Rollier will keep Michelin's goals

Bruce Davis, ERJ Akron bureau

PARIS - Michelin's No. 1 task following the May 26 death of co-CEO Edouard Michelin is to execute the strategy the company's top echelon worked out under his direction, new CEO Michel Rollier said.

"The strategy is in place," Rollier said. "Our task is to roll out this strategy."

Earlier this year, Edouard Michelin laid out several performance goals, including achieving an operating margin of 10 percent or more by 2010 through a combination of internal cost-control efforts and focused growth. Michelin's operating margin was 8.8 percent last year.

The 10 percent goal has come under pressure from higher than anticipated raw materials costs, a situation that has caused some stock analysts to revise downward their projections for the company.

Rollier acknowledged the pressure Michelin is facing from rising raw materials costs, especially the "surprising" surge of natural rubber prices.

But he views the challenge as an opportunity for innovative companies such as Michelin to tackle the dilemma internally through cost-control measures and research and development.

'Expensive commodities'

"Our world is ruled by expensive commodities," said Rollier in his first public appearances as the sole CEO of Michelin.

Previously Rollier shared the job with Edouard Michelin. Rollier was speaking at the 2006 Challenge Bibendum event held near Paris last month.

Natural rubber accounts for about 25 percent of the firm's commodities costs, which is why Michelin's r&d team constantly is working on ways to improve the company's ability to substitute synthetic rubber for natural rubber where possible, Rollier said.

Rollier and Didier Miraton, Michelin's top ranking r&d executive, also stressed a vision championed by Edouard Michelin to produce a tire that delivers twice the life while using half the natural resources.

Rollier also assured the public that he's in charge, saying: "There is only one CEO at Michelin. I am that man."

Whether the firm's executive board might decide at a later date to name a co-chief executive - as had been the case before Edouard Michelin's death - is a matter for the directors on the board to take up, Rollier said.

Rollier, 62, has been with Michelin since 1996. He became a general partner of the company in May 2005 alongside Edouard Michelin and Rene Zingraff, who retired at the firm's most recent annual meeting May 12.

From Automotive News Europe (A Crain publication)