Michelin Plans Exit, Transfer of Russian Tire Plant
Michelin Group says it is "technically impossible to resume production" at its tire plant in Davydovo, Russia, and the tiremaker plans to leave the plant and transfer it to local Russian management by the end of 2022.
The company also is considering transferring control of all of its Russian operations, including administrative, sales and industrial, to the current local management. Michelin says doing so would create "the most favorable framework possible for its employees."
The new entity would operate through an independent structure from Michelin.
The tiremaker has about 1,000 employees in Russia, including 750 at the manufacturing plant, which is located about 62 miles from Moscow. The plant has the capacity to produce between 1.5 million and 2 million tires a year, mostly for passenger cars. Michelin suspended tire production there in March.
Michelin's sales in Russia account for 2% of its total sales, and 1% of its global car tire production.
Financially, Michelin's balance sheet exposure is estimated at around 250 million euros. "Completion of this project would lead to the removal of these activities from the scope of Group consolidation but would not impact the Group’s financial guidance."