‘A Transformational year’

Goodyear Cuts 700; Are More Changes Afoot?

Saddled with some $5 billion of debt, a sinking share price, disenchanted dealers, dipping sales and dwindling marketshare, Goodyear’s recent elimination of another 700 salaried jobs may be the first of what could be more dramatic cuts.

Of the 700 positions eliminated by Goodyear in its latest restructuring, announced Jan. 16, half were in its troubled North American Tire unit now headed by former chemical division chief Jonathon Rich.

Over the last three years, Goodyear has cut some 10,000 jobs worldwide, while its share price has dropped from $75 in 1998 to under $7 in early 2003. The day after Goodyear announced its latest round of staff cuts, its share price closed at $6.76, down 10 cents.

Among the job cuts in Akron were 195 positions in Goodyear’s R&D group, about 14% of that unit. Still, Robert Keegan, president and CEO, told Goodyear employees in the company’s internal newsletter that R&D is "absolutely critical" to the company. "Let no one mistake this for a lack of commitment to research and development. This is about focus – on our core technical skills and competencies.

"2003 must be a transformational year for Goodyear and critical steps will be required to get us back on track," Keegan told employees. "We must improve our cost structure, simplify our business processes and operate more efficiently."

Some financial analysts speculated than more cutbacks – even plant closures ®“ will be required to get Goodyear righted. "An awful lot of downsizing that Goodyear has done up until now hasn’t led to higher profitability," said J.P. Morgan Chase’s David Bradley in an Akron Beacon Journal report.

In late December, Standard & Poor’s cut Goodyear’s credit and senior unsecured debt ratings from BB-plus to BB-minus, expressing concern over Goodyear’s high debt and financial outlook. Goodyear officials were disappointed by the downgrade, and said it had a new strategic plan to revitalize the company, which it planned to unveil in February.

Goodyear’s dealer meeting is scheduled for Feb. 9-11 in Orlando, at which time it is expected Keegan and Rich will reveal some elements of the plan.

In speaking to employees the day the layoffs were announced, Keegan tried to rally his troops. "Let’s set a goal to remove the smiles from our competitors’ faces. Goodyear is depending on each associate – not to do more work, but to do the work that matters right now. Listen to your customers. Understand your markets. Build on our competitive advantages. Focus on revenue. Sell our products profitably. Attack the competition. If we do these things efficiently and with a sense of urgency, we will win."

Bridgestone’s BIRD May Be Its Future of Tire Manufacturing

Bridgestone Corp. is now testing a new tire manufacturing system – Bridgestone Innovation Rational Development (BIRD) ®“ it claims is the first to fully automate the tire manufacturing "sequence from the processing of materials to the final inspection of finished tires."

The company said it was refining its BIRD system "under mass production conditions" at a facility in Japan, after which it would install the system at "new and existing" plants worldwide, including North America. No timetable for such an installation, however, was announced.

According to Bridgestone, BIRD can produce multiple sizes of tires simultaneously, allowing small-lot production for "significant improvements in inventory control," and would provide "more latitude in design and improve tire performance."

Merchant’s To Refund Customers in Maryland Consumer Settlement

In a settlement with the Maryland Consumer Protection Division, Manassas, Va.-based Merchant’s Inc. will reimburse thousands of brake and transmission service customers from the last five years who may have paid for filters and brake hardware that were not installed.

The mid-January settlement impacts only the company’s 26 stores in Maryland, and the company denies any wrongdoing. The Maryland attorney general estimates that between 2,000 and 5,000 consumers may have been impacted.

From January 1998 to mid-2001, Maryland consumer officials allege, Merchant’s failed to install new filters when servicing automatic transmissions and didn’t replace some brake hardware during its brake service work. Merchant’s officials said the missing brake hardware included only noise-reducing items like clips and shims.

In the settlement, Merchant’s agreed to reimburse about $60 to customers who purchased brake services and $64 to customers who bought transmission services after January 1998 whose invoices do not show installation of brake hardware or filter.

The company will also pay a $150,000 civil penalty, plus $100,000 for consumer education and $65,000 for the state’s costs and attorneys’ fees.

WTE Registration Open; TIA Wants Nominees for Industry Awards

Registration is now open for TIA’s upcoming World Tire Expo (WTE) in Louisville in March. And the association is now accepting nominations for three prestigious awards.

Those planning to attend the WTE, Mar. 26-29 at the new Kentucky International Convention Center in Louisville, can save up to 50% on registration by registering online at www.WorldTireExpo.org. The online system also allows users to reserve hotel rooms and purchase tickets to WTE special events. Attendees can also register by calling 703-736-8082.

TIA is also accepting nominations for three industry-wide awards that will be presented at the WTE: the Industry Leadership Award, the Pioneer Award and the Friend of the Industry Award. Nominations may be made by calling TIA at 800-876-8372.

Expo attendees can also set VIP buying hour appointments online. The VIP times are designed to allow for exclusive one-on-one time with exhibiting companies and early access to the exhibit hall. Scheduling is conducted on the WTE’s Web site.

Besides the trade show and seminars, the expo will feature three special events: the Rubber Ball on Thurs., Mar. 27 at the Louisville Slugger Museum; the Industry Recognition Dinner on Fri., Mar. 28 at the Seelbach Hilton; and the TIA Foundation Golf Tournament, Wed., Mar. 26 at the Quail Chase Golf Club.

The WTE, focused on commercial tires, retreading and tire and rubber recycling, will include more than 25 educational seminar sessions. Details and schedules are available online.

TIA Forms Solid ‘Foundation’ for Development of Programs

The Tire Industry Association (TIA) created the TIA Foundation to develop new education and training programs for tire industry professionals. The foundation was initially funded by the transfer of assets from the trust of the former Tire Association of North America and by gifts from a number of tire industry firms.

Donating a total of $284,5000 to the foundation were ASA Tire Systems, Bandag, Carlisle, Continental, Cooper, Goodyear, Michelin, Sure Tire, TBC, Toyo, Treadways and Yokohama. The transfer gave the new foundation another $625,000 in assets.

"This foundation and the successful fund-raising represent a real opportunity for TIA," said former TIA President Steve Disney. "The education and training programs developed, as well as those offered by TIA will serve our industry and the public greatly."

TIA said one particular focus of the foundation will be training programs that help businesses comply with government regulations and laws (including the TREAD Act), lower their liability, and train their employees in critical tasks.

J.D. Power Study Finds Consumers More Interested in Safety

While creature comforts might be nice when driving, a new J.D Power and Associates study shows consumers are more interested in safety features.

Its 2002 U.S. Automotive Emerging Technologies Study, released in December, says nine of the top 10 most-desired features have to do with safety, and a tire pressure monitoring system was listed as the most popular of the 25 features measured.

"Given the high level of interest U.S. consumers also had with run-flat tires, it is clear that they have concerns about the safety of their tires," said Jeremy Bowler, a research manager with J.D. Power & Associates.

Other safety features scoring high included anti-whiplash seats, vehicle stability control, adaptive cruise control, and a night vision system that uses infrared technology to help drivers see in the dark.

Of the non-safety features measured, the study found most consumers interested in digital surround sound systems and driver-recognition systems.

New TREAD Act Power Lets NHTSA Push For Faster Recalls, Remedies

As part of the still evolving TREAD Act, NHTSA added new rules allowing it to accelerate vehicle safety-related defect remedies – including product recalls. The new regulations, which went into effect Jan. 6, permit NHTSA to force automakers, tire companies and vehicle equipment manufacturers to speed up recall and replacement of products that pose a safety risk, either because they are found to be defective or not in compliance with existing safety standards.

NHTSA said it would impose this requirement if there is a risk of injury or death if a recall program is not accelerated, or when such a recall program could be achieved faster by expanding the number of sources for replacement products and/or the number of authorized replacement facilities.

Ray Carr Tire Shuts Down, Begins Selling Off Closed Stores

Ray Carr Tires Inc., one of the industry’s leading retreaders and tire retailers, abruptly closed up shop last November and has sold off most of its operations.

The Harrisonburg, Va., dealer and retreader, began unloading parts of its operations after efforts to turn the financially troubled operations faltered. Since it shutdown operations, four Ray Carr Tires retail stores have been sold to other dealers or parties and re-opened, and the remaining three have been shuttered.

Bids have reportedly been received for its retreading plant in Harrisonburg, but there was no word whether it would be sold.

Ray Carr, which reportedly plans to expand its wholesale tire business, sold its Staunton, Va., store to Pamlico Corp., two stores in Harrisonburg and Charlottesville, Va., to Magnolia Enterprises, and its York, Pa., store to McCarthy Tires of Wilkes-Barre, Pa.

Cooper’s Pat Rooney Dies

Retired Cooper Tire & Rubber Co. chairman and tire industry hall of famer Pat Rooney, 67, died Dec. 18 at his home in Findlay, Ohio, after a brief illness.

Well respected throughout the tire industry, Rooney retired from Cooper in June 2000 after a 44-year career with the firm. He joined Cooper in 1956 as a sales trainee, was named territory sales representative in 1958 before becoming tread rubber sales manager in 1960.

In 1965, Rooney became Cooper brand general sales manager, and was elevated to vice president four years later. In 1984, Rooney was tapped to lead Cooper’s sales efforts, and was named vice president of marketing in 1987.

In 1990, Rooney was elected president of Cooper Tire and became a member of the board of directors. He was named president and COO of the corporation in 1991, and was elevated to chairman, president and CEO in 1994.

Elected to the Tire Industry Association Hall of Fame in 2000, Rooney is survived by his wife, Sondra, and four grown children. Memorials can be made to the Patrick Rooney Scholarship Fund at The University of Findlay, 1000 North Main St., Findlay, OH 45840.

TIA Announces Truck Tire ‘Training Tour’ Dates Across U.S.

The Tire Industry Association’s (TIA) first Certified Commercial Tire Service (CTS) "training tour" will bring training and certification to technicians who otherwise couldn’t receive it.

Starting Feb. 4, in Akron and ending Apr. 11, in Sacramento, the tour will feature two-day seminars in 20 different cities. The two-day format allows dealers to take half their employees the first day and the other half on the next.

The program covers OSHA Standard 29 CFR 1910.177, manufacturer guidelines and industry recommended practices for servicing truck tires and wheels. Topics include tire construction, OSHA regs, zipper rupture inspection procedures and more.

"This training is critical for all employees in commercial tire businesses," TIA President Tom Raben said. "OSHA regulations require documented training for any employee who handles inflated truck tires and wheels, regardless of their level of experience. This course certifies that the OSHA-mandated training has taken place."

TIA will charge a flat-rate fee, regardless of membership status. The cost is $250 for each attende e who doesn’t have a CTS manual and $175 for those that do. Students completing the course will receive a TIA certificate, uniform emblems and a two-year subscription to Commercial Tire Service Today.

Meineke Eyeing Closed Penske Stores

Meineke Discount Muffler Shops has reportedly put together a second proposal to take over about 20 Penske Auto Care Centers located in Kmart stores.

According to news reports, Meineke first approached Kmart in April 2002 after Penske had closed its 563 tire and service centers, but talks disintegrated after a few months only to be revived in late 2002.

Kmart officials admitted having some discussions with a Meineke franchisee and other parties, according to news reports, but declined further comment. Meineke officials, reports said, were willing to take a chance on the locations despite Kmart’s dismal financial situation. Bankrupt Kmart closed 283 stores in March 2002, and announced plans Jan. 14 to shutter 326 more.

 

Of Note

·Bridgestone Corp.’s new $136 million tire plant in Thailand, its third in that country, will open in the second half of 2004 with an initial capacity of 2,500 truck/bus radials per day which will be exported to the Americas, Europe, Asia, the Middle East and Africa.

·FBI arrested a former Florida Wingfoot Commercial Systems Center manager in late November on charges of money laundering and mail fraud, alleging he swindled Goodyear out of $1.5 million.

·Yokohama Rubber Co. has joined the support ring run-flat system partnership between Bridgestone Corp. and Continental AG.

·American Tire Distributors will open a new distribution center in Des Moines next month, and will move its operations in Mobile, Ala., and Springfield, Mo., to larger quarters later this year.

·The first generation of i-Shop-enabled service shop equipment and software was released, said AAIA, which helped develop the unified software standards.

·Goodyear laid off 460 more employees from its Union City, Tenn., tire plant Jan. 20; the company cut 450 jobs there in October.

·Michelin will supply retreaded truck tires and tire service to Alabama Power.

·The 18th annual Clemson Tire Industry Conference will be held Feb. 26-28 at the Hilton Head Crowne Plaza. Call 864-656-2200 to register.

·Arnco – Barry Craft was named national accounts manager.

·Bridgestone Americas Holding – Shu Ishibashi, president of its North American consumer tire group, accepted an assignment with Bridgestone Corp.

·Carefree Tire – Named Norman Smyth as marketing manager.

·Continental AG – Named Martien de Louw as executive board member responsible for global passenger tire division.

·Del-Nat Corp. – Aaron Murphy was named vice president of commercial products.

·Falken Tire Corp. – Promoted Leslie Heine to manager of advertising and corporate communications.

·Galaxy Tire & Wheel – Michael Foxhoven named national aftermarket sales manager.

·Goodyear Dunlop – Diane Zwirecki was named communications manager.

·Goodyear – Named Michael Pulte manager of extreme performance ®ƒ Peter Christofferson named commercial tire systems general manager ®ƒ Keith Kramer named vice president of OE sales.

·Pirelli Tire North America – Appointed Peter Tyson to vice president of marketing communications and Tim Tanner to director of trade advertising.

·Tech International – Robert Overs was promoted to COO ®ƒ Les Mawson named general operations manager for North American operations ®ƒ Appointed Kim Hansen to CFO.

·Sumitomo Rubber Industries will absorb those portions of its Ohtsu Tire & Rubber Co. and Dunlop Japan subsidiaries it does not already control.

·NHTSA will begin performance testing medium truck tire retreads against new tires this year, despite concerns by TIA that the agency’s test parameters are too rigid.

·A major downturn in telecommunications dropped Pirelli SpA some $360 million into the red, forcing the company to close six cable plants and cut nearly 2,400 workers.

·In its November issue, Consumer Reports rated the Dunlop SP Sport A2 as best in performance tests of H-rated tires.

·Zisser Tire Wholesale, headquartered in St. Louis, is now the "exclusive agent" for Wanli S-1099 17- to 20-inch performance tires, and is actively looking for distributors for container-load direct shipments.

·Hercules Tire & Rubber Co. added the Trelleborg line of industrial tires to its product offerings.

·RMA will hold its annual meeting Feb. 22-24 at the Westin Mission Hills Resort in Rancho Mirage, Calif.

·The Brake Effectiveness Evaluation Procedure (BEEP), a new industry-wide guideline for brake pad and shoe performance based on established OE criteria, was launched by the Brake Manufacturers Council.

·Parts Plus named Raybestos as its 2002 Vendor of the Year.

·Some employees of Bridgestone Americas Holding-owned Morgan Tire & Auto are suing the tiremaker in federal court, claiming overtime pay should include sales commissions normally treated as part of their regular pay.

·NHTSA closed out its investigation of Michelin-produced Phantom brand tires recalled in mid-2002.

·RMA added 10 new members recently, including Trelleborg Wheel Systems.

·SmarTire and Visteon Corp. struck an agreement that will market SmarTire’s TPMS to automakers for OE fitment.

·Pro-Cut International received awards from General Motors Dealer Equipment Services and Snap-on’s Equipment Solutions units.

·O.K. Tire Stores plans to open new warehouses in Quebec and Ontario this year to support its expansion into eastern Canada.

·Dynamic Tire opened a new 60,000-square-foot distribution center in Memphis to service its Primex brand customers.

·Michelin is raising prices on its commercial tires by an average of 4.5%, and on its retreading products by an average of 3.75%, effective Feb. 1.

·LeTourneau’s new L-2350, touted as the world’s largest front-end loader, sports specially designed 70/70-57 Firestone Super Rock Grip Deep Tread tires; weighing eight tons and nearly 13 feet tall, each tire takes some 41 hours to build and cure.