ATLANTA (CNN) - Michelin CEO Edouard Michelin was killed Friday in a boating accident off Ile de Sein in Brittany in western France, the company's communications department told CNN.

The company said that an investigation has been launched into the accident and that managing partner Michel Rollier has assumed leadership of the company.

The news of the death was greeted with dismay by French political and business leaders, with President Jacques Chirac leading tributes.

"At the head of a company which has a special place for French people, Edouard Michelin had considerably modernized his company and made it into a universally renowned French industrial champion," Chirac said in a statement.

Michelin was regarded as one of France's leading business executives and his death cast a particular shadow at a time when France has been going through a crisis of confidence amid political scandals and disagreement over economic reform.

"For a new generation of French company heads, this is really very cruel," Laurence Parisot, head of France's MEDEF employers group told French radio.

The French local authority in Brest said the alarm was raised when Michelin and local fisherman Guillaume Normant failed to return from a fishing trip. His body was later found but rescuers failed to recover any trace of his companion.

The Michelin company, the world's largest tire manufacturer, said that Michel Rollier, who had been joint managing partner along with Edouard Michelin, would "assure the continuity of the company's management."

Edouard Michelin's great grand-father set up the company with his brother Andre in 1889 and their brainchild quickly became embedded in French culture.

In 1898, the company brought out the Michelin Man, a jovial, rotund figure made of tires who came to symbolize the company.

At the turn of the 20th century, Michelin then published its first Red Guide.

The guide encouraged people to use their cars to travel around France and gave advice on the best restaurants and hotels in the region, resulting in the coveted "Michelin Star" awards given out to dining establishments today.

Edouard Michelin entered into the prestigious family set-up in 1985, armed with an engineering degree from the Ecole Centrale de Paris.

He had a stint in France's navy from 1987 to 1988 before going back to the Michelin company where he held various posts in areas such as production and sales.

Edouard then succeeded his father Francois, who had run Michelin for more than 40 years, as head of the company in 1999.

Faced with growing competition from global rivals such as Bridgestone, Edouard Michelin decided to cut 7,500 jobs in 1999 and restructure the company's north American activities to improve the group's profitability.

The decision to cut the jobs led to an attack on Edouard Michelin by then French Prime Minister Lionel Jospin, who called on workers and politicians to unite in protest at the move.

However, Edouard Michelin rode through the backlash, saying the job cuts were necessary to enable his family's company to compete with global rivals in Japan and the United States.

Edouard Michelin had presided over the company's annual shareholder meeting only two weeks ago. His warning that it would be hard for the company to achieve its financial targets for the year due to higher commodity prices sent Michelin shares sliding earlier this month.

Edouard Michelin leaves behind a wife and six children.

-- Reuters contributed to this report.

--------------------

Michelin Man: The Inside Story.