Michelin tires in Russia do not roll

Michelin has made the decision to hand over the business to local management due to supply issues and "conditions of general uncertainty".
28.06.2022
RBC
Origin source
The French tire manufacturer Michelin will transfer the Russian business to local management by the end of the year, follows from a message on the company's website.

“Michelin confirms that it is technically impossible to resume production [in Russia], in particular due to supply problems, in the face of general uncertainty <...> The financial risk of the group [due to leaving Russia] is estimated at approximately 250 million euros” , the message says.

In this regard, the new organization will work through an independent structure, the company stressed.

Michelin suspended production in Russia on March 15. "In this very difficult and uncertain context, Michelin's priority is to support all of its employees affected by this crisis, including Michelin employees in Russia," the company said in a statement. Also, the Michelin gastronomic guide previously announced the suspension of activities in Russia.

Michelin Russia employs about 1,000 people, including 750 at the plant in Davydovo (Moscow region). It produces passenger and retreaded truck tires. Michelin sales in the country account for 2% of the group's total sales

Against the background of the Russian special operation in Ukraine, many foreign companies have announced their withdrawal or suspension of activities in Russia. Thus, among representatives of the car market, the suspension of production and supplies was announced by tire manufacturers Bridgestone and Continental, automakers Volkswagen, Skoda, Audi, Porsche, BMW, Mercedes-Benz, as well as Toyota and Nissan.

In early March, the Prosecutor General's Office announced that companies that announced they would stop working in Russia would be strengthened oversight in terms of their compliance with the law. Separately, compliance with employment contracts, the procedure for paying salaries and determining its size, and the fulfillment of obligations to contractors and the state will be checked.

Prosecutor General Igor Krasnov emphasized that a unilateral renunciation of obligations is unacceptable. Each fact of the termination of the work of enterprises will be checked for signs of fictitious or deliberate bankruptcy, for which criminal liability may threaten.

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