Groupe Michelin's stock price has dropped almost 13% since mid-year -- and company executives may consider themselves lucky.
The slumping automotive industry in general and tire industry in particular continue to greatly affect tire company profitability. Michelin's North American subsidiary will cut 7% of its workforce by the end of 2003 in reaction to economic conditions.
"We need to position ourselves for the future and cannot wait for the markets to improve," says Jim Micali, chairman and president of Michelin North America Inc.
Overseas tire stock prices have been affected adversely as well. But while Michelin's adjusted stock price of $27.71 as of Sept. 12 is 12.9% lower than it was on June 29, other tire manufacturers are experiencing worse drops.
Taking into account the exchange rate for both the euro and the yen, the stock prices for Continental AG and Bridgestone Corp. are down 23.7% and 22.5%, respectively, since mid-year. But Pirelli SpA has suffered the most: The company's stock price has dropped from $2.78 to $1.43 -- a 48.5% decrease -- since June 29.
