Welcome to the New World - Tire Review Magazine

Welcome to the New World

I about chucked by Blackberry yesterday, what with its constant flow of bad, worse and worser news about the economy and the world financial markets.

The bailout plan – such as it was – fell to pieces as our equally unstable Congress fell out of line and voted down the $700 billion measure that experts said was needed to shore up our financial markets.

Voters apparently voted with their emails and phone calls, decrying the perceived move toward a socialist economy. And while I am no expert, what I do know is that the free market didn’t get the job done, Congress and the Administration faked oversight and the whole house of cards came tumbling down.

Meanwhile, we’re living a historic moment, on par with the Great Depression (though experts say we won’t repeat that chapter again…we’ll see) with a series of shotgun marriages between teetering banks and supposedly bullet-proof financial institutions, other major financial houses on the critical list, and the stock market posting its biggest single day downer in history.

Bottom line in all of this? We’re all going to take a hit.

Goodyear went to the bank the other day to draw down on its credit card after it was denied access to $360 million in cash it had invested in the “troubled” Reserve Primary Fund thanks to an SEC order.

Reserve Primary was hit by a $785 million investment in commercial paper issued by the now bankrupt Lehman Brothers.

Other tiremakers around the globe will find their financial footing a bit soft. Even Michelin, which is said to be in the best cash position, may not be immune. And, the Schaeffler deal for Continental may splinter if the family-owned company sees its cash reserves at stake.

The European financial community is not at all immune, either.

Bloomberg reported last week that Business confidence in Europe’s three largest economies – the Italy, Germany and France – declined more than forecast this month, thanks to the U.S. crisis. Of course, Europe is going through its own version of our downturn, with auto sales and trucking tanking over there, pushing down tire and component sales, boosting consumer prices and forcing a tighter credit market.

The credit crunch is the near-term issue here, especially for small biz, which may see easy access to short-term loans to cover business expenses stifled by weary banks. Call your banker now and see if you can even get a loan….any loan, for any reason.

Consumers will feel the crunch, too, with car and housing loan options drying up faster than fresh paint on a hot day. Not too many people sitting on $30K for a new ride, or even $600 for new rubber. Credit cards may become as worthless as the plastic they’re printed on. And with personal investments standing to take a “Don’t Worry, We’ll Just Take Later Retirement” hit, consumers may be more inclined to take their chances with Texas Hold ‘Em that sit on what’s left of their nest egg.

And let’s not forget that this “strong headwind” may break wind into massive lob losses as one company after another is forced to close down due to squeezed credit and lost business.

Let’s all hope it doesn’t get there.

If you have comments to share, send to me at [email protected].

– Jim Smith

You May Also Like

Continental’s ContiConnect Lite to allow digital tire management for OTR tires

Continental said ContiConnect Lite helps fleet managers monitor the condition of their tires via bluetooth.

ContiConnect-Lite-OTR

Continental launched ContiConnect Lite, a new version of its digital tire management app, which the company said creates a bridge between tire sensors and professional tire management and offers a free-of-charge gateway to selected ContiConnect features. Continental said it can also now be used on tires with an integrated Gen2 sensor. Since this year, Continental has been delivering its off-the-road (OTR) radial tires with a bluetooth-enabled sensor. In addition to OTR tires, Continental said it also offers digital tire management to its truck tire customers.

Hana Technologies signs license agreement with Michelin for RFID tire tags

Since its inception, Hana Technologies has spearheaded the manufacturing of over 150 million RFID tire tags.

Handshake agreement
Continental debuts new sustainably-focused U.S. headquarters in South Carolina

The building’s 840 solar panels are capable of offsetting up to 25% of its total energy consumption.

Front-of-Continental-Americas-HQ-1400
Yokohama Rubber reveals 2024 motorsports activity plan

Yokohama said participation in motorsports activities is crucial to its efforts to strengthen the Advan and GeoLandar brands.

Yokohama-Nitrocross
Tesla Model 3 TPMS service

Resetting and programming TPMS sensors for a Tesla is a lot like any other vehicle, and the challenge is still the same: keeping the light off.

bendpakEVgarageTPMS-1400

Other Posts

TIA’s Advanced Farm Tire Service training to take place in June

The training class for technicians in the agricultural and farm tire industries is set to take place June 11-14.

TIA_training-
Three spark plug service and replacement tips

How to avoid and overcome roadblocks that may come up during the removal or installation of spark plugs.

Continental-sparkplug
Maxxis-sponsored athletes make podium, overall top 10 at Mint 400

Maxxis athletes Michael McFayden, Ethan Ebert and Trey Gibbs had podium finishes at the Mint 400 on Maxxis RAZR XT tires.

2024-mint400-maxxis
Sun Auto Tire reveals winner of Ford Bronco Sport giveaway

Lowell Anderson entered the giveaway at his local Sun Auto Tire & Service store while receiving a routine oil change.

Sun-Auto-Bronco-giveaway