TIRES: COMPAGNIE GENERALE DES ETABLISSEMENTS MICHELIN

Name: Compagnie Generale des Etablissements Michelin

In 1863 Edouard Daubree and Aristide Barbier established a rubber company in Clermont-Ferrand in the middle of France. It was moderately successful but when both founders died the business ran into difficulties. In 1886 the Barbier Family were looking for someone to run the business and picked Andre Michelin, who had married into the clan and was a successful businessman. The problem was that Michelin was too busy to run the rubber company and so asked his brother Edouard, an artist, is he would do it. Michelin agreed and in 1889 the firm was renamed Michelin. Edourad may not have had much business experience but he was in many respects a visionary. At the time air-filled tires were still in an early stage of development. They took a considerable amount of time to change. In 1891 Michelin came up with a new system for a bicycle tire which enabled a tire be changed in a matter of minutes, using a detachable bolt. In an effort to publicize the innovation the Michelin brothers became involved in bicycle racing. This was a big success and in 1895 the pair entered a Daimler in the Bordeaux-Paris-Bordeaux automobile race and race it themselves with their pneumatic tires.

Andre Michelin was not a man to miss a good business opportunity and in 1900, keen to take advantage of the rising interest in automobiles he began to produce the Michelin Guide, outlining local details for visiting drivers.

Expansion was rapid in the early years of the new century with factories being opened in the United States and in Italy and innovation such the detachable wheel rim and treaded tires attracted more and more business. The business boomed in the 1920s and Michelin's innovative product line continued with the introduction of tubeless tires in 1930. The following year Andre died and the Great Depression caused some difficulties although it also provided opportunities. When Citroen failed to pay its tire bills in 1934 Michelin took a shareholding in the company and Edouard's son Pierre became chairman of the car company.

Edouard died in 1940 and with the German invasion of France war, Michelin suffered serious disruption. After the war, however, the firm revived rapidly with the arrival of the radial tire in 1946. This led to steady growth around the world in the 1950s and 1960s. An ambitious new boss Francois Michelin took over the company and in the 1970s Michelin enjoyed further growth but expansion created debt problems and in the early 1980s the company made serious losses and had to be restructured, a move which resulted in heavy job losses and factory closures in Clermont-Ferrand. By 1989 the company had recovered and paid $1.5bn for the Uniroyal Goodrich company. New products boosted sales but the company had to restructure again and reduce its debt load in 1993.

In 1999 Francois Michelin finally retired, passing the company on to his son Edouard Michelin II. His first move was to announce big profits and job cuts on the same day - a move which caused serious industrial trouble, something which Michelin had carefully avoided over the years.

Michelin's involvement in motorsport has been continuous in all different areas of the sport, including rallying and sportscar racing. The company entered Formula 1 with Renault Sport in 1977 and between 1978 and 1984 scored a total of 59 Grand Prix victories and five World Championships. The company then withdrew for F1 and its racing department - the Etude Development Course in Clermont-Ferrand - concentrated on cheaper forms of the sport, notably touring car racing in which the company was dominant in the early 1990s. At the end of 1999 Michelin announced that it would be returning to F1 in 2001 with Williams. The company has not to date had the success it hoped for because of the hugely-successful Ferrari-Bridgestone alliance in recent years.

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