Tire manufacturing company Michelin announced Tuesday it would be transferring all Russian operations to local management by the end of 2022.
The move comes after Michelin suspended activities in Russia on March 15 following the country's invasion of Ukraine, which was launched in late February.
"Michelin now confirms that it is technically impossible to resume production, due in particular to supply issues, amid a context of general uncertainty," the company wrote in a press release.
"The Group is therefore compelled to plan the transfer of all of its Russian operations by the end of 2022 and is considering the possibility of transferring control of its administrative, sales and industrial operations to the current local management. In doing so, Michelin is preparing the most favorable framework possible for its employees," the release continued.
The new entity would operate through an independent structure, Michelin said.
Michelin's balance sheet exposure sits at an estimated 250 million Euros, or $265 million, from Russian operations, it said. The company explained that the transfer of operations would not impact its financial guidance.
The company's sales in Russia represent 2% of its total sales and 1% of its global car tire production.
Michelin Russia employs approximately 1,000 people, the company noted.