Michelin expects wage hike amid falling energy, logistics costs
Date
2/13/2024 8:28:07 AM
(MENAFN) Michelin, the renowned French tire manufacturer, anticipates an uptick in worker wages amidst a backdrop of diminishing energy prices and logistical expenses throughout the current year, notwithstanding geopolitical tensions in regions like the southern Red Sea. Yves Chapeau, the company's chief financial officer, conveyed in a telephone interview with Bloomberg News Agency that the potential downturn in transportation and energy expenditures could offset the impact of wage hikes over the entirety of the current year.
In a bid to enhance employee compensation, Michelin aims to implement a 5 percent wage increase for its workers in France during the ongoing year. Concurrently, the company is optimistic about the prospect of reduced energy, transportation, and certain raw material costs. Despite concerns surrounding the navigation crisis in the Red Sea, with ships rerouting around Africa due to heightened risks, Michelin remains relatively unfazed. Chapeau noted that while this crisis may prolong journey times by 10 to 12 days for ships traveling between Asia and Europe, its impact is projected to be minimal, accounting for approximately 4 percent of the company's total production or raw material consumption.
It is worth noting that numerous international navigation and maritime transport firms have opted to avoid the Red Sea and the Bab al-Mandab Strait due to security risks posed to commercial vessels. Chapeau emphasized that the current maritime transport crisis pales in comparison to the supply chain disruptions witnessed globally in late 2021 and early 2022.
Additionally, Chapeau underscored Michelin's readiness to pursue merger and acquisition opportunities, both within the tire manufacturing sector and in other domains. Responding to inquiries regarding the company's willingness to engage in acquisition deals exceeding one billion euros, Chapeau asserted, "We can consider any opportunity based on the deal size and its potential benefits." Michelin's openness to strategic acquisitions reflects its commitment to growth and diversification in alignment with evolving market dynamics.
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