Second consecutive five-year option worth $80 million
Greenville, S.C. (Jan. 20, 2011) – The U.S. Navy has exercised a second five-year option to extend its tire supply contract with Michelin. The contract term began in Jan. 2000 and includes supply of 100 percent of the Navy's aircraft tires around the world, including deployed aircraft carriers.
Michelin's management of the Navy's tire performance-based logistics (PBL) program has eliminated backorders, reduced the Navy wholesale tire inventory, and reduced retail allowances by two-thirds, worth nearly $2 million. Michelin has also reduced logistics response times resulting in 99 percent on-time delivery anywhere in the world in four days or less
"It's an honor to have this opportunity to serve our men and women in uniform," said Brett Carnes, director of military sales, Michelin Aircraft Tire Company, Inc. "Our goal is to make sure they have the support they need to carry out their duties, both here and abroad. We appreciate the indispensable help of our logistics partner Lockheed Martin in carrying out this mission."
Michelin also has a similar contract with the Defense Logistics Agency, known as the Aircraft Tire Privatization (ATPI), to supply aircraft tires to the US Air force, the US Army, and some allied foreign militaries. The ATPI program is approximately two and one-half times larger than the Navy's program, in terms of tire volumes, and Michelin still maintains a global on-time delivery rate of 98.7 percent.