CLERMONT-FERRAND, France — Group Michelin has become the second tire maker to announce it would end tire production in Russia as a result of the war in Ukraine.
The French-based tire maker said it is "technically impossible to resume production, due in particular to supply issues, amid a context of general uncertainty," and thus will transfer all Russian operations by the end of 2022.
On June 28, Nokian Tyres P.L.C. said its board of directors had approved a "controlled exit" from Russia, explaining that the war and subsequent sanctions make it "no longer feasible nor sustainable" to continue operating there.
Michelin said it is considering transferring control of its administrative, sales and industrial operations to current local management, in order to provide "the most favorable framework possible" for the 750 employees at the Davydovo plant, located about 100 kilometers from Moscow.
Michelin said it employs 1,000 total in Russia.
According to Michelin, the Russian plant has an annual production capacity of 1.5 to 2 million tires, mainly for passenger cars. Michelin said its sales in the country represent 2% of the company's total sales and 1% of its global car tire production.
Michelin said the transfer of operations would have a financial impact of around $263 million (or 250 million Euro). The company said the move would not impact its overall financial guidance.
Other tire makers with plants in Russia include:
- Pirelli & C. S.p.A., which announced March 19 it was throttling back activities at its two plants in Russia;.
- Yokohama Tire Corp. Ltd., which said March 18 it was halting production at the passenger tire plant run by its Russian subsidiary, L.L.C. Yokohama R.P.Z., in Lipetsk, Russia.
- Bridgestone Corp.,which announced on March 14 that it was suspending production of tires at its plant in Ulyanovsk, Russia, and was halting exports to the country; and
- Continental A.G., which recently restarted production temporarily at its passenger tire plant in Kulaga, Russia, in an effort to keep local workers safe.
- Titan International Inc., which operates a farm tire plant in Volgograd, Russia, has not commented publicly on the operating status of that plant.