More Details on Michelin’s Efficiency Improvement Plans
Following a roadshow in the US hosted by financial analysts at Deutsche Bank, further details of the previously reported Michelin corporate restructuring programme have been released. The company is said to be aiming for a 30 per cent productivity increase by 2010 (10 per cent from production increase/ 20 per cent from workforce consolidation).
In addition Michelin is said to be looking to produce a better equilibrium of production/sales by continent. This is likely to have a significant effect on the European business as Europe represents 70 per cent of the group’s production compared with only 50 per cent of sales. Plant size is also likely to be rationalised, with the ideal size being described as 8 to 10 m passenger tyres and 2 million truck tyres per annum – basically double the current size of some plants.
Deutsche Bank reports that Michelin’s management still believes in a potential shortage of truck tyres in 2008.