CLERMONT-FERRAND, France (May 29, 2002) – Group Michelin will not renew its original equipment supply contract with General Motors Europe this year, citing incompatibility with GM's purchasing policies, but the tire maker said it is leaving the door open for renewed business in the future. The contract expires on July 31.
Neither Michelin nor GM divulged the size of Michelin's business with the car maker; in 2001, GM sold about 1.7 million cars in Europe, creating a need for about 8.5 million tires at five tires per vehicle.
Michelin said its decision reflects its 2002 objectives, which stated the company would not renew contracts that could have detrimental effects on the group's earnings. The decision will not impact the firm's forecasted 2002 results, the company said. The applicable industrial capacities will be redeployed to serve other market needs.
Regarding future relations, Herve Coyco, head of Michelin's worldwide passenger car/light truck division, said: “We remain confident that our two companies will know, in due time, how to generate a renewed cooperation.”
In Europe, GM's brands include Opel, Vauxhall and Saab. Michelin's contracts with GM in other areas are unaffected; in North America Michelin has an estimated 22 percent share of GM's passenger car and light truck business.