Tireless driver of efficiency

Published on Sunday 14 September 2008 21:44

Monday Interview - Trevor Haines

IT FLEXES, and releases. Flexes. Releases." Trevor Haines is at the front of the room, pressing down on the car tyre balanced on the boardroom table.

The head of the Michelin factory in Dundee is demonstrating the flexibility of the tyre's sidewalls, as part of his explanation of the complexities of the pneumatic tyre.

A number of people at Michelin including Haines seem concerned that I might think the making of a tyre involved simply filling a tyre-shaped mould with rubber.

"There is nothing further from the truth," says Haines. "The tyre is a highly engineered product. It has to be. Forget how safe your car is, your safety is dictated by tyres. The tyre is what keeps you on the road."

Until this point he has been going through a PowerPoint presentation about the French company and its operations. A calm, methodical man who trained as a civil engineer, it is not until he has the tyre in his hands that his passion for what he does becomes clear.

Michelin has been in Dundee for more than 30 years and has so far resisted the strong pull of the tide that has swept away so many manufacturing operations from Britain's shores.

The company came to Dundee in 1972 as part of a government initiative to establish new industries in areas where existing industry had failed. Attracting Michelin was part of a wider strategy meant to create a sort of tyre cluster, with another big manufacturer due to move to the area. Likewise, the Michelin plant site, all 32 hectares of it, was also meant to have a rubber processing plant on it. Neither of these ever materialised but Michelin has continued.

Although employment at the Dundee factory is down slightly from its peak of 1,200, with about 800 staff it is now the biggest industrial employer in the area. It beats the other big private employer in town, NEC.

For Haines, the challenge is clear. "My goal here is to secure the long-term future of the plant. That is it. Every decision I make is aimed at achieving the long-term future of the plant here in Dundee."

Michelin, Goodyear and Bridgestone account for half of worldwide tyre sales.

As with most manufacturing sectors, a growing competitive threat is coming from India and China.

These areas are also where the market for tyres is growing. Emerging markets in Russia and the Far East are growing at more than 10 per cent a year, while the mature Western European and Japanese markets will only continue to grow about 2 to 3 per cent.

"Korean manufacturer Hankook make good tyres and they have aggressive ambitions in the world," says Haines. "Some of these companies are becoming significant players, producing good quality tyres at a very competitive price."

Michelin in Dundee produces about 6.5 million car tyres a year, while bus and lorry tyres are produced in Northern Ireland. Michelin's UK headquarters is in Stoke-on-Trent, and there is a retread facility in Watford.

For car tyres, Michelin is a premium brand. As a result, cost-conscious Brits buy only 5 per cent of the factory's output. The other 95 per cent is shipped to continental Europe, including France, Germany, Spain and Italy – and some to the US.

Most tyres are made for the replacement market, available through dealers like Kwik-Fit, but the firm also provides tyres direct to car manufacturers including Mercedes, Kia, Citron and Peugeot.

What worries Haines are the same problems besetting many industries: massive inflation in the cost of energy and raw materials.

Factory efficiency, as pioneered by the Japanese, is not unlike the development of high performance athletes. While past Olympians might have once celebrated a gold medal with a cigarette and a pint, science and psychology have pushed human performance to extreme levels. And while some may question whether the end of sporting world-record breakers is approaching, Haines is dismissive that manufacturing efficiency in Dundee has a limit.

"I won't see it in my lifetime," says Haines. "There is always something to improve and correct."

The Michelin approach is called the "Michelin Manufacturing Way", an adaptation of Toyota's production system that Michelin began implementing four years ago. It imposes a standardised system of operation across all Michelin's 75 factories worldwide, incorporating the operating methods plucked from individual factories that have proved particularly successful.

One example is Dundee's wind turbines. In 2005, the factory installed two turbines, which provide about 30 per cent of the factory's power. The project has been so successful the company is now looking to do more across the group.

Set up by green energy company Ecotricity, the turbines required very little investment on the part of Michelin and the firm benefits from lower costs of energy as a result.

Continual improvement is preferable to the strategies other tyre manufacturers have brought in, which often involve moving factories wholesale to lower-cost centres in eastern Europe, India and China. In Scotland, there used to be Uniroyal and Continental tyre factories at Newbridge, a Goodyear plant at Garscadden and a Dunlop factory in Uddingston.

Michelin will not be expanding operations or installing new product lines at Dundee, but it will be investing in improvements. Last year, the group was one of seven Michelin factories to get multi-million-pound upgrades to produce Michelin's new range of efficient tyres.

Later, as Haines leads a tour of the factory, he proudly shows the latest addition that he lobbied Clermont-Ferrand, Michelin HQ, to install – a robot that stacks the tyres in a herringbone pattern, eliminating the need for pallets. The interlaced tyres are shrinkwrapped in plastic, making them easier move and meaning more tyres can fit in a lorry. Having proved the system works and is more efficient, it will be rolled out to other factories.

"If we can reduce the cost of manufacturing then we can reduce the price and still maintain our margins," Haines says.