There are persistent rumours that Michelin will be entering Formula 1 from the year 2001. BMW/Williams is the most likely partner. It is expected that Michelin will make an announcement in December this year. Other rumours say that Goodyear intends to return to Formula 1 Racing as well, but research carried out by NEUE REIFENZEITUNG confirmed them to be unfounded. Very recently the Americans even anounced to pull out of the IRL and CART Series in the USA.
Michelin has published its financial results for the first six months of 1999. Turnover is up 3.8% on the same period last year to 6,488 million Euros. Operating profit has improved too, from 511 million Euros to 611 million Euros, or 9.4% of net sales. These results are better than those of major competitors Bridgestone and Goodyear, with Michelin benefiting from falling raw material prices and an increase in inventory, allowing the group to absorb fixed costs more easily. Despite a favourable economic environment, Michelin has been unable to reduce net debt, which rose by 1,000 million Euros to 3,800 million Euros. It is assumed that the group requires significant financial investment to further develop the Pax system and to build new C3M factories. Michelin is expecting consumer prices to continue to fall in Europe over the next few years and it is vital for the company to reduce costs significantly in order to be competitive. As part of this process, Michelin has announced that it will reduce its European workforce by 10% over the next three years.
Popular Science magazine awarded Continental’s Side Wall Torsion Sensor (SWT) Best of What’s New in the technical category on 10th November. Conti thinks that this so-called intelligent tyre is a precondition for the use of Electronic Stability Programs (ESP) of the second generation.
Due to computer problems, the Goodyear blimp Spirit of Akron crashed in the United States. Fortunately, it descended very slowly, so that the crew suffered only minor injuries. Nobody on the ground was involved in the accident.
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 Goodyears 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.
Michelin wants to speed up the globalisation process and has its back to the wall. Once again cost reduction programmes and job cuts are necessary. In the struggle between the Big Three Michelin may have been dealt the worst hand. Bridgestone’s and Goodyear/Dunlop’s pressure on the home market of the French is growing. Bridgestone with its immensely strong financial power is considered capable of becoming the clear number one in the global tyre market.
Goodyear: Berckholtz Takes Over Original Equipment Germany
Günter Sommer (63), Manager Original Equipment Germany, will retire at the end of the year. Jan Berckholtz (55), Director in the European management for Sales and Marketing Original Equipment Consumer Tires Europe since 1992, will take over his responsibilities and move to Cologne.
The Kwik-Fit group plans to grow from its present 2,000 centres to a total of 5,000 centres by the year 2010. This is made possible due to the financial backing of car giant Ford, said Sir Tom Farmer recently in a key-note speech in England.
Bridgestone is optimistic that it will achieve its stated target of a 20% market share worldwide during next year. The group aims to be number one, or at least number two, in each market. As far as distribution is concerned, the focus is very much on the First Stop franchise system. In a background briefing, high-ranking Bridgestone managers revealed that the companys main goal is to become the dominant player in the world tyre market, regardless of the actions of main competitors Goodyear and Michelin. At present, Bridgestone operates 44 tyre factories in 22 countries around the world.
On 11th November, The Society of Motor Manufacturers and Traders (SMMT) announced a new tyre exhibition for the UK. The show (as yet unnamed) will run alongside the Automotive Trade Show at Birminghams NEC between 29th April and 2nd May, 2001. The SMMT says that it makes good business sense for tyres to be a part of an aftermarket exhibition.
From December to March, cars, light trucks, trailers and buses (up to 30 t) in Sweden must be fitted with M+S tyres. In the past, many motorists - particularly in the south of the country - drove on summer tyres all year round, especially on used cars or second family cars.