During the recent Challenge Bibendum in Mortefontaine, France, Michel Rollier, Michelin's managing partner, left no doubt about who is now leading Groupe Michelin following Edouard Michelin's death. He was direct in answering this and a wide range of other questions during an hour-long press conference.
In response to a question about Michelin's management, Rollier, 62, said, "I am the sole managing partner of Michelin and a co-manager is not on the agenda."
He did add that the supervisory board and he might consider this action in the future, but given the company's constitution, this does not have to take place right now. "Michelin has one boss, and I am the boss."
Rollier said he intends to see Michelin "continue to move forward successfully in the path that Edouard set forth." In response to a question about strategy and changes for the company, Rollier said he had worked closely with Edouard Michelin and has a clear understanding of that plan, and "we must not redefine that strategy, but will roll-out the current strategy."
Rollier does not plan to have a "road show" to discuss the management of the company with the outside community, but believes he must now work inside Michelin to convey the strategy to its employees.
The company's strategy was stated by Edouard Michelin in May, Rollier said. It plans to increase its geographic spread by 10% and still achieve productivity and structural gains. "This should let us reach 10% profits and 10% return on our capital," he stated.
Achieving these gains will take a 1.3 billion euro investment per year through 2010, primarily in developing countries. Rollier said that maintaining profitability is a challenge since the tire industry has been under intense cost pressures with skyrocketing raw material costs. "Our world is one of high-priced commodities."
When asked about the possibility of former Managing Partner Rene Zingraff returning, Rollier said he views Zingraff as an excellent advisor, but has no plans to see him return in any other capacity. He mentioned Zingraff's soon-to-be-reached mandatory retirement age as a reason for this strategy.
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Rollier said the company continues to expand the use of silica in its tires to reduce rolling resistance. As for ultra-high performance tires, Rollier said they are not yet where they'd like to be, but believes you can reduce fuel consumption and still increase tread grip with silica usage.
Michelin does not plan to invest in rubber plantations to ensure adequate supply of this natural resource in the future. Rollier said the company "works closely with rubber producers to help them increase their productivity." In addition, Michelin has "no plans short-term" for investment in synthetic rubber plants.
Run-flat tires are still a small portion of the overall market, but Rollier said pressure from OEMs continues to drive this product segment forward. "Moving ahead, there will need to be more R&D for self-supporting tires and this will take new technology."
Rollier was asked about Michelin's policy of attracting consumers to its products. He responded by saying, "We have a long tradition of having customer intimacy. We've made progress in the past year." He also believes there will be an evolution of new distribution networks to sell Michelin's products and make sure the customer gets the right product at the right time.
Michelin's on target with wide-base tire concept: Selleck promotes truck tire innovations
Pete Selleck, one of 10 members of the Group Executive Council for Groupe Michelin and the president of Michelin's worldwide truck tire business since January 2006, sat down with Modern Tire Dealer during Challenge Bibendum and discussed several areas involving the company's truck tire operations.
Selleck is a 24-year Michelin veteran, having worked in the U.S. until 2003. He has been working at the company's Clermont-Ferrand, France, headquarters since then. He is one of two U.S. executives sitting on the Group Executive Council.
He says the company is "on-target" with its projections for the X1 wide-base tire. The truck tire is being shipped to both the original equipment and replacement markets at a 1:1 ratio. Selleck says the fill rate has been good for the tire line thanks to two Spartanburg, S.C., plant expansions plus increases at its plant in New Glasgow, Nova Scotia.
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In keeping with Michelin's corporate strategy, the X1 line reduces raw material usage and energy costs because only 10 tires are needed per over-the-road truck instead of the more traditional 18 tires, says Selleck.
The company is planning to look closely at tire repair technology this month. Selleck will be meeting with Michelin officials in North America and they will determine "if there needs to be an upgrade in tire repair." He pointed out that Michelin "got back into retreading because we felt it wasn't up to standards," and feels there will be changes in policy coming in North America.
When asked about on-tractor tire inflation systems, Selleck said he believes "the rotating joints leak more than they help." He also believes that air loss in truck tires "doesn't have the same dynamic" as it does in passenger tires due to thicker inner liners. For this reason, Selleck does not see nitrogen replacing air in truck tires.
As to company innovations, Selleck pointed to the Michelin Retread Technologies Inc. (MRTI) self-regenerating tread, the Michelin XDA Hypersipe. It uses MRTI tread design and siping technology to mold tread features on both the top and bottom of a precure tread band, which Selleck says is a unique feature that is possible with a precure retread and can extend the life of the retread.
In the spirit of Challenge Bibendum, Selleck went out of his way to reiterate that the entire industry must "get everyone to understand that tires must be properly inflated."
Taking the Challenge Bibendum: Groupe Michelin works to ensure freedom of mobility
Since its creation in 1998, Challenge Bibendum has been Groupe Michelin's highly visible "green" showcase used to shed light on the challenges of sustainable mobility. That is, vehicle mobility that is cleaner, safer and more fuel efficient, with the capability of making continuous progress even in a post-oil world.
If you wonder how that affects you, just view the whole subject in a different context. If cars and trucks cannot safely navigate the world's roadways quickly and cost efficiently in the future, there won't be a market for tires (and for the dealers who sell them).
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The aim of Challenge Bibendum is to provide decision-makers and leaders of opinion -- in the political and industrial arenas and the media -- with impartial information on the latest technological advances in the field of environment-friendly vehicles, according to Michelin.
"We believe that there is no single solution, moreover a range of various solutions that should be developed within the framework of strong synergies between researchers, industrialists, users and legislators," Michelin Managing Partner Michel Rollier told attendees.
Challenge Bibendum 2006 was held recently at the CERAM, an automotive test track and research facility in Mortefontaine, just north of Paris, France. The goal of this year's event was to demonstrate the wide range of technological solutions that will enable a predicted 1.5 billion cars on the road in 2030 (twice as many as today) to continue supporting economic development and freedom of movement, without creating unacceptable impacts for society at large or energy supply problems, according to Michelin.
This year's event attracted more than 200 suppliers, including all major car makers, equipment suppliers, energy suppliers and their technology suppliers, government officials and university representatives. There also were more than 500 journalists from over 40 countries in attendance.
In addition to a conference, there were more than 150 vehicles showcased and put through the Challenge Bibendum competition. The vehicles fell into five different design categories -- prototypes, concept cars, utility vehicle prototypes, urban bus prototypes and urban vehicle prototypes. The propulsion of the vehicles included internal combustion engines, electric motors or hybrids using known fuels, electricity, hydrogen and solar.
In prepared remarks at the start of the event, Rollier said, "Since 1998, Challenge Bibendum has focused on providing private and public sector opinion leaders and decision-makers with objective information about the latest technological developments in automobiles and traffic management infrastructure.
"The goal is to work together to support the emergence of programs and policies most likely to address sustainable mobility issues, such as energy efficiency, road safety and the protection of our living and natural environments," said Rollier.
The opening of the event was quite poignant, with Rollier dedicating this year's Challenge Bibendum to Edouard Michelin, co-managing partner with Rollier who had died recently in a boating accident at the age of 42.
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"When I speak about the spirit of Challenge Bibendum, it is with emotion, since it was Edouard Michelin who in previous years instilled the event with his warm, friendly enthusiasm. He was an ardent believer in the development of road mobility as a driver of progress and personal fulfillment. He firmly believed in a type of road mobility that is capable of anticipating ever-increasing environmental and energy constraints. This is the major challenge that we face today.
"As we remember his enthusiasm for this enormous undertaking, we are all deeply grieved by his sudden passing. I would therefore like to propose that this 2006 Challenge be dedicated to his memory."
As for the continuation of Challenge Bibendum, Rollier said he intends to see it continue, with the next event perhaps taking place in the U.S. or Asia. He not only approves of continuing the event, but also wants to see it stay more than just a trade event. He was very encouraged that leading officials from the EU were present and said that he believes "unequivocally that they and their colleagues are very familiar with the event" and derive much information from it.
When a member of the international press questioned the lack of U.S. participation in the Challenge, Rollier was forceful in saying that "the U.S. has shown great support." He pointed to the participation by U.S. car manufacturers and by the European subsidiaries of U.S. suppliers as strong evidence of this support.
'Community' involvement
Thierry Coudurier has been with Groupe Michelin since 1979 holding a variety of positions, including a stint in the U.S. as vice president of truck tire sales. He currently is a member of the Group Executive Council and the president of the Worldwide Strategic Business Unit, Passenger Car and Light Truck Tire Sales.
Coudurier is a passionate believer in Challenge Bibendum. He told a group of American journalists that "if we want transportation for the future, it must be sustainable." This means reducing the use of natural resources and providing safe transportation through a reduction in accidents.
"It's the whole community who must take charge. The future of Michelin depends on having sustainability." Coudurier pointed out that Michelin does not promote its tire brand during Challenge Bibendum.
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"We do, however, want to make people aware of the 20% fuel consumption that tires have for cars," he said, "and we have reduced rolling resistance by 50% in the past 10 years and we must do the same in the next 10 years."
Coudurier says "green" tires make up roughly 75% of its Michelin brand sales in Europe. The number is lower in North America. In fact, Coudurier says that the company promotes fuel economy only through its Michelin brand in the U.S., not its BFGoodrich and Uniroyal brands. He says the company does not put that technology in those brands.
Coudurier is aware that profitability for Michelin in North America is balanced among all the different tire lines and types. "The trend in North America has been bigger, but we've seen a plateau with OEM's fitting 18- and 19- inch sizes." He believes that with the price of oil, increasing weight and the size of vehicles, conserving natural resources is a balancing act.
"People are talking about hybrids and diesels to let them keep the size but have less consumption." He believes it is important to build tires locally, realizing that companies must weigh transportation costs versus manufacturing costs and balancing them to make the decision.
"Eighty-five percent of our tires sold in North America are made in North America," said Coudurier. He feels that there will continue to be a strain on raw materials and pointed to the current emergence of China as a strong reason that raw material costs, including oil, will continue to remain high. He further pointed out that India has 1.2 billion people and "is 10 years behind China but will be bigger than China is now" in terms of production of products.
Looking forward, Coudurier would "like to see the breakthrough of the radial tire every five years."
Coudurier knows that the Michelin brand is a premium-priced tire. "Our aim is for the consumer to understand the total cost of ownership -- how much is the value of the tire. The premium amount for our tire is for handling, durability and fuel economy."
