introducing a seven day operation.
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