Michelin has suspended a supply contract with the Aeroflot PJSC for airplane tires and plans to shut down operations at a factory near Moscow. This comes as another blow to Russia’s aviation industry and car tire production.
About 1% of Michelin’s global production takes place in Russia. The company earns 2% of its revenue from sales within the country and employs about 1,000 people. Three-quarters of the workers are based at a plant in Davydovo.
Michelin is one of several companies that have halted operations in Russia. Others include credit card companies, fashion retailers, automakers, and food companies. This was due to President Vladimir Putin’s invasion of Ukraine.
According to a spokesman, Michelin’s exports included tires for airplanes for Aeroflot. The suspension followed a European Union sanction barring supply of services, parts, and aircraft to Russian airlines. The EU also shut its airspace to Russian airplanes.
The Daydovo plant produces about 1.5 million to 2 million tires every year. It employs about 750 people who manufacture retreaded truck Michelin tires and passenger car tires. The move to stop operations will cause stress in the supply chains for some automakers.
Ukraine is also a major supplier of wire harnesses used to power electrical systems in cars. Michelin is already looking for other sources of oils, polymers, carbon black, and resins used in plants outside Russia.
The company also plans to stop operations in several plants in the EU due to supply-chain disruptions related to the war. Some of the problems experienced include transport and logistics issues that have affected the supply of parts to factories and products to clients.