Pirelli to invest $975 million to take on e-economy

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ROME--Italian tire giant Pirelli has announced a $975 million, three-year plan to transform the company to the "new'' economy.

The initiative, making Pirelli the first of Italy's traditional industrial concerns to embrace the Web, would include the use of Web-based distribution, inventory and manufacturing systems as well as the launch of other yet to be announced Internet ventures.

Milan-based Armando Testa will handle advertising. No budget figures were released, but it was reported earlier in the year that Pirelli's global advertising budget was at least $25 million.

The plan, which is being developed in coordination with U.S.-based Cisco Systems, is expected to be fully operational by the end of 2002.

Earlier this year, the company said it would sell its newest product -- the P2500 one-size-fits-all tire -- only on the Internet, requiring customers to log on to make purchases and dealers to log on to receive orders. Customers will have the tires mounted at traditional service stations.

Copyright March 2000, Crain Communications Inc.

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