Jim Micali, chairman and president of Michelin North America Inc. (MNA), says the company's 2002 results were heavily influenced by the cost-reduction plan it implemented in 2001. The plan is designed to reduce annual operating costs by $200 million by the end of 2003.
"I’m pleased with our progress in reducing operating costs in North America," he says. "Through this cost-reduction effort, we are continuing to improve our ability to weather the inevitable down cycles of the tire industry and build sustainable profitability."
Last year, the company's North American passenger and light truck tire sales dropped 2% from 2001 totals, according to Groupe Michelin's financial report, which was released Feb. 13.
Michelin cited "the strong progression of SUV tire sales generated in June 2001 by the recall by Ford of 13 million Firestone tires" as the main reason for the decline.
MNA eliminated 1,038 positions, mostly through normal attrition and voluntary severance programs, in 2002. The company has 24,640 employees in North America, compared to 27,000 people when cost-reduction initiatives began in 2001.
Globally, the company's consolidated net sales for 2002 totaled 15.6 billion euros, a 2.7% increase over the previous year's results.
MNA also says the price increases it implemented during 2002 are sticking, as "Michelin and BFGoodrich branded tires' average price is today much higher than at the start of the year 2000."
