First Person: A Tire Giant Helps Grow Small Business
Forming positive relationships with the communities in which they are located is important for companies, large and small. These relationships foster further economic growth within the host communities. With that in mind, Area Development’s editor recently interviewed John Tully, the director of Michelin Development, formed specifically to offer support to new small and medium-size businesses.
John D. Tully, President & COO, Michelin Development Company and Geraldine Gambale, Editor, Area Development Magazine (Q3 2014)
AD: Where did Michelin Development start in North America?
Tully: Michelin Development was originally established in North America in 2006, when the company was faced with a plant closure in Kitchener, Ontario. To help alleviate the economic aspects of a plant closure in the community, Michelin introduced the Michelin Development concept, which provides interest-free loans to create job opportunities as well as business advice and counsel.
In its past eight-year history in North America, Michelin Development has already helped to grow 84 small businesses and was instrumental in creating over 1,300 jobs in Kitchener, Ontario; Opelika, Alabama; and in the Upstate South Carolina area. Michelin Development also exists today in European countries.
AD: I understand there have been some new developments in Nova Scotia,Canada, recently. Can you fill us in?
Tully: Most recently, in March of this year, Michelin Canada announced the very difficult decision to reduce tire production at the Michelin Pictou County plant in Nova Scotia. As the company recognized the significance of the Michelin Pictou County site in the local community and local economy, the Michelin Development program has been launched to assist in the creation of new jobs in the small business sector in the neighboring communities that surround the site. Michelin Development will make $2 million available for five-year small-business loans up to $100,000 at prime interest rates.
AD: What additional services does Michelin Development provide?
Tully: Our community development program provides up to US$50,000 in South Carolina and Alabama and, as mentioned, up to C$100,000 in Nova Scotia for low-interest, individual small business loans and business expertise to foster and encourage private-sector job creation in the community.
AD: How does a company qualify for these services?
Tully: For the Michelin Development Upstate South Carolina program, we welcome applications from socially or economically disadvantaged businesses within the 10-county region of the Upstate.
AD: Can you provide an example of a “success story” generated by the program in your home state of South Carolina or elsewhere?
Tully: Boyd Cycling is one of the most successful clients to come through the Michelin Development program. Originally a manufacturer of entire bicycles and wheels when it started in 2009, the trajectory of its entire business changed when the company received a loan from Michelin Development in 2010. Boyd was able to use the funding to invest in a higher-end, better quality product and reach a whole new customer level. It’s now known for its high-quality wheels and has doubled in size since receiving a loan from Michelin Development.
AD: Has that spawned other developments?
Tully: Aside from financial support, we connected with our corporate public relations team to help generate news stories to grow Boyd’s customer audience, put the company in touch with financial advisors for advice on how to properly manage the new business revenues, as well as provided counsel from our marketing director for our bicycle tire division for industry collaboration. Co-op opportunities are still being explored, and we have used Boyd wheels on our tires when we exhibit at trade shows and events here in the U.S., which has given it a whole new level of exposure as a small business. Additionally, Boyd is one of the sponsors of the Michelin Tri-Club and offers all employees an impressive discount on its products. The relationship continues to offer benefits for a large segment of the population here.
AD: What is the level of a company like Michelin’s social responsibility to the communities in which it operates?
Tully: Fostering strong relationships with and supporting the local communities where Michelin operates remains a top priority for the organization across the globe. One component of Michelin’s “2020 Ambitions” is the commitment to have 100 percent of Michelin sites deploy a community involvement program and to encourage employee involvement in local community actions. Across the globe, Michelin employees donate 30,000 working days a year. Michelin supports education programs, athletic and art initiatives, road safety campaigns, and more.
AD: Are there other examples of how Michelin has helped to foster positive relationships with the communities in which it operates?
Tully: Since 2009, the Michelin Challenge Education program has provided support to high-poverty public elementary schools in the form of tutors, mentors, lunch buddies, and financial contributions. Michelin’s goal for the program is to provide human capital to positively impact the lives of disadvantaged children.
With an emphasis on reading, math, and science, the program has spread from South Carolina to communities throughout North America. In 2012, hundreds of Michelin employees logged more than 7,000 volunteer hours at 18 public schools across North America (15 elementary schools, two middle schools, and one high school). Improved test scores among those children who benefit from Michelin Challenge Education validate that the involvement of Michelin employees is making a measurable difference.