French tire manufacturer Michelin has no short-term plans for a capital increase and will continue to focus on cash and stock management amid an industry crisis, executives said.
Managing partner and chief executive Michel Rollier told shareholders at the company's annual general meeting that the group “would not be absent from the debate” regarding German rival Continental AG, without giving further details.
He said the group was focusing on managing stocks to face up to the crisis.
“All our teams know that one day of production that is not sold equates to €30 million ($40.82 million) of extra debt,” Rollier told the meeting.
Managing partner Jean-Dominique Senard added that controlling stocks “is sometimes painful and difficult but it is imperative.”
Rollier said he saw little sign of a real improvement in the world economy, but added that none of the group's major projects would be put at risk by the crisis, despite a cut in investments to €700 million in 2009 - around half of its normal level.
Rollier was speaking at the shareholders' meeting in Clermont-Ferrand, central France, where the company has its headquarters.
Angry union members staged a noisy demonstration outside the meeting, letting off firecrackers and throwing eggs as part of a protest against job cuts at the company, which like its peers has been hit by a worldwide slump in demand for cars. Michelin, whose biggest competitor is Japan's Bridgestone Corp, last month reported a 14.2% fall in first quarter sales, but said it was on track to meet its full year goal of achieving positive free cash flow.
Senard said at the time that he could not rule out achieving positive free cash flow in the first half. (Reuters)