Industry Report - Tire Review Magazine

Industry Report

HAPPY NEW YEARTen Tiremakers Hike Prices 2.5% to 6%

HAPPY NEW YEAR
Ten Tiremakers Hike Prices 2.5% to 6%

The flood gates opened in December as nine tiremakers announced 2002 price increases on their branded and private brand products.

Bridgestone/Firestone North American Tire bumped consumer and commercial replacement tire prices up to 3% on all its Bridgestone, Firestone, Dayton and associate brand lines, as well as one its private brand contracts, effective Feb. 1.

Cooper is raising prices up to 4% on its branded passenger and light truck/SUV products and private brand contracts as of Mar. 1.

As of Jan. 1, Goodyear boosted the prices on its Goodyear, Kelly and Dunlop branded passenger and light truck/SUV tires up to 5%, and its Goodyear, Kelly, Dunlop and Steelmark medium truck tires up to 3%.

Hankook Tire America is raising prices on all its consumer products and medium truck tires by 3%, effective Mar. 1. On the same date, Kumho Tire USA will hike its passenger and light truck/SUV tire prices by 4%, and its medium truck tire prices by 3%.

Michelin Americas Small Tires plans to increase prices on its Michelin, BFGoodrich, Uniroyal and associate brand passenger and light truck/SUV lines by up to 6%, effective Mar. 1. The same increase is being applied to its private brand contracts. There was no announcement on Michelin’s commercial lines.

Pirelli Tire North America is also raising prices Mar. 1, by up to 5% on its passenger and light truck/SUV products.

Toyo Tire (USA) is boosting its passenger and light truck/SUV tire prices by up to 4%, while taking increases up to 3% on its medium truck tires and up to 2% on its OTR tires. Toyo’s increase is also effective Mar. 1.

As of Jan. 1, Yokohama Tire took a 2.5% increase on its OTR tires. It plans to boost prices on its medium truck and commercial light truck tires up to 3%, and on its passenger and light truck/SUV tires by up to 4%, as of Feb. 1.

All cited increased manufacturing and raw materials costs as the reason behind the increases. At press time, Continental Tire North America had made no announcements regarding price increases.

Members Elect 10 New Directors to TANA Board in Second Open Vote
In the second open election of directors in its history, Tire Association of North America (TANA) members named 10 new directors, who began three-year terms at the recent International Tire Expo in Las Vegas.

Elected to the TANA board: John Adams, Big O Tires, Englewood, Colo.; Gary Albright, Becker Tire, Great Bend, Kan.; Barbara Briggs, Briggs & Sons Tire, Fayetteville, N.C.; Ernie Caraminico, Amityville Firestone, Amityville, N.Y.; Jim Melvin, Tire Pros Inc., Johnston, R.I.; Bud Mullaney, Mullaney Tire Service, Matawan, N.J.; Don Nebelsick, Don’s Tire and Supply, Abilene, Kan.; Jim Short, Radial Tire and Bandag, Jasper, Ala.; Doug Swanson, Modern Tire Co., Eden Prairie, Minn.; and Stu Zurcher, Zurcher Tire and Auto, Angola, Ind.

Two U.S. Equity Groups Bidding for Kumho Tire Operations
Two U.S.-based private equity consortiums were expected to submit final proposals in mid-January to purchase an 80% stake in Kumho Tire Co. from the ailing Kumho Group. Bids were expected to exceed $1 billion, and a spokesman for Kumho Group said the conglomerate planned to select the winning bid by Feb. 1.

Kumho Industrial, a subsidiary of Kumho Group, owns the South Korean tiremaker, and will retain a 20% share in the business. The firm is reportedly $2.4 billion in debt and is selling a majority interest in the tire operations to raise capital for its troubled Asiana Airlines unit and other operations.

While Kumho would not name the bidders, reports from South Korea indicated that one bidding group includes U.S. equity investors JP Morgan Partners and Carlyle Group, and Switzerland’s UBS Capital. The other group reportedly includes Goldman Sachs and Newbridge Capital.

Cooper and NSC Launch 3-Year Consumer Education Program
Cooper Tire & Rubber has partnered with the National Safety Council (NSC) on a new three-year consumer tire safety education program.

The program will include a brochure on tire maintenance and safety that will be distributed by Cooper dealers throughout the U.S. and Canada, and by the NSC to its 37,500 members. It will appear on Cooper’s Web site at www.coopertire.com. In addition, Cooper will provide tire safety information to local school driver education programs.

While Cooper admits this education program will help it meet the terms of a proposed class action suit settlement (TR, Dec. 2001) – the final court decision on which was due Jan. 29 – the tiremaker said it had been working on this program with NSC well before the proposed settlement was reached.

TRIB Offers Updated Retreading and Repair Recommended Practices
The newly revised and updated version of Industry Recommended Practices for Tire Retreading & Tire Repairing is now available for purchase from the Tire Retread Information Bureau (TRIB).

The new version, dated June 7, 2001, supercedes the previous Standards as revised in September 1995. The new revision was developed by the consensus of the International Tire & Rubber Association, Tire Association of North America, Tread Rubber and Tire Repair Material Manufacturers Association, Rubber Manufacturers Association, and others, and TRIB is the sole distributor of the revision.

To order, contract TRIB at 831-372-1917 or by e-mail at [email protected].

New NHTSA Education Plan Gets RMA, TANA and ITRA Support
With a chorus of support from both the Rubber Manufacturers Association (RMA), the Tire Association of North America (TANA), and the International Tire & Rubber Association (ITRA), the National Highway Traffic Safety Administration (NHTSA) launched its own consumer tire education campaign – "Tire Safety: Everything Rides on It" – in late November.

NHTSA’s effort, mandated by the TREAD Act, will include radio public service announcements on some 2,000 stations, magazine and newspaper ads, and brochures co-developed by NHTSA and unnamed tire and auto associations.

TANA and ITRA plan to help publicize the NHTSA campaign to all tire businesses with "direct contract with consumers," according to a TANA statement.

The RMA also praised the effort, and said it will help distribute NHTSA’s new brochure. "Combined with the industry’s consumer education efforts, motorists will have ample sources of information to help maximize safety with proper tire care and maintenance," said Donald Shea, RMA president and CEO.

Tech Names New Exec Leadership; Top Spots Remain in the Family
In the wake of the unexpected death of its president and CEO, Pauline Chambers-Yost, last September, tire repair maker Tech International has reorganized its management team.

Cheryl Poulton, Mrs. Chambers-Yost’s daughter, is now president and corporate secretary. Michael Chambers was appointed chairman and executive vice president. Gary Chambers Jr. was named assistant corporate secretary and was elected to Tech’s board of directors. He also will remain president and CEO of Tech subsidiary Cham-Cor Industries.

Cooper, TBC Sign 10-Year Private Brand Supply Contract Extension
Celebrating its 30-year relationship, TBC Corp. and Cooper Tire & Rubber Co. signed a 10-year private brand supply contract extension, making Cooper one of TBC’s primary manufacturing partners through 2014.

Cooper produces an unspecified portion of TBC’s Multi-Mile, Cordovan and Sigma private brands. TBC CEO Larry Day explained that its current contract with Cooper runs through 2004. "Our relationship with key suppliers like Cooper provides a foundation stone for future growth and expansion."

of note

  • Bridgestone Potenza S-03 Pole Position radial has received European Car’s "Select Gear 2001," one of 10 aftermarket products honored in the magazine’s December 2001 issue.
  • Michelin North America selected Edelman Public Relations Worldwide to handle its corporate and Michelin brand accounts in the U.S. and Canada.
  • Goodyear will spend $120 million to expand its tire plant in Dalian, China, tripling the plant’s capacity to 5.3 million domestic and export replacement and OE passenger tires annually by 2007.
  • Sumitomo Rubber Industries said it would lose $66.5 million this fiscal year, a result more than $100 million lower than its projected profit of $47 million.
  • Two-location Quirk Tire & Service in Westborough, Mass., purchased the 50-location VIP Discount Auto Center chain, headquartered in Lewiston, Maine. Terms were not disclosed, and the deal gives Quirk 49 retail locations and three commercial tire centers.
  • Despite ending bitter strikes at its plants in Des Moines and Natchez, Miss., Titan International is still pressing ahead with its federal racketeering suit against the United Steelworkers of America.
  • NHTSA issued two new TREAD Act rule proposals, one covering consumer reimbursements for any costs incurred prior to a voluntary recall, and the second on acceleration of a manufacturer’s recall program.
  • Despite a sales increase over the same period last year, SmarTire Systems posted a $1.6 million net loss for the period that ended Oct. 31.
  • Targeting sports cars and minivans, Bridgestone’s new Potenza GIII line – launching this month – features base technology that increases new-tire performance and cuts performance loss as it wears. The worldwide annual sales goal is 2.5 million units.
  • Kumho Tire USA is the official tire supplier for the SCCA Pro Spec Miata Series, where competitors will use the new Kumho ECSTA V700.
  • Bridgestone/Firestone is recalling some 40,000 OE tires on Ford F-350 and F-250 pickup trucks in Brazil, which the company called a "preventative measure" after numerous tread separation complaints.
  • KYB America has launched a new Web site – www.kyb.com – with consumer and installer information on its shocks and ride control products.
  • Increased sales and cost-cutting pushed Yokohama Rubber Co.’s first half operating profit up 31.6% to $46.48 million, and cut its net profit to a loss of just $4.4 million, up from last year’s loss of $44.31 million.
  • New Hampshire’s Tire Warehouse is donating $1,111 per month to the American Red Cross Disaster Relief Fund for the next 11 months, to support victims of the Sept. 11 terrorist attacks.
  • Business and individual taxpayers can enroll and pay all Federal taxes, including quarterly payments, through a new secure Web site at www.eftps.com.

ACCC Re-elects Case as Chairman;Adds Englewood Tire as Member
Claude Case, the popular and well-known former president of Charlie Case Tire in Phoenix, Ariz., was elected to a third term as chairman of American Car Care Centers (ACCC). Meanwhile, ACCC welcomed Englewood Tire Wholesale as a full member-distributor, effectively replacing long-time ACCC member Wholesale Tire Co., which was bought by Somerset Tire Service late last year.

While ACCC’s charter states that a new chairman must be elected every two years, ACCC members felt that "with the myriad of changes and events both in and out of the industry, that stability and consistent leadership would be best for the organization," according to Len Lewin, ACCC president and COO.

And Case was re-elected despite no longer having an ownership position in Charlie Case Tire, which he agreed to sell to Am-Pac Distributors last November. Case will remain with Am-Pac in an executive position, and Am-Pac is an ACCC member.

Case deserves a lot of the credit, said Lewin, for ACCC’s growth to more than 1,030 dealers and significant enhancements in its program offering.

Meanwhile, Lyndhurst, N.J.-based Englewood Tire takes over the ACCC territory vacated by the former Wholesale Tire Co. after it was bought by Somerset Tire. Somerset declined to join ACCC, leaving the territory open. In addition to Wholesale Tire’s New York/New Jersey region, Englewood also will handle portions of Connecticut and most of the Philadelphia market.

Englewood has three warehouses, with plans to add two more near-term, as well as nine Discount Tire Centers retail stores. Already a Michelin distributor, Englewood also handled Bridgestone, Firestone, Continental, General, Yokohama, Kumho and YKS brands.

Kogel Interim ITRA Exec; Bozarth as tech advisor
Ross Kogel, executive vice president of the Tire Association of North America, is now also the interim executive vice president of the International Tire & Rubber Association (ITRA). Kogel replaces Marvin Bozarth, who retired as ITRA executive director at the end of 2001, and is now serving as senior technical advisor to the organization.

Kogel had already been tabbed to be the executive vice president of the merged TANA and ITRA, should members vote for the merger plan, as of July 1. There was no word on whether ITRA directors would name a permanent executive if the merger plan is rejected. The results of concurrent merger votes by TANA and ITRA membership are expected around Feb. 1.

Bozarth, 65, had served as ITRA head since January 1991.

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