Rollier aims to improve productivity at Michelin - report

Paris - Michel Rollier, president of Michelin told a French newspaper that he intends to improve productivity at the company to match that of competing tyre makers.

Quoted (in the French language) in Le Figaro, Rollier said the operational margin of 8.3 percent recorded in 2006 was insufficient. While the company watches costs everywhere, he said the company needs especially to cut costs in West Europe and in North America.

Although the volume of production fell from 2004 - 2005 and increased only slightly in 2006, Rollier said Michelin's raw materials costs had increased by about 2000 million in the same three years.

He added that the company aims to reduce costs by between €1500 million and €1700 million by 2010. Much of this, he said would come from early retirements, as the age profile of Michelin employees in North America and Europe will work in the company's favour. Rollier said around 20 000 employees are due to retire by 2010, of whom only one in two will be replaced.

He said the company will see better productivity through more automation and better technology. He said there is a significant cost advantage to factories in Asia, but he hoped to retain a strong manuufacturing base in the west, with highly productive factories can continue to make tyres at economic rates

Rollier also noted that the two recently appointed Gérants, were not "active associates" ("associés commandités") and were appointed only for a limited term of five years, which could be revoked, unlike Rollier himself. Rollier said this is a big and significant change for Michelin and a break with tradition, but nevertheless, a necessary change in status.

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Le Figaro interview (French Language)

Le Figaro interview (sidebar on China) (French Language)