Michelin to reduce benefits of US workers

Paris -- Michelin is to reduce the medical insurance benefits it offers to US workers and book a Euro 254 million gain as a result.

A change in legislation - specifically, the introduction of Part D prescription drug coverage in the US government Medicare programme - has allowed the company to change its system for paying for drugs and prescriptions to retired former employees.

In a statement, Michelin said, "The modifications Michelin North America has made to its prescription drug plans will be effective Jan. 1, 2006, and already have been fully communicated to Michelin's affected US retirees. These changes will result in a $476 million (€ 380.6 million) reduction in the Group's projected benefit obligation (PBO) and in Michelin realizing in its consolidated accounts a gain before taxes of $ 317 million (€ 253.5 million*) in its 2005 results. In addition, Michelin North America will realize in 2006 annual savings in benefits-related costs in the United States of an estimated $ 37 million (€ 30 million*)."

This is an external link and should open in a new window. ERJ is not responsible for the content of external sites.

Press release from Michelin

Michelin cuts US employee pension benefits, books 254 mln eur exceptional gain Forbes (France)