The global economic system is entering a period of radical change. For global and border distribution chains, this is a problem. However, Michelin CEO Florent Menegaux says that his company's flexibility has continued over the past decade will help win through times of turmoil.
“The world was different before Covid and before President Trump was elected in 2016,” says Menegaux. “This led to change worldwide. We are in 175 countries around the world, but the world is emerging, especially in the relationship between the country. The geographical risk that has been present is now on our agenda. We have also seen the war suddenly in Europe, which has completely changed our chains.
132
Michelin level on Fortunately 500 Europe
Covid changed the way companies manage their employees, too. “We thought that the movement was natural, and suddenly more than half of the world was closed,” continues Menegaux. “Then we had a huge inflation that quickly changed the way we were aware of the distribution chains as well because of the high costs. All that created a new world within Michelin. We think we were probably wrong in defining chaos and order.
A new strategy for new chaos
“The question was whether our strategy was enough in this new world,” says Menegaux. “Michelin has developed better agility.”
One way that Michelin has been improving its tolerance for chaos is by converting a business into a mix, where different materials are joined together to form a single substance. Tires have been mixed for decades, so this business brings the company's expertise. Michelin now makes a simple tub, time belts, large belts used for use in mineral materials, and contaminated fabric for inflatable boats.
175
The number of countries in which Michelin works
The company even makes small mixed materials designed to be inserted into human bodies to fix the damage. The suburbs are currently only 5% of Michelin's business, but the goal is for that part by 20% by 2030. “Developing this technology will also have many benefits for our daily tires that will be used in the world,” says Menegaux.
World competition has been building for years and there is no sign of deterioration in the tire business even with the new tax governments. China is the most obvious competitor now, but the threat is nothing new. “For the last 15 years, we have been competing with China, and this strengthens us, if they comply with the acceptable rules of the game,” says Menegaux. “We have made a lot of real advances in our technologies because of pressure from China. When I joined Michelin, pressure was coming from Japan. After that, we had Korea.
“The question was whether our strategy was enough in this new world. Michelin has developed better courage.”
Michelin's CEO, Florent Tegaux
Michelin has been improving his manufacturing structure for years to adapt to these changing market conditions. “We had a lot of plants for historical reasons,” says Menegaux. “We used to develop our scattered symbols in Europe, because we were able to export it.
“We have corrected how the world's distribution chain should be made,” says Menegaux. “For a while now, we have had a local and local vision. Finding something important for your production from another part of the world may not be a wise thing unless you are forced to do so. For example, natural ball trees did not grow in Italy.
Taxes will not end globalization, change its origin
The current tax war is intended to fight equality between the cost of manufacturing in different countries, but Menegaux thinks this will not hinder globalization, which has been a major benefit to the world. “We have already been prepared now,” he says.
“However, the path to this globalization can be made. How do you make sure that wealth is evenly divided between countries, but also among the population? If you are neat, you can reduce costs.
Michelin's localization and hybrid strategies can make it more dangerous for American tax war than other world companies. “About 70% of what we sell in America is offered in America,” says Menegaux. “The tariff will have an impact, but less than one can imagine. North America is built on the NAFTA agreement, which promised the free flow between Canada, Mexico and America” This became the USMCA under the former Trump presidency. “Changing those rules suddenly will not be effective for those three countries. The economy will suffer because of tariffs, and citizens will suffer because it will mean a sense of influence. It is impossible for us to change the distribution chains immediately. In short, Michelin will have to increase his price. “What will happen is our customers will have to pay more, or they will change it at an affordable price from other products. But we are better than most of our competitors.”
However, globalization is changing even if it is not finished. “It's no longer chaos, it's a new command,” says Menegaux. “We are not worthy of this as chaos. We will be able to get used to it now. Europe should take a major role in the world, like China, like India tomorrow, like America. What we miss in Europe is now a vision. The vision when we built the EU was to make peace in Europe.
Europe should play a major role in the world, like China, like India tomorrow, like America. What we miss in Europe right now is a vision …
Florent Tegaux
Composites business is probably a major change of Michelin towards great agility and long -term plan. “Along with composites, we define a new business community that did not exist before,” says Menegaux. But it's just one part of change towards more flexibility. “It's like cooking well,” concludes Menegaux – it's a Frenchman, after all. “Sometimes you need more salt, sometimes you need more sugar. It's not the same. You change based on a particular situation. It's a question of getting used to instant attention, rather than changing a long -term strategy. We are open about where we want to go. We don't know the journey to get there.”
This story was previously shown Bahati.com
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