Michelin committed to North American manufacturing
Michelin North America Inc. (MNA) may be in the middle of a two-month production curtailment at its three BFGoodrich plants, but "we have not changed our focus on manufacturing in North America," says MNA Chairman and President Dick Wilkerson.
MNA implemented an eight-week production curtailment at the BFG plants on Nov. 1 in response to reduced consumer tire demand. (In total, MNA has 10 plants in the United States, three in Canada and one in Mexico.)
"If the market is down, we have to take our manufacturing schedules down to meet market demand," says Wilkerson.
Manufacturing in North America presents several advantages, he explains, including substantial cost savings.
"Working capital goes up significantly when you go offshore because of increased inventory. You're not able to respond quickly to the market. Plus, when you manufacture in the zone where you sell, you partially hedge currency fluctuations."
MNA is investing $100 million in North American plant upgrades, according to Wilkerson, which he says demonstrates the firm's commitment to domestic production.
For more about MNA's production strategy, the company's take on what to expect in 2009 and other topics, see the December 2008 issue of Modern Tire Dealer magazine, available soon.