Michelin targets $1.4 billion in cost savings by 2016

ERJ staff report (TB)

Paris --  Group Michelin hopes to trim as much as $1.4 billion out of its operating costs in the coming five years through internal austerity and efficiency measures, according to Managing Partner Jean-Dominique Senard, speaking to the financial community today.

That amount of cost trimming represents a cut of about 5 to 6 percent of costs, according to figures presented.

Mr. Senard said Michelin is looking to trim $275 million to $415 million from selling, general and administrative costs, $275 million from raw materials costs and $700 million to $835 million from efficiencies in manufacturing and transportation/logistics.

These three areas represented more than $26 billion in costs last year.

Mr. Senard Michelin expects to achieve these savings through “drastically improving efficiencies” in its various operating areas. He said the program started several months ago.

From Tire Business Rubber & Plastics News Automotive News (A Crain publication)