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ATD Response Brings More Questions than Answers | Patti Renner

Since the news broke last week regarding the joint venture distribution partnership between Bridgestone and Goodyear creating TireHub, Tire Review editor Patti Renner has more questions than answers.

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American Tire Distributors ATD

Few can argue that ATD provides a service to tire dealers across the country. Many have converted tire storage space into other uses since the amount of storage is no longer needed, thanks to the convenience and economies of just-in-time delivery, for which ATD is so well known. While many regional distributors also do an excellent job, ATD moves a lot of tires. Putting opinions on past acquisition strategies and business practices aside, they’ve made it easier for dealers to do business.

Since the news broke last week regarding the joint venture distribution partnership between Bridgestone Tire Americas and Goodyear Tire & Rubber Co. creating TireHub, Tire Review has made repeated requests to the folks at American Tire Distributors (ATD) for interviews or comments regarding the announcement, especially its implication that ATD will soon be replaced as a Goodyear national distributor in favor of TireHub once the organization is up and running. Each day, their PR team politely responds with regret, that they will be in touch when they are prepared to make an official comment. And each day, I update my long list of questions that I have, in hopes of maintaining balanced coverage about the news and its implications.

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But the good news is that instead of going to the media or emailing answers to our long list of questions, ATD CEO Stuart Schuette finally did communicate with his dealers, releasing the following open statement at the end of business Friday, sent directly to ATD customers and Tire Pros dealers:

Dear Valued ATD/Tire Pros Customer,

For the last 80 years, ATD has been a participant in the tire industry focused on serving you, our valued customers. We are all experiencing the rapid changes to the competitive landscape in the tire industry.

As of yesterday, we have been notified that we will no longer be a Goodyear distributor going forward, although a specific timetable to eliminate access has not been established. Unfortunately, Goodyear has chosen to force this transition upon all of us, but we’ll work closely with you to manage the impacts. 

Inevitably, this all comes down to choices made in times of change. Goodyear is choosing to limit how its customers can purchase and obtain its products. We are disappointed by Goodyear’s choice, given the investment ATD has made in building the Goodyear family of brands, and supporting its products, over the last decade and the effect it will have on all of you.  

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ATD is making choices too. We’re choosing to keep the power of choice alive for our customers – many of whom are independent dealers. Most importantly, we are choosing to keep our commitment to providing the best service and selection for customers. Through the decades, that commitment has proven to us that an investment in our customer’s business brings success in equal measure for all of us.

There is a solid strategy underway that is built around you. We have innovative initiatives to be unveiled later this year that will demonstrate how we are leading change in our industry – all of which is motivated by a desire to drive value for your business and help you succeed regardless of the market climate.  

ATD has the backing of an experienced leadership team and committed stakeholders – they are totally united in our strategy and growth plan. We are unique in this industry, as we can offer an incredibly diverse product offering supported by a world-class supply chain. We continue to have great relationships with our ongoing vendors and manufacturing partners, both in North America and globally. 

While the new landscape may present you with fewer choices, we look forward to working closely with you to lessen the impact of the challenges you face. ATD is financially solid and we are both clear and confident in the focus of our business and the innovative strategy we have in process. We look forward to another 80 years of service to you.

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Thank you for your partnership. We are excited about what we’ll accomplish, together, in the year ahead.

Sincerely, 

Stuart Schuette, President – CEO

Three days after the initial Bridgestone-Goodyear announcement was made, remarks from Schuette now raise more questions than they answer.

Did ATD see it coming? The fact that Schuette says there is a “solid strategy underway that is built around you” to be revealed later this year implies that the news was unexpected, that the loss of one of their largest product lines – Goodyear – may have come as a surprise. These are smart people at ATD. Seems to me that some sort of plan or transition strategy would already have been in place, and the sharable details and talking points about it locked down well in advance. Instead, they appear to be scrambling. Ironic that “American” ATD would lose access to products from the largest American-headquartered tiremaker.

When we asked Goodyear about any early conversations with distributors to minimize the impact of the TireHub deal on the existing network (of which ATD plays a major role), the response was a basically a non-response, deflecting the inquiry due to non-disclosure agreements and internal policies preventing them from speaking about specific customer accounts.

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Is Goodyear the only one to blame? Schuette seems to be pointing a finger, saying that “Goodyear has chosen to force this transition upon all of us…. Goodyear is choosing to limit how its customers can purchase and obtain its products….” As the saying goes, for each finger pointed, the other four point back at you. Did ATD sour the relationship over the years by refusing to carry the full product line for each tiremaker? Did they make it harder – or more expensive – for dealers in some way? Did they try to offer too many lines at the expense of key accounts? Is karma at play here for the way the massive distributor went about its growth and acquisition strategies in the past?

How will ATD pivot from all of this? With most of the Tier One brands out of their mix – and soon out of their mixing warehouses – do they double down on Continental? Cooper? Others? And if they do join into more exclusive distribution partnerships in response to this, do they learn from past relationship mistakes and carry the full product lines of fewer providers instead of cherry-picking inventory across many?

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The real question is how this will impact dealers. If programs, points and back-end dollars are only available through manufacturer-owned distributors, how does that change your go-to-market strategies? If TireHub doesn’t figure out local distribution with their aligned partners – and lack the same level of service and frequency as ATD provided – does that change the recommendation at the counter since the customer needs the product and doesn’t want to wait?

The final question falls to the U.S. Federal Trade Commission. Will they approve the deal? And if they do or if they don’t, we’ll see if ATD is still out as a Goodyear distributor or if it’s business as usual.

Final thought: What can tire dealers expect as the landscape continues to change? Stay tuned.

 

 

 

 

 

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