How Cuba, North Korea and Rosekind Can Impact Tire Industry

Never thought I’d see the day that I could travel to Cuba, or that North Korea – a country that can’t even keep the lights on at night – would actually cause knees to buckle.

Welcome to a whole new world.

So what does Cuba and North Korea have to do with tires and the tire industry? A lot, actually, though not all is positive.

First Cuba. After more than five decades of being shut out and shunned by the U.S., it appears that by year’s end the pathways to normalized diplomatic relations, trade, economic development and travel will be complete. Not here for a political debate; it is obvious that Cuba is starved for both stable paying jobs and modern products.

In a country where ’56 Chevys, considered high-dollar collector cars on these shores, are everyday grocery getters, Cuba really needs tires and jobs.

And we need a source of low-labor-cost production.

Heard this the other day: Good-paying factory jobs in Cuba pay $19.

A month.

That’s 63 cents a day U.S.

I’m pretty sure we can do a bit better.

Already a number of big name American firms are lining up for new-found Cuban dollars. McDonald’s, John Deere, PepsiCo, Caterpillar and many others have already voiced their desire to move in. One wonders, though, how well they could do in a country where “good paying” is 63 cents a day.

No doubt the island nation and its people could use the investment, and the resulting changes to the country and its people will come fast, and create certain strains and political concerns. History should always be a great teacher, and the caution here is that all this investment doesn’t bring with it all of the things that led to the Castro Revolution.

So what about the Hermit Kingdom, which brought mighty Sony to its knees?

The lesson here is to never think your computer system, your data, your lives are impervious to being “hacked.”

“It could never happen to me,” “We have the best IT in the world,” or “I spent a ton of money to protect our computer system” are quite possibly the silliest statements to even believe.

Whether North Korea actually did the deed, hired it out or wasn’t even involved but someone took advantage of the cover the movie controversy provided is irrelevant.

Someone hacked Sony. Big time. Bigger than Home Depot. Bigger than Target.

Big enough for us to capitulate on some of our closely held values.

* * * * * * * *

New NHTSA administrator Mark Rosekind is said to be an “enforcer.”

What we really, really need is a “doer.” Someone who doesn’t paw at the ground or wander in circles or avoids doing all together.

You can’t enforce what you don’t do. And over the last decade, NHTSA has racked up a healthy list of Didn’t Do’s on its To Do List.

Rosekind, who was easily confirmed by the U.S. Senate on Dec. 16, is a sleep scientist and fatigue expert by training, who once worked for NASA, and most recently was at the National Transportation Safety Board.

No less than legendary former NHTSA administrator Joan Claybrook weighed in on the guy, though someone back-handed: “I think he’s going to be an enforcement guy, he understands. He certainly understands enforcement because that’s part of what they do at the NTSB.”

Yes, NTSB does that, but what it doesn’t do is move swiftly to create necessary and meaningful regulation. That’s something NHTSA needs to focus on, not chasing enforcement.

So let’s hope Mr. Rosekind brings some game, unlike the last few administrators.

* * * * * * * *

Though the punitive-duties-on-imported-Chinese-consumer-tires issue will remain up in the air for the next few months, already we’re starting to hear rumbles of tire price increases being teed up for the early part of the New Year.

The increase rates appear to be low – one analyst sees 1%-2% hikes on the horizon – so there may not be much need for panic. Shipments – at least those anyone can actually count – appear to be on the rise. According to our market research partner KeyBanc Capital Markets, through October dealers were reporting a month-over-month unit sales increase of 2.7%. That follows September’s 2.2% MoM bump, August’s 0.90%, and July’s 3.5%.

Much is yet to be decided and resolved on the duties. Those I’ve spoken with – dealers and tire company execs – hope the market doesn’t overreact and throw big price increase in the path of the slow, painful recovery of shipments and sales.

* * * * * * * *

That’s it for 2014. It was a pretty good year, all in all, and signs point to an even better 2015.

We need a string of good news and good results after the bleakness of the Great Recession.

Here’s to all of our wonderful, loyal readers. We wish you a Happy and Blessed Holiday Season, and a safe and prosperous New Year!

As you have likely experienced firsthand, the past few years have seen rapid changes in the tire industry. Supply chain delays, labor constraints and the shift to electrification—among countless other macro challenges—are constantly requiring dealers to reevaluate their business strategies and operations to adjust to the current environment. It’s critical that flexibility and resiliency remain top-of-mind as dealers navigate these obstacles. One way to remain agile is fostering a culture of learning and development for your staff. At ATD, we’ve found that integrating technology, insights and data analytics into our reskilling and training programs is helping to create sustainable solutions. By understanding the importance of training and how to build an effective program, you, too, can take advantage of the many benefits for both you and your business.