Michelin executives predict bright future

Swamp Fox

Michelin executives predict bright future
By DAVE L'HEUREUX
Staff Writer
The State
Edouard Michelin, the new 35-year-old chief executive of the French tire
company, visited Michelin North America headquarters in Greenville on Friday.
He met with Jim Micali, president of North American operations. Both men shared
their thoughts with local and foreign business journalists.
Michelin North America employs 26,500, including 10,000 in South Carolina. Its
Lexington plants employ about 1,500 people.
The North American operations posted $5.5 billion in sales last year. It
maintained a 21.6 percent market share in original equipment tires in 2000.
Michelin makes the Michelin, BF Goodrich and Uniroyal brand tires, as well as
several private label tires.
Below are the two men's comments on several key issues:
Question: What vision do you have for your worldwide tire company?
E. Michelin: We intend to improve our efficiency and productivity over the next
two years. We intend to improve our operating margin.
This is not a quick fix, but a fundamental effort to ensure that we are
competitive in the future."
Question: What about future market presence?
E. Michelin: The increase in SUVs (sport utility vehicles) and 4x4 (vehicles)
has increased the focus on high-performance tires. We truly believe this is the
right place for Michelin.
Last year, we raised our prices and still we grew our market share. Customers
are looking for brands that they trust.
Question: What about Michelin's presence in North America?
E. Michelin: We are continuing every year to invest more than $100 million in
North America. I am very confident in the future of our operations in North
America.
Question: Is Michelin North America continuing to cut jobs?
J. Micali: Last September, we announced a plan to eliminate 2,000 positions by
December 2003. We eliminated 500 last year. So far, we're on track.
Question: Tire sales for cars and light trucks are up, but what about heavy
trucks?
J. Micali: We saw a 5.2 percent loss in (truck tire) sales last year. We
estimate a 2.2 percent drop-off this year, and, finally, a 4.3 percent increase
in 2003.
Question: The federal government is requiring a dashboard warning for
underinflated tires included in vehicles built after November 2003. What do you
think about the rule?
E. Michelin: I support it very much. Tires are one of the most important safety
parts of the car.
There has been a big wake-up about tire safety in the United States. And
therefore, I think it's time to move to a precise device to take care of
(monitoring) tire pressure.
Question: How did Michelin North America benefit, if at all, from
Bridgestone-Firestone's massive tire recall in 2002-01?
J. Micali: We sold an extra three million units as a result of the Firestone
recall.

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