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Michelin, Edouard 1963–

Edouard Michelin
1963

President and chief executive officer, Groupe Michelin

Nationality: French.

Born: August 13, 1963, in Clermont-Ferrand, France.

Education: École centrale de Paris, BS, 1985.

Family: Son of François Michelin (company president) and Bernadette Montagne; married; children: five.

Career: French navy, 19871989; service on nuclear submarine; Groupe Michelin, 19891991, worker and plant manager; Michelin North America, 19911993, president and chief operating officer; Groupe Michelin, 1999, president and chief executive officer.

Publications: Forward for Challenge Bibendum: Oui aux voitures propres, Expédition, 2001.

Address: Compagnie Général des Établissements Michelin, 4 rue de Terrail, 63040 Clermont-Ferrand Cedex, France; http://www.michelin.com.

Edouard Michelin was groomed by his father to take over the Groupe Michelin, a tire maker founded in the late nineteenth century by André Michelin. Edouard ran Michelin's U.S. operation in the early 1990s before becoming president and chief executive officer in 1999. Edouard inherited a truly global company and led it to overtake its rival Bridgestone/Firestone. Michelin changed his company's tradition of secrecy and took leadership in the promotion of a sustainable global automobile culture.

LE DAUPHIN

Edouard Michelin was born in Clermont-Ferrand, in the heart of the French Auvergne, on August 13, 1963. He was the youngest son of François and Bernadette Michelin. From the beginning Edouard was seen as the dauphin, or designated successor of his family's very hereditary company. His eldest brother, Etienne, had chosen the priesthood, while the next in line, Damien and Benôit, were not regarded by their father as management material.

Edouard seemed to have the business acumen of his father and his grandfather and the desire to succeed them. The youngest Michelin followed in the footsteps of his great-great uncle André, the company founder, by studying engineering at the École centrale in Paris. Upon Edouard's graduation in 1985, François started him at the bottom, making tires on the assembly line at Carmes. Edouard used a false identity at work, but everyone knew who he was. Edouard learned purchasing, research, and all aspects of the company, and he was then posted as an apprentice to Michelin's research center in Greenville, South Carolina. Shortly after he began working there, he was drafted into the French navy, where he demonstrated his leadership skills by serving as an officer on a nuclear submarine.

Michelin returned to the family firm in 1989. He was first placed in charge of a factory in France, and then became president and chief operations officer of Michelin North America in 1991. He returned to France in 1993, where he became a full partner alongside his father and René Zingraff. His father had begun preparing him for the succession. Michelin's structure was unique for a company of its size and reputation. It remained an old-fashioned joint-stock company with what Herbert Lottmann described in his book The Michelin Men as a "nineteenth-century management structure," in which the partners were mutually liable. François owned few company assets but all potential liabilities. This structure nonetheless allowed himself, Zingraff, and Edouard to make rapid decisions in the name of Michelin.

During the 1990s there were rumors that Michelin was in trouble. The company's stock remained sluggish, and its shareholders were often left in the dark as to what was happening. Secrecy was a trait of the Michelin culture. In March 1990, François laid off 16,000 workers, one-eighth of the company payroll.

In 1995 Edouard was given the task of explaining Michelin's new European strategy, in which every plant would specialize rather than having all plants making the same thing. Michelin would no longer be organized by country, but by product category. This move cut costs and doubled profits. The following year two new factories were opened in France. The company was evolving from a French to a truly global firm. Of its 114,000 employees, only 15,000 now worked in Clermont-Ferrand and only 15,000 in the rest of France. Only about 15 percent of Michelin tires were now made in France. Over a quarter were made in the rest of Europe, a fifth in the United States, and the remaining 40 percent elsewhere around the world.

In spite of the company's growth, it continued to lose ground in the late 1990s to Bridgestone, the Japanese tire firm that had acquired Ford's supplier, Firestone. Such was the situation when François Michelin felt ready to retire and make way for his talented but perhaps unpredictable son. For Fran-çois, Edouard was the perfect choice to run the company. He had worked his way up through the ranks and observed how Michelin was run for a decade. On June 12, 1999, François retired after appointing Edouard president.

"L'AMERICAIN"

Edouard Michelin took over the tire company's reins at a tough period in its long history. Faced with competition from Bridgestone/Firestone, he announced in September 1999 a plan, agreed upon with his father, to eliminate 7,500 jobs in Europe over three years. Some 2,000 job reductions were planned for North America as well. Notice of these reductions at a time when company earnings were rising upset the Socialist government of Lionel Jospin. Edouard, for his part, did not denounce the government's policy of a 35-hour workweek, which many French managers saw as unrealistic and detrimental to productivity. In spite of this, France's powerful and militant unions protested.

Edouard, now nicknamed "L'americain" due to his overseas experience, responded to the criticism by striving to change Michelin's secretive image. He began to hold press conferences and even let reporters into his factories. Edouard defended the layoffs as necessary in cutting overhead costs and improving competitive efficiency against Bridgestone, but saw them as a justification for a more open stance in communicating with the media and the shareholders.

Edouard used different marketing strategies in different parts of the world. In France, Michelin could still be presented as quintessentially French, as defining what France was all about. In the rest of the European Union, Edouard marketed Michelin as a European company, and in Asia and Latin America as a global one. In the United States, given the growing anti-French sentiment, Michelin presented itself chiefly as an American tire company.

Tires were not the only major product for which Michelin was noted. For decades Michelin had been renowned in both France and Europe for its famous maps and tour guides. The guides originally presented lists of upscale restaurants and hotels that would appeal to the French bourgeoisie. As France became more prosperous, the guides now included restaurants and hotels that appealed to those with modest income. The guides became available in English, Dutch, German, Spanish, Italian, Portuguese, and Japanese and sold up to 100,000 copies annually, accounting for 2 percent of company revenue. Edouard marketed Michelin maps and guides in the United States as well, but they were considerably less popular there, as Americans preferred to buy American-made guides.

EDOUARD MICHELIN'S MANAGEMENT STYLE

Michelin sought to adapt the family firm to a new generation and new global conditions, but slowly and with respect for the company's French traditions. As he explained to Paul Betts of the Financial Times, the transition from father to son was gradual and evolutionary. The partnership structure in which Edouard and René Zingraff risked unlimited liability was retained. Edouard defended it as "an added long term commitment to the business, to transparency, honesty, communication and performance." He made clear to Betts his rejection of the American shareholder and corporate-raider philosophy: "I get quite frustrated by the way financial markets consider enterprises as a mere commodity, a stock pick." Global capital markets were to him easily turned into "weapons of mass destruction." Michelin, on the other hand, would follow a long-term strategy that allowed it to ride out global booms and recessions.

Edouard considered his personal style to be more managerial and less entrepreneurial than his father's: "His philosophy was not to have too much organisation," he told Betts, but "as we managed the transition step by step," even François recognized the need and told his son that the company "clearly needed to introduce more organisation." By 2001 Michelin was enjoying steady growth. When Firestone's sales plummeted as the result of a number of accidents involving SUVs, Michelin became the leading tire company in the world.

MICHELIN'S CRUSADE FOR SUSTAINABLE VEHICLES

In addition to maintaining Michelin's brand identity and its new leadership in automotive tires, Edouard Michelin was very concerned about the future of the vehicles that used his tires. The automobile was here to stay and selling in growing numbers throughout the world. How could the earth's ecosystem possibly support all these new vehicles? Edouard was an early champion of the development of clean, fuel-efficient vehicles, which he did by sponsoring the Challenge Bibendum.

The first Challenge Bibendum was held in 1998. Edouard invited the world's automakers to compete in producing the most economical and environmentally friendly cars and trucks. "We do it because we believe it is the right thing to do," he told the Malaysian Berhad Straits Times (October 12, 2003). "It is Michelin's belief that the automotive industry needed an unbiased forum to demonstrate its commitment to cleaner, greener technologies." In 2002 natural gas and electric cars competed. In 2003 Edouard chose Sonoma, California, as the site of the contest because of California's tough emission laws. Hydrogen cars, trucks, and buses joined the competition. American, Japanese, European, and other vehicles competed not in laboratories but in actual driving conditions. Michelin evaluated them on style, speed, quietness, impact safety, emissions, and fuel efficiency. Edouard Michelin realized that he did not have easy answers for making the cars less environmentally harmful. As he prepared to hold the 2004 Challenge Bibendum in China, he could at least feel comfortable that he provided a yearly forum for automakers and others to seek those answers.

See also entry on Compagnie Général des Établissements Michelin in International Directory of Company Histories.

sources for further information

Albakry, Salehuddin, "Michelin's Green Drive Fuels Change," Berhad New Straits Times (Malaysia), October, 12, 2003.

Betts, Paul, "The New Michelin Man Gets Rolling: Interview Edouard Michelin: Strong," Financial Times, April 25, 2003.

Crumley, Bruce, "Radial Changes," Time Europe, May 20, 2002, p. 107.

Harp, Stephen L., Marketing Michelin: Advertising and Cultural Identity in Twentieth-Century France, Baltimore: Johns Hopkins University Press, 2001.

Lottman, Herbert R., The Michelin Men, Driving an Empire, London: I.B. Taurus, 2003.

David Charles Lewis

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