Michelin North America President on Investing in U.S. Factories

By Business Leaders FOXBusiness

Michelin North America Pres. on new tire tech, taxes

Michelin North America Chairman and President Pete Selleck on the impact of oil prices on business, the company's new tire technology, the economy and corporate taxes.

Growing demand for sport-utility and performance vehicles has spurred Michelin to increase production at its U.S. plants.

Continue Reading Below

Pete Selleck, chairman and president of Michelin North America, pointed to the number of miles driven in America as a positive trend for the automotive and tire market. Vehicle miles plateaued following the recession. But according to the Federal Highway Administration, U.S. motorists traveled 1.26 trillion miles from January through May, an all-time high for the first five months of the year.

Meanwhile, the average vehicle in the U.S. is 11.5 years old, a record high.

Both developments support demand for replacement tires, and rising sales of trucks and trailers are lifting Michelin’s business as well. Selleck said the truck and trailer market is up 17% for Michelin this year.

Sales are moving at such a quick pace that Michelin needs to supplement its U.S. supply with imported tires. Therefore, Michelin is investing in American factories to keep up with demand.

“We are, in fact, increasing capacity at many of our existing plants,” Selleck, who took charge of the French tire maker’s North American operations in 2011, told FOXBusiness.com.

Continue Reading Below

In June, Michelin announced a $22 million plan to expand capacity at its Alabama plant, where the company will increase production of high-performance light truck and SUV tires.

Selleck added that further expansion is possible “if demand sustains itself and imports remain at a high level.”

SUVs and pickup trucks have lifted U.S. auto sales amid cheaper gas prices and a cavalcade of new models. Sports cars also are doing well, another boon to the tire industry. Performance tires, which are more technologically advanced, command higher prices.

Michelin established its presence in the U.S. about 40 years ago. The company’s North American headquarters is located in South Carolina, and Michelin plants are spread across the state. Michelin also has factories in Georgia, Kentucky, Indiana, North Carolina, Missouri and Oklahoma.

What do you think?

Click the button below to comment on this article.