Michelin boss details targets, technology ambitions

Montreal, Quebec – Constant advancement in technology, customer service and community support are keys to the future of Group Michelin, according to Pete Selleck, chairman and president of Michelin North America Inc.

"Michelin has been around for more than 125 years, and it's easy to think of us as just a tire company," Selleck said in a 15 June interview at Movin'On 2017, Michelin's wide-ranging conference on sustainable mobility. "But Michelin has been and will continue to be an important company in the sense of helping society."

At the outset of Movin'On, Michelin announced three ambitious goals for 2020:

To increase revenue from its tire operations by 20%;

To double revenue from its service activities; and

To triple its revenue from its activities related to mobility experiences, such as gourmet dining and tourism.

Also, Michelin will reaffirm its leadership vigorously in the high-technology materials segment, the company said.

Movin'On — which Selleck called "an incredible event and venue" — is designed not only to help achieve all these goals, but also to let Michelin's customers and dealers know what to expect from the company, he said.

"The things you see at this event, at least some of them will be in the market 10 years from now," Selleck said. "If consumers and dealers don't see those trends, the future is going to be difficult.

"You have to look constantly at ways to improve," he said. "At Michelin, it starts with looking at our customers and dealers."

Consumer friendly

One of Michelin's biggest goals is to become even more customer-centric, according to Mr. Selleck.

"Our B2B is not as good as we need it to be," he said. "We must understand the challenges that fleet owners, mining companies and airlines have. We must understand their larger problems so we can serve them better."

Becoming simpler, and yet more digital, is also at the centre of what Michelin is trying to do, according to Selleck.

"What are the things we can do to make small fleets more successful?" he said.

The development and well-being of the people who work at Michelin are core principles at Michelin, as is giving back to the communities in which Michelin operates, according to Selleck.

"In our communities, we play a key role, not just as job providers," he said.

The Michelin Challenge Education program, in which Michelin employees act as tutors and mentors in elementary schools in disadvantaged neighbourhoods, is a case in point, according to Selleck.

"Under the Challenge Education program, many kids have progressed two grade levels in a single year," he said. "If a child can't read by eight or nine, he or she will have a very difficult time in society."

Michelin has other ways of engaging the community, according to Selleck. Every year, usually in South Carolina or Nova Scotia, Michelin holds a stakeholders' forum to which suppliers, customers, dealers, educators, NGOs, journalists and government officials are invited, he said.

At those fora, Michelin not only exposes stakeholders to the company but also holds discussions on pertinent issues, such as workforce development, economic development, education and infrastructure, Selleck said.

"This is who we are, they see, and it's very impressive for them to see it," he said. "There is a need for Michelin to stand up in our states or provinces and take a stand on issues important to that area."

Tire safety

On federal issues, however, Michelin is waiting to see what happens with tire safety rulemaking that is marking time because of the current administration's express desire to reduce all government regulation.

In 2015, Michelin joined the US Tire Manufacturers Association (USTMA) — then known as the Rubber Manufacturers Association — in calling for a return to mandatory tire registration and to minimum performance standards for rolling resistance and wet traction.

That call ended up becoming part of the Fixing America's Surface Transportation (FAST) Act, which President Obama signed into law in December 2015.

According to Selleck, Michelin and the USTMA saw the minimum performance standards as a corrective to the tire fuel-efficiency rating final rule issued in March 2010 without provisions for labeling or consumer information.

"Tire fuel-efficiency grading was introduced in Europe in 2012," he said. "The problem with tire grading is that it is unenforceable. A manufacturer issues a grade similar to Uniform Tire Quality Grading, but there is no mechanism for the government to enforce the grade."

The idea of minimum standards, according to Mr. Selleck, is that the government can stop the sale of tires that do not meet them. However, it is unclear when the National Highway Traffic Safety Administration (NHTSA) might act on those standards.

"It's hard to find out what's happening when there is no NHTSA administrator," he said.

Meanwhile, it was a surprise earlier this year when the International Trade Commission did not levy duties against Chinese truck and bus tire imports, according to Selleck.

"There is some evidence that tires are being sold here at less than fair cost," he said. This is particularly hard for retreaders, such as Michelin Retread Technologies dealers, he said.

"We think retreading is important," he said. "It's an economical way to extend the life of a carcass, along with many environmental benefits."

Dealers also are important to Michelin and will play a major role in helping the tire maker meet its revenue goals, according to Selleck.

"We work with dealers who want to work with us," he said. He admitted he did not know how online tire sales might progress, but he noted they make up a very small part of Michelin's sales.

"We are responding to consumers who say they don't understand why they can't go to our website and buy tires," he said. "Some consumers still prefer to research online and talk to dealers to make their purchasing decisions."