UPDATE 2-Michelin to focus on cash; no capital hike plans

* Not planning capital increase in short-term

* Continues to focus on stock management

* Share up slightly

(Adds extra CEO comments)

By Helen Massy-Beresford

CLERMONT-FERRAND, France, May 15 (Reuters) - French tyre manufacturer Michelin (MICP.PA) has no short-term plans for a capital increase and will continue to focus on cash and stock management amid the industry crisis, executives said on Friday.

Michelin shares rose 0.16 percent to 38.26 euro by 1058 GMT.

Managing partner and chief executive Michel Rollier said the group was focusing on managing stocks, which he said were still "too high" at the end of March, to face up to a crisis that is battering the industry as demand for cars falls.

"One day of production that is not sold equates to 30 million euros ($40.82 million) of extra debt," Rollier said.

Managing partner Jean-Dominique Senard told the shareholders' meeting that controlling stocks "is sometimes painful and difficult but it is imperative."

The second and probably the third quarters of 2009 would likely be worse than last year, Rollier said, adding that the group could not afford the fourth quarter to be below the level of 2008, when car demand plunged sharply as the worsening economic outlook dented consumer confidence.

The group was seeing slight signs of improvement in its tourism tyre sector, Rollier added, speaking after the shareholders' meeting in Clermont-Ferrand, central France, where the company has its headquarters.

Angry union members staged a noisy demonstration outside the meeting, letting off firecrackers and throwing eggs as part of a protest against job cuts at the company, which like its peers has been hit by a worldwide slump in demand for cars. Michelin, whose biggest competitor is Japan's Bridgestone Corp (5108.T), last month reported a 14.2 percent fall in first quarter sales, but said it was on track to meet its full year goal of achieving positive free cash flow.

Senard said at the time that he could not rule out achieving positive free cash flow in the first half. [ID:nLS521598]

Rollier told shareholders he saw little sign of a real improvement in the world economy, but added that none of the group's major projects would be put at risk by the crisis, despite a cut in investments to 700 million euros in 2009 -- around half of its normal level. ($1=.7349 Euro) (Editing by Marcel Michelson)