Michelin Plans Flexible Work Rules Across France in Year

Michelin & Cie., Europe’s largest tiremaker, wants to expand flexible-work rules to all its 17 factories in France in the coming 12 months in response to a sixth straight annual decline in the region’s car market.

“Four plants have adopted the agreement so far, and I hope all plants will adopt it in the year to come,” Chief Executive Officer Jean-Dominique Senard said today at a press conference in Paris.

The CFE-CGC and CFDT unions reached the first agreement with Michelin in January enabling the manufacturer to assign employees to work additional days to compensate for unworked days when production is low. The strategy is part of the Clermont-Ferrand, France-based tiremaker’s reorganization amid a contraction in the European car market that has sent demand to a two-decade low.

Michelin is also seeking sales growth outside Europe and expanding marketing of specialty tires for large vehicles such as mining equipment.

The tiremaker’s workforce totals about 107,000 employees, with 59 percent in Europe. Its French payroll amounted to 24,000 people in France at the end of 2012.

Capacity-utilization rates at Michelin’s European plants are at 50 percent to 60 percent for truck tires and 70 percent for passenger cars and light-truck tires, Senard said on May 17. He ruled out closing plants in France in the immediate future.

Senard said separately today that Michelin intends to maintain yearly capital expenditures at 2 billion euros ($2.6 billion) through 2015. Spending on factories and equipment would be reduced in 2016 and 2017, Senard said.

Before it's here, it's on the Bloomberg Terminal.