Tiremaker Michelin Launches Green Campaign
October 31, 2007

By Bill Visnic

NEW YORK -- Global tire giant Michelin kicks off a high-profile campaign here to promote a wide-ranging new initiative to improve the efficiency of automotive and truck tires, promote “green” tire choices and to reduce the impact on the environment of tire production.

Michelin’s efforts are likely to have a significant impact on both consumers and the automaker and truckmaker customers it supplies.

Starting on the evening of October 30 and running for four days, Michelin has enormous “green meters” on New York City’s NASDAQ and Reuters electronic billboards displaying reductions in fuel consumption and CO2 emissions attributable to the company’s “green energy saving” tires for passenger cars and commercial trucks since the launch of the first generation of the tires in 1992.

Electronic billboards in Paris, Shanghai and Berlin also will display the worldwide savings, which amount to a staggering 11.6 gallons of fuel and 240 pounds of CO2 every second.

Jim Micali, chairman and president, Michelin North America, says, “The reality of global warming is imposing itself in North America and around the world. The time for urgent action has arrived.”

He says Michelin, the world’s second-largest tiremaker that builds 200 million tires annually, “feels compelled to make a difference,” and is “attacking the challenge of tire-related energy consumption.”

He says 20 percent of energy consumed by passenger cars and as much as 30 percent for trucks comes from tire rolling resistance. For that reason, new technical efforts to further reduce tire rolling resistance by 50 percent over today’s levels is at the heart of Michelin’s initiative, which will unfold for the passenger-vehicle and commercial-truck markets over the next two decades.

Micali says Michelin’s advances also are aimed at doubling the wear life of tires and markedly reducing braking distances. He also tells AutoObserver that the targeted improvements in tire rolling and wear resistance cannot come by sacrificing other performance measures, such as wet traction or overall roadholding. He says advances in tire chemistry, construction and tread design –- as well as sophisticated new computer modeling –- will enable tire engineers to deliver the vastly improved performance.

But before trucks and passenger vehicles can derive benefits from Michelin’s latest generation of energy-efficient tires, market conditions will have to improve. Tires can’t save fuel and cut emissions if nobody’s buying the vehicles that ride on that rubber.

Pete Selleck, president for Michelin’s worldwide truck-tire business, says the North American market for original-equipment truck tires is down 29 percent year-to-date, as Michelin weathers the dual impact of the trucking industry’s deliberate slowdown of new-truck purchases (due to a recent significant change in engine technology) and the continued slowdown of the U.S. economy, which directly impacts road shipping.

And if the North American OE truck-tire market is bad, “the replacement market is more disturbing,” says Selleck, noting that nearly 75 percent of the company’s total truck-tire sales are replacement tires.

Moreover, a drastic downturn in the replacement-tire business also means fewer trucking companies will be fitting Michelin’s new X One lineup, introduced in 2000 and now with more than a half-million on the road, 98 percent of which are in North America.

The X One initiative is interesting in that it replaces the dual wheels on commercial trucks with a single, wider low-rolling-resistance tire, effectively turning an 18-wheeler into a 10-wheeler.

Michelin executives say the change can improve fuel economy by 4 percent, reduce the weight of the tractor-trailer rig by as much as 720 pounds and subsequently allows the hauler to translate that weight savings into increased payload, reducing the number of truck trips required to haul a given payload.

Selleck tells AutoObserver that the market forces –- as well as the general economy –- will slow the adoption of the new truck tires, but still will ultimately translate into a better bottom line for Michelin, which was stung in its home country of France earlier this week by the largest drop in its stock price in more than a year-and-a-half.

Selleck says the new energy-saving tires will help Michelin improve its market position in the long-term, because it’s simply good business. Despite the rocky market conditions, Michelin is investing some $350 million in four U.S. plants, Selleck says, including plants in Spartanburg, South Carolina, and Nova Scotia that make the X One tires.

He says Michelin also won a precedent-setting new contract with the U.S. Department of Defense to manage the supply of all the DoD’s military tires in the U.S. and abroad. Selleck says the 10-year contract, worth $1.7 billion, represents the first time the DoD has entrusted a single company with such duty. The contract began on January 1 this year.

Although the U.S. economy is trending downward and the trucking industry appears to be in a concurrent slide that will take some time to reverse, Selleck is bullish about Michelin’s prospects for its new initiative to make tires part of an environmental solution. And he notes that Michelin has a history of taking a longer view of the transportation industry, a view that trusts in technology to drive business gains.

“If we do what’s in the best interest of our customers, ultimately it will pay off for us,” he says.

Photos: By Michelin
1 – Michelin will have electronic bill boards, “green meters,” like this one in New York’s Times Square, will also be in Paris, Shanghai and Berlin.
2 - Jim Micali, chairman and president, Michelin North America, “the reality of global warming” prompts the tiremakers action.
3 – Michelin is introducing new energy-saving tires.

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