(AOF) – The French tire manufacturer Michelin plans to cut 451 jobs in 2023 in France, for the third year of its “simplification and competitiveness plan”, announces AFP from a union source, specifying that these job cuts positions mainly concern the group’s head office in Clermont-Ferrand. 313 mainly tertiary positions will be eliminated at headquarters, while for the industrial part, the sites of Cholet (51 deletions), Troyes (30) and Puy-en-Velay (25) are the most affected. At the same time, the group is considering 318 job creations.
The results of the planned three-year plan would amount to around 1,750 job cuts (1,100 in the tertiary sector and 650 in industry), according to a spokeswoman for the group, who had initially put forward the figure of 2,300 job cuts ( 1100 in the tertiary sector and 1200 in industry). “It was a maximum, not a goal,” said the spokesperson.
Michelin currently has 17,000 employees in France and more than 120,000 worldwide.
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Key points
– World leader in tires with 1/5th of the market, born in 1889;
– Group organized into three divisions generating €23.8 billion in sales: automotive (50%), road transport (26%) and specialty activities, originating from Europe for 38% and North America for 35% ;
– 3/4 of activity in the replacement tire market, less cyclical than original equipment and less sensitive to the health of car manufacturers;
– Business model based on 3 pillars: in the tire, around the tire with connectivity and beyond the tire (flexible, biosourced composites, 3D printing and hydrogen mobility);
– Partnership limited by shares controlled by the founding family (4% of the capital and 5.17% of the voting rights), Barbara Dalibard chairing the 11-member supervisory board and Florent Menegaux chairing the management;
– Very healthy balance sheet, rated A – debt ratio of 19% and free cash flow of €1.4 billion at the end of 2021. 4.86
Challenges
– 2030 strategy: annual increase of 5% in sales and return on invested capital of more than 10.5% from 2023, decline towards 70% of tires in revenues, the rest coming from applications, hydrogen mobility systems and connected, metal 3DS printing…;
– Innovation strategy led by the president:
– responding to 3 challenges – additive manufacturing, flexible composites and hydrogen mobility, – based on 5 pillars: R&D (€700 million per year in 9 centres), external partnerships, in research (300) or strategic (Enviro, Vabios, addUp, Pyrowave), co-design with customers, internal innovation (100,000 ideas per year of progress and innovation coming from employees) and the incubation program,
– exploiting and monetizing the customer database;
– “Planet” environmental strategy: aiming for total carbon neutrality by 2050 and supported by the Movin’On global ecosystem
– intermediate objective: in 2030: 50% vs. 2010,
– an offer of tires that protect the environment by using recycled materials (2030 target of 46% and 100% in 2050) and sustainable materials (29% of tires in 2021), support for electric mobility and hydrogen mobility via Symbio, a joint venture with Faurecia,
– “4 R” circular economy (Reduce, Reuse, Renew, Recycle), boosted by breakthrough technologies in partnership (Carbios, Enviro, Pyrowave, etc.);
– Execution of the production redeployment plan (closure of 3 factories in developed countries and rise of the Indonesian and Mexican sites) and of the SIMPLY efficiency plan over 3 years, with maintenance of the €2.2 billion investment plan in 2022;
– Strengthening of the world’s No. 1 position in tires for electric vehicles.
Challenges
– Exit from Russia, health restrictions in China and disorganization of supply chains: 2.4% decline in sales volumes, offset by the systematic impact of inflation on sales prices and by indexation clauses;
– Inflation in energy, maritime transport and raw materials (rubber, carbon blacks and oil derivatives, ie 1/3 of purchases): negative impact on self-financing;
– Contrasting markets: 2023 growth of between – 2% and + 2% in passenger cars and light trucks, between + 2% and 6% in trucks excluding China and between + 3% and 7% for specialty activities;
– After a 20.5% growth in sales at the end of September, adjustment of the 2022 objective of operating profit confirmed at €3.2 billion and free cash flow down to €700 million.
Negotiations with builders
On average, equipment manufacturers represent between 60 and 85% of the manufacturing cost of a vehicle. According to the Federation of Vehicle Equipment Industries (Fiev), negotiations are very tense with manufacturers regarding the passing on of increased costs. The price increases concern both electronic components, raw materials, such as steel, nickel, lithium or palladium, energy and transport. Equipment manufacturers mainly negotiate with Stellantis and Renault to set up indices to pass on increases. They are also betting on innovation, differentiation, upgrading and internationalization.