Tyre industry pioneers, Michelin has a long history. Having begun in 1889, Michelin is now the second-largest tyre manufacturer in the world after Bridgestone and larger than both Goodyear and Contineantal.
Michelin has confirmed that it will be injecting a multi-million pound investment package into its UK service chain ATS Euromaster this year, so that it can continue to develop its added value customer focus started in 2004. According to the company this 10-year programme is part of a wider investment schedule that will be introduced and rolled out throughout the coming years.
Michelin will not buy the whole Trenco Egyptian conglomerate, as some new sources had reported. According to an article in French newspaper, Les Echos, Michelin was likely to buy the conglomerate for $10 million, despite its daily losses of $40,000 and debts of $200 million. Deutsche Bank analysts contacted Michelin and report that the company denied being interested in the whole conglomerate, but only in the Nisr tyre brand. Nisr is much smaller in comparison, producing only 30,000 tyres each year. Egypt is the 5th largest North African market with an annual volume of 3 million passenger tyres and 700,000 truck tyres. This is an attractive market for Michelin which aims to expand its production capacity in this region, the analysts believe.
The Transport & General Workers Union (T&G) has agreed hold off on planned industrial action for seven days. Union members at Michelin’s Stoke-on-Trent plant had agreed to work to rule, but the decision was suspended following a “positive” meeting with management. If no agreement on the pay offer can be reached, the industrial action will go ahead on 11 March, the Birmingham Post reported. A planned demonstration will also be postponed, the newspaper added.
Continental AG has retreated from its memorandum of understanding with China’s Qingdao Doublestar, Bloomberg has reported. A Continental spokesperson told Tyres & Accessories that the decision was made recently when the company realised it would not be able to gain a majority share in the Chinese joint venture. Because the decision was taken at this early stage, no money has been lost, the representative said.
TIA has named the participants in the first Commercial Tire Executive Summit, which will be held April 20 during the forthcoming World Tire Expo at the Kentucky International Convention Center in Lousiville. Tire Review has reported that the summit, entitled “The Commercial Truck Tire Industry: Here and Now,” will include “an energetic discussion of current issues and how they are impacting the commercial tyre industry right now,” according to TIA.
Michelin managing partners Edouard Michelin and René Zingraff will propose that Mr Michel Rollier takes up the position of managing partner, according to a company statement. The existing managing partners will formally make the proposal when the company has its annual general meeting on 20 May.
Workers at Michelin’s Stoke-on-Trent Remix plant have voted to take industrial action after a dispute over pay conditions. Members of the Transport and General Workers Union (T&G) at the factory supported strike action by almost three to one and industrial action short of strikes by just over four to one. 81 per cent of the T&G members took part in the vote.
Serbian tyre company, Tigar, has signed a contract for long-term co-operation with Michelin and the World Bank Belgrade, reports Tanjug News Agency.
Under the contract, Michelin aims to take over 50.6 per cent of Tigar by 2007. By 2010, the plan is for small shareholders to hold only 30 per cent of company shares whilst Michelin will own 70 per cent.
Around 400 workers at Michelin’s Stoke-on-Trent Remix plant will start industrial action at the end of next week, the Financial Times has reported. The work force is to ban overtime, work to rule and withdraw co-operation. The new follows workers’ decision to reject a non-consolidated pay rise of £650, or around three per cent.
Kwik-Fit could be worth up to £1 billion if it were auctioned in the coming months, according to media reports. CVC Capital, which acquired the business from Ford in 2002, is thought to be ready to appoint financial advisers. The Financial Times reports that Citigroup, Deutsche Bank, Goldman Sachs, Merrill Lynch and Morgan Stanley are all vying for the mandate.
Goodyear will be the official press sponsor of the 75th Geneva International Auto Show, when it runs from 3 to 13 March. The manufacturer will use the sponsorship opportunity to increase recognition of the new name for its fail-safe, RunOnFlat technology. Last year Michelin was responsible for sponsoring this area of the show. Goodyear joins the likes of Eurosport, Yahoo Cars, Peugeot and Mazda, in supporting the event.
Deutsche Bank analysts are expecting the price of Michelin shares to increase by over 20 per cent from their current value of 53 euros per share to 65 euros. The estimate follows Michelin’s recent financial activities such as its investment in Poland, its Q4 results and its announcement that it is disposing of its wheel business. These signals “show the management commitment to turnaround this business unit,” wrote Deutsche Bank.
“In our view this shows a great consistency with the management strategy and reinforces our confidence in the capability of Michelin to reach their mid-cycle target of 10 per cent as early as 2006,” it estimated. This translates into 6.5 euros EPS.
However a risk lies in further strong increases in raw material prices which Deutsche Bank fears will not be able to be passed on to the customer.
Michelin North America’s BFGoodrich Tire division is planning to sponsor the new Wal-Mart FLW Kingfish Tour and Wal-Mart FLW Redfish Series, Tire Review has reported.
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Michelin is extending the X One Total Satisfaction Guarantee into 2005, US magazine e-trucker has reported. The guarantee will be available to X One tyre customers in the US that purchase at least four replacement assemblies. According to the report, the guarantee will cover the first 10 sets of X One tyres purchased. As part of its guarantee, Michelin will buy back X One casings and will cover 75 per cent of the cost of the wheels if the owner isn’t pleased with the tyre’s performance at the end of its original tread life. Michelin recently added a new production line at its Spartanburg, South Carolina, factory partly to increase its capacity to produce X One tyres.
Michelin is set to sell its wheel business to the German Mefro group. According to Michelin, the new owners will keep both manufacturing plants and their 1800 strong workforce intact. Mefro, a family-owned company, has an annual turnover of approximately 160 million euros and aspirations to become the “number one European wheel manufacturer.” Now in light of the recent purchase, the company sees itself as a significant competitor to European steel wheel producers Gianetti and Hayes Lemmerz.
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