Michelin predicts better 2002

PARIS (Feb. 26)—Groupe Michelin is forecasting an improvement in its operating margin for this year, despite a "challenging" first-half outlook and "poor visibility" for the second-half economic climate. For fiscal 2001, Michelin reported a 10.5-percent drop in operating income, to $951 million, as a number of negative economic factors took hold throughout the year, including: a "brutal" deterioration of trucking activity in North America; a depressed passenger/light truck market in North America; a "dull" European replacement market; the continued negative effects of high raw materials costs; and the continued drop in the value of the euro to dollar. Net income fell 28.1 percent, to $280.3 million. Michelin said its 2002 forecast—for an operating margin of between 6.7 and 7.4 percent—is based on stable oil prices and euro value, rationalizations under way at various Michelin operations, and the positive effects of higher prices and lower inventories.