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.
Robert Bosch GmbH (Stuttgart) and Michelin (Clermont-Ferrand) have announced a long-term strategical partnership in the development and distribution of integrated driving dynamic management systems. The co-operation covers the fields of research and development as well as the introduction of product to the market. Both companies have identified working areas for the basis of common developments and synergies.
Under the new French employment laws Michelin are to hold a referendum of its 27,000 French employees on the establishment of a 35 hour working week. The proposals include a reduction of the working year by 15 days, a 5% pay increase for the coming year and inflation linked increases for the following two years, more flexible working patterns and includes the employment of another 1,000 workers. According to Michelin the offer is more generous than that dictated by the recently introduced regulations for a 35 hour working week. The referendum will take place on the 25th January and is part of French government proposals to reduce unemployment.
Each year the motorcycle exhibition in Dortmund attracts many visitors, even though Munich has established a bigger show (every other year) for two-wheel fans in the meantime. More than 400 exhibitors took part in the 17th show from 28 February to 4 March and around 1,000 motorbikes could be seen in Dortmund. And on the tyre side? Only Dunlop presented a new tyre: the tyre manufacturer says that the D208 GP (front tyre 120/70 ZR 17, rear tyre 180/55 ZR 17) was developed based on experiences in motorsport. But apart from this, no more information was available. Dunlop couldn’t even tell NEUE REIFENZEITUNG a date for the official launch of the new product in Germany. And at all other tyre manufacturers‘ stands – Bridgestone, Cooper-Avon, Metzeler/Pirelli, Michelin – one could only see exactly the same product range as presented at Intermot last autumn – very disappointing so far. The only excitement for this year’s motorbike season will arise from the question if Bridgestone will be able to pass Metzeler and can climb to number one of the German market for motorbike tyres.
Despite the difficult environment which is not likely to lead to improvements in the coming half year Deutsche Bank is recommending Michelin shares as a “Buy”. The analysts believe that the focus on high performance tyres will pay off and they believe also that, due to the anticipated sale of the Pirelli truck division, competition will be lower in the future for Michelin, which is very strong in that market.
For the first time, the Michelin Group is to release figures covering sales, profits and assets per division. The first report is expected on February 23rd.
Michelin’s German subsidiary has improved its results for 2000 in every aspect. Expectations have been more than fulfilled with an increase in turnover of 6.4 per cent to 1.75 billion Euro and a 70.2 per cent increase in profit to 57.8 million Euro. The Michelin Group as a whole has increased net earnings by 35 per cent to 438 million Euro (1999: 325 million Euro). The turnover of 15.4 billion Euro is around 11 per cent higher than the previous year’s figure of 13.88 billion Euro.
The latest study by J.D. Power & Associates, measuring OE tyre satisfaction, puts Dunlop at the head of light truck OE tyres for the first time and Michelin tops for passenger vehicles, for the fourth year running. The study sought the views of more than 39,000 consumers in their first three years of vehicle ownership.
Within days of RubberNetwork.com receiving the all clear from the German Federal Cartel Office (Bundeskartellamt), Yokohama Rubber Co has joined Continental, Michelin, Pirelli, Goodyear, Sumitomo and Cooper in the global electronic purchasing and procurement market. The RubberNetwork marketplace will be open to all tyre and rubber industry manufacturers and suppliers. The European launch of the market is scheduled for early July.
Finger pointing between Ford and Bridgestone/Firestone is continuing and has reached the point where the tyre manufacturer has terminated its business relationship with Ford after 100 years. In a written statement, BF-boss Lampe said “we believe that the auto maker is attempting to divert scrutiny of the vehicles by casting doubt on the quality of Firestone tyres. The tyres are safe and as we have said before, when we have a problem we will acknowledge that problem and fix it. We expect you (Ford) to do the same.” The assumption that Ford’s Explorer is a problem-car seems to be based also on the fact that Ford felt forced last week to recall more than 50,000 Ford-Explorers equipped with Michelin and Goodyear-tyres, avoiding the word recall but calling it a “Customer Satisfaction Program.” While the business with Ford accounts for only five per cent of BF’s total turnover, virtually everything depends on the success of the Explorer for Ford; the company’s best selling car for years and its cash cow.
Michelin North America has announced that it will cut 2,000 of its 26,500 workforce. The cuts will target the whole company, not just specific job classifications, and will be spread across not just the 23 plants but the whole company. Most will be achieved through normal losses and voluntary redundancies. Michelin wants to trim $75m in annual costs beyond the already announced $125m, and does not want to wait until the weak North American market begins to improve but rather to develop lean structures and create the ability to react to the market independently, whether the market improves or not.
Cheaper oil prices and the result of the Firestone recall in the US make Michelin shares a “buy”, according to analysts from the Deutsche Bank. Despite weakening demand in the US – the world’s biggest tyre market – Michelin is gaining market share and selling more tyres than ever. Market observers believe that it will be possible to obtain better prices for tyres in the region of 3 to 5 per cent.
Group Michelin has developed a new radial aircraft tyre. Designed to be more damage resistant than existing aircraft tyres, testing will take place on an Air France Concorde in the next few weeks.
Engineers at the University of Purdue (Indiana/USA) have developed a new technique for analysing tyre vibrations that identifies which features produce the most noise, a step toward designing quieter tyres and reducing highway noise. A mathematical model is used to identify which parts of a tyre produce the most noise. The vibrations are characterised on a graph, a visual representation that’s like a fingerprint of each tyre’s vibration pattern.
The prospects for manufacturers of heavy trucks in the USA are rather gloomy for this year, as experts are expecting a decline of up to 30 per cent. Despite this, analysts are not pessimistic about the prospects for Michelin, as the turnover from OE sales of truck tyres is only about 3 per cent of total group turnover. Better results than for 1999 are expected too for Goodyear, due to the downward trend in raw material prices and, last but not least, the recently-announced tyre price increases look like they will stick.
Nomura International, which holds a “substantial” equity stake in Romanian tyre manufacturer Tofan, has announced the sale of parts of the company to Michelin. The French company has bought the Victoria car tyre plant, the Silvania truck tyre factory, a retreading unit, a number of warehouses and the Tofan-owned distribution network. The purchase price was not revealed but a number of tyre manufacturers are said to have been interested. Tofan will continue to manufacture agricultural and implement (brand name: Danubiana) tyres and this business will be expanded, says Nomura, which remains a significant shareholder.
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