Michelin and Dow Sign PAX System Supply Agreement
GREENVILLE, S.C., March 14 /PRNewswire/ -- The Michelin Group and The Dow Chemical Company (NYSE: DOW) have signed an agreement for Dow to supply Michelin with a polyurethane-based inner support wheel that will enable an automobile with a flat tire to travel up to 125 miles at 55 miles-per-hour. This run-flat support wheel will be featured in Michelin's PAX system, an innovative, integrated tire/wheel system.
Because of its run-flat capability and other significant improvements over today's conventional or run-flat tires, the PAX System has been called the "next industry standard" in tire/wheel design.
Representatives from both companies met today at Michelin North America's Headquarters in Greenville, SC, to sign the contract for the Michelin-invented PAX System. The PAX System eliminates the need to carry a spare tire, making automobiles lighter weight -- and therefore more fuel-efficient -- and affording extra space for more storage and design features. The PAX System also improves comfort and handling.
Today's signing comes as part of an ongoing joint development agreement between the two companies that began in February of 2000. "We see this contract as the official start to a prosperous and long-term relationship with Michelin and a significant new business opportunity for Dow," said Bob Wood, Business Group President for Dow's Thermoset businesses. "This contract gives Dow an entry into the high potential tire market and provides us with the framework to work with Michelin, the leader in PAX System technology."
The contract guarantees Dow a significant percentage of Michelin's business for polyurethane run-flat support wheels over the coming years. Results of this development will be made available to other PAX System licensees (Goodyear and Pirelli at the present time.)
Based on a 10% market share for new cars, the agreement, over time, could represent hundreds of millions of dollars in annual revenues for Dow.
The polyurethane support ring provided by Dow is mounted on the wheel and is a key component in PAX System's run-flat capability. The tire, which rests on the support ring, can continue to run deflated for up to 125 miles. In addition to the support ring, the PAX System includes an innovative tire-wheel configuration and a pressure-monitoring device.
"At Michelin we know the value of working with other innovators and technology leaders," said Thierry Sortais, the vice president of Michelin's worldwide PAX System Project. "We see the Dow polyurethane support ring as a new and efficient technology. By working with Dow, we've created a competitive advantage for the PAX System."
Martin Wardle, Vice President Purchasing for Michelin North America signed the agreement on behalf of the international tire maker. The official signature for The Dow Chemical Company was penned by Wood.
Michelin manufactures and sells tires for every type of vehicle, including airplanes, automobiles, bicycles, earthmovers, farm equipment, heavy-duty trucks, motorcycles and the space shuttle. The company also publishes travel guides, maps and atlases covering Europe, Asia, Africa and North America. Headquartered in Greenville, S.C., Michelin North America (http://www.michelin.com) employs 26,500 and operates 21 plants in 19 locations.
Dow is a leading science and technology company that provides innovative chemical, plastic and agricultural products and services to many essential consumer markets. With annual sales of $28 billion, Dow serves customers in more than 160 countries and a wide range of markets that are vital to human progress, including food, transportation, health and medicine, personal and home care, and building and construction, among others. Committed to the principles of sustainable development, Dow and its 50,000 employees seek to balance economic, environmental and social responsibilities. For further information about Dow, visit http://www.dow.com.
SOURCE The Dow Chemical Company and The Michelin Group
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