Respecting stakeholder values
A Michelin case study

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Page 3: Customers and employees

Customers

Copyright: MichelinMichelin sells tyres to two markets:

  • vehicle manufacturers
  • users, through an intermediate customer, for example distribution channelssuch as ATS Euromaster.

Within the tyre markets, customers' expectations fall into five main categories for which significance or priority will vary from one customer to another:

  • improved safety
  • lower cost per mile or per tonne transported
  • ability to reach one's destination comfortably and reliably
  • increasing environmental-friendly tyres
  • availability of product support servicesto accompany and facilitate mobility.

The fulfilment of customer needs is a on-going priority for Michelin. This involves anticipation of the best solutions for the future, remaining attentive and openminded. The Company maintains a solid and honest relationship with its customers by providing them with precise and reliable information. Respect for clients is one of Michelin's basic and traditional values.

The business has to take into account the requirements of vehicle manufacturers. With 4,000 research engineers in three continents, Michelin uses its expertise in tyres and vehicles, working closely with vehicle designers and engineers. It forms 'strategic partnerships' to co-develop, for example, Tyre Pressure Monitoring Systems (TPMS) for cars, trucks and earthmovers.

Michelin does not just deal in tyres, however. The company offers services along the supplychain. These help distributors and other partners add value to their activities. Michelin also produces guides, maps, on-line route planning (Via Michelin), breakdown services (Michelin Euro Assist) and lifestyle products (Michelin Lifestyle) to improve mobility for individuals throughout the world.

Employees

Few stakeholders are as vital in a business as its workers.  A worldwide company has to invest a great deal to respect all staff interests.

Staff have a big interest in the success of the company. Every worker hopes to have a secure future. Offering great customer service depends on Michelin's people. It therefore places respect for its people at the heart of its values. This involves some key policies relating to staff.

Part of the daily task of Michelin managers is to care for the career path of each member of staff. With a low turnoverrate of less than 2% of voluntary departures in 2003 and 2004, employees have real regard for these values. Throughout their career, Michelin staff enjoy active training. In 2004, 53% of the Group's employees had access to at least one course.

Michelin has an 'Employee Stock Ownership Plan'. This allows employees to become shareholders. The plan was offered to employees in 16 countries across Europe. 69% took up the chance. This plan is unravelling all over the world. This further identifies company loyalty with the values of staff. If Michelin succeeds, its staff succeed.

Michelin is a global business. To enable the company to know its customer needs and better understand the markets in which it acts, it makes sure all diverse talents are able to express themselves within the company, resulting in improved global performance for the Michelin Group.

Michelin has made diversity management a priority. A multi-cultural environment is just one element of the company's diversity programmeand their European Finance Centre, which opened in Manchester in 2002, successfully demonstrates this aspect. It has a staff of 250, including 24 European nationalities, centralising the financial operations of currently 15 Western European countries. Michelin also has a Diversity Council. The aim is to steer the processes to enable each employee to express the specific nature of his or her individual talent. Having women at managerial level is also a part of this effort.

To encourage progress in work safety, Michelin has organised an annual Safety Challenge for all its industrial plants and rubber plantations since 2003. By using key indicators: frequency rate and severity rate, objectivescan be set and results measured and compared across the world. In 2004 the UK plant at Dundee succeeded in winning the award for experiencing zero accident-related lost work days during the year.

At Michelin, the aim today is to prevent employee injury or illness. A worker must be happy in his or her work. Michelin has embarked on a plan of monitoring workstations. By helping workers to work more at ease, productivity improves. This creates a 'win-win' situation. A happier, healthier and safer worker is a more effective worker.

Respect for the health and well-being of every worker, wherever they are, is at the core of Michelin's values. Health screening and prevention of illness has improved. Michelin has a group doctor to manage the process. Where the existing medical infrastructure is insufficient Michelin will provide the means to improve it. For example, in 2003, the company provided the Davydovo hospital in Russia with equipment for blood analysis, heart checks and respiratory testing. In some parts of Africa, Michelin offers both screening and AIDS awareness programmes.

Michelin | Respecting stakeholder values
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