Sudden loss of boss creates cloud over Michelin

29th May 2006, Comments 0 comments

PARIS, May 29, 2006 (AFP) - Shares in the Michelin tyre company fell on Monday on uncertainty over group strategy following the death by drowning of company chief Edouard Michelin.

PARIS, May 29, 2006 (AFP) - Shares in the Michelin tyre company fell on Monday on uncertainty over group strategy following the death by drowning of company chief Edouard Michelin.

Analysts expressed confidence in joint manager Michel Rollier who has been appointed to run the business, the biggest tyre manufacturer in the world, until a new president is named.

But the price of shares in the group was showing a fall of 1.37 percent to EUR 50.50 at mid-day.

Brokerage CMCIC commented: "A period of deep uncertainty has begun." It said the "no member of the (Michelin) family of five brothers and sisters appears likely to succeed Edouard".

And at Exane BNP Paribas, analyst Petra Horn said: "The ultimate succession could be a delicate matter because traditionally the position of the president and managing director has been held by a member of the Michelin family."

She also noted that the company had an unusual share structure whereby decision-making was concentrated in a few hands to limit the influence of shareholders.

Edouard Michelin drowned on Friday while fishing from a boat off northwest France.

Analysts said that the group was in good shape and that Edouard Michelin had laid down and driven clear strategic direction for the business.

Under Edouard Michelin, the Michelin group had changed fundamentally and had adapted its strategy, aiming increasingly at the high end of the tyre market and expanding in Asia in a highly competitive market, they said.

Analysts said that they were confident that Rollier could run the company until a successor to Edouard Michelin was appointed.

Horn said that Rollier knew the company well and was well known in the financial sector because he had been group finance director from 1999 to 2005.

Analysts also remarked that Rollier would work with the 13 members of the group's executive council.

It was also possible that the man Rollier had replaced, the former joint manager Rene Zingraff, might be asked to return to help.

Copyright AFP

Subject: French news

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