Have other tire makers caught up with Michelin in terms of quality?
Jean-Michel Guillon, executive vice president of Michelin North America Inc. and COO of Michelin Americas Small Tires (MAST) has heard talk of this.
``Some companies are claiming and advertising that they are closing the quality gap in the passenger segment,'' Mr. Guillon said in a speech to dealers at the Feb. 19 MAST Strategic Alliance meeting in Naples. ``And in fact we are glad to see that they are recognizing the importance of quality products.''
This emphasis on quality, he said, reinforces Michelin's marketing message that tires are not a commodity.
``Meanwhile, we at Michelin are continuing to deliver top quality products, not in one year but year after year, brand by brand in all segments of the market,'' Mr. Guillon told dealers.
Asked to elaborate, he said he brought up the issue of competitors' quality improvements in his speech ``because I think about it.''
``Everybody can say I will develop a line, I will put my best technology on one specific line on one specific segment,'' he said. ``The key point is to be consistent in all brands, in all the types of segments year after year.
``I like the competition,'' he continued. ``I like the fact that some of our competitors are pushing more and more technology, which we need in the tire industry.''
Interviewed following his speech, Mr. Guillon commented on several other industry topics.
Asked whether Michelin would follow the trend of sourcing more tires from overseas factories to reduce costs, Mr. Guillon said only those Michelin plants capable of producing high end and more complex tires in North America would survive and thrive.
Michelin's automated, short-run C3M plants are good examples of the type of facilities that will play a key role, he said.
But the tire maker also operates conventional tire plants in North America as well, including its own Michelin factories and those acquired in the purchase of the former Uniroyal Goodrich Tire Co. in 1990.
The Michelin plants are competitive by the products they are selling, Mr. Gullion said. As for the Uniroyal Goodrich plants, he said Michelin is investing in them to make them more competitive. But even more important than capital infusions is the mindset of the work force, he said.
These plants are used to making mass-market tires and face the challenge of producing more complex products such as those for sport-utility and other high-end vehicles, he explained. ``We are putting a lot of effort not only in terms of investment but in the culture of the people in these plants to help them to produce more complex tires in these new segments.''
Mr. Guillon cited progress made at the Uniroyal Goodrich plant in Ardmore, Okla., as an indication that needed change can occur. Ten years ago, 75 percent of the tires built there were single-belt Uniroyals made for General Motors Corp. Today, the plant produces SUV and high-end tires for the replacement and original equipment markets.
``The progress we've made in our plant in Ardmore...clearly is what needs to be accomplished in these plants,'' Mr. Guillon said. ``And we're not talking about producing Michelin tires in every plant like Ardmore is doing.''
Asked about the impact of China on the North American tire industry, Mr. Guillon said: ``Some people are dreaming about China. But tires are different than other types of products. You can have low production costs in China, but you still, particularly in the SUV (tire) market, have high logistic costs.''
In looking at China, ``you have to take into account the entire package. It's one reason why you will not see only Asian plants overwhelmingly killing the North American plants,'' he said.