The company said it will drive profitable growth by capitalizing on worldwide tire demand increases, particularly in emerging markets of Latin America, Eastern Europe and Asia.
Toward that end, the tiremaker said it would spend some $1.8 billion to $2 billion to upgrade its worldwide tire plants – including $500 million for U.S. facilities and another $500 million to build a new plant in China – while shuttering its tire plant in Somerton, Australia. Additionally, Goodyear increased its cost-cutting target to $2 billion by 2009.
“Given the challenges that the macro-environment is presenting, particularly in North America, we are performing well in a difficult environment,” said Chairman and CEO Bob Keegan. “Our business changes over the past five years have positioned us to manage through the current environment while continuing to drive our long-term strategies.”
Specific expansion projects have already been set for Goodyear plants in Danville, Va., and Napanee, Ont., while others are expected soon. In China, Goodyear will relocate its current plant in Dalian to an all-new plant in that city. The current plant is landlocked and cannot be expanded. The new facility will be completed in 2010, with complete transfer of production set for 2012.
Keegan said Goodyear will make capital investments of $1 billion and $1.3 billion per year from 2008 to 2010.
The company said it will increase high-value tire capacity by 50% from 2006 levels and increase its low-cost capacity to 50% of its worldwide total by 2012.
$31M Cooper Expansion in Mexico
Cooper Tire & Rubber Co. is building its presence in Mexico, striking a deal to partner in a capacity expansion project at that country’s second largest tire plant.
In the deal, Cooper will invest $31 million for a 38% stake in the project, which will increase production capacity at the Corporacion de Occidente passenger radial plant in Guadalajera.
Cooper already has a business relationship with Corporacion de Occidente, having formed a 50/50 joint sales and marketing venture with the employee-owned firm in October 2007 to handle Cooper and Pneustone brands in that country.
Cooper said that trading operation will continue to operate separately, but the new investment deal will replace an existing off-take production agreement between Cooper and Corporacion de Occidente.
Corporacion de Occidente currently produces 2.4 million passenger radial tires per year. The planned expansion will bring that capacity to an estimated 4.6 million by year-end 2010, and 6.0 million units during 2011.
Not Going in Circles
The Pirelli-supported Grand-Am Rolex Sports Car Series hit the Mid-Ohio Sports Car Course near Columbus, Ohio, in June. As with all forms of motor racing, such events give tire companies the opportunity to entertain customers and special guests, as well as show off their racing mettle.
Pirelli certainly took advantage of the opportunity, bringing in key dealers, including Discount Tire managers and staff. The paddock was brimming with Pirelli racing tires, and a vast awning emblazoned with the company’s signature yellow-and-red logo covered area that fascinated curious onlookers. Near the start-finish line, Pirelli’s hospitality area welcomed VIP guests, which the Rome, Ga., tiremaker used to show its appreciation for members of their dealer network. Needless to say, Pirelli won on the track and with its customers.
20 Years On, ACCC Undertakes Complete ‘Re-Imaging’
American Car Care Centers is celebrating its 20th anniversary this year, but is passing on cake and candles in favor of a more substantial centerpiece – a nearly total re-imaging.
Part of the re-imaging – a modernized representation of ACCC’s familiar eagle – can be seen in the advertisements ACCC has been running in Tire Review, but ACCC marketing director Jeremy Lewin said the effort will encompass virtually all aspects of the marketing group’s look and feel.
“We wanted to define what our forward-facing image was going to be,” Lewin said of the changes, which will impact everything from ACCC’s ads to its dealer support materials, Web site, store showroom system and signage, POS materials, wearables and more.
In addition, Lewin is looking to add “new and exciting” products to the ACCC mix, including a “certified dealer program,” an online marketing toolbox, an interactive marketing calendar for dealers, upgrades to existing warranty programs and other yet undetermined projects.
The goal, said Lewin, is to “make the ACCC concept more accessible to consumers,” thereby bringing more business opportunities to ACCC retailers and member distributors.
The new-look materials will be rolled out as they are readied, he said, with all aspects of the re-imaging expected to be in place in 2009.
Tire Valve Failures Spur NHTSA Inquiry, Recalls
What happens when an invaluable part of tire/wheel assemblies may be defective, but no one really knows how many are bad, where they are or what caused the problem?
That seems to be the case as NHTSA and some North American tire valve distributors try to recall potentially millions of allegedly defected rubber valve stems produced in China.
What is known is that the stems in question may crack “prematurely” and appear to have been installed on consumer vehicles between September 2006 and June 2007.
One distributor – Tech International – initiated a recall of some six million TR413, TR413CH, TR414, TR415, TR418 and TR423 stems it bought from Shanghai Baolong Industries Co. in 2006. Tech said the rubber portion of the valve stem may crack and permit the gradual loss of tire pressure.
The company said it would replace the valve stems with non-defective models free of charge, and any tires that have sustained structural damage as a result.
But the chief problem is that Tech has no way of knowing who bought the valve stems in question or how many were actually installed on vehicles.
In its response to NHTSA, Tech wrote, "Tech International does not know the identity of any end-users of the TR413 valves and has no realistic method of determining the identity of such individuals. Furthermore, there is no realistic method for Tech International to identify the production dates of any specific TR413 valves.”
Another 30 million of the stems in question were produced by Shanghai Baolong subsidiary Topseal, according to NHTSA, but at press time no formal recall was announced.
In May, Dill issued a technical bulletin recommending that retailers check customers’ tires and valve stems for those sold and installed between September 2006 and June 2007.
Other valve stem distributors are said to be checking their products. NHTSA said the extent of the problem won’t be known until the agency completes its investigation.
Growing Bigger and Bigger
JohnDow Industries recently completed a 68,000-square-foot expansion of its warehouse at its Barberton, Ohio, headquarters. The $1.5 million project doubled the JDI warehouse to 121,000 square feet of space. According to JDI President Joe Dease, double-digit growth “created a need to expand our capabilities to better serve our customers and allow for future growth.” It also supports JDI’s “Brands to Build On” marketing campaign, in which the company is educating the industry on its five product lines and extensive offerings for all types of automotive service facilities. Said Mark Pfleeger, vice president of sales, “We are growing, excited and very optimistic about our future.”
Icon Sees New Way to Measure Depth
A new private label tire company based in Oregon has launched its first product, one with an interesting twist.
Icon Tire’s new I/Q LT7 line features Visual Tire Performance Indicators (VTPI), stud-like devices designed to help drivers see when a tire has worn to its removal mileage.
Icon said the new tires will be available to dealers and retailers by the end of this year. Initially there will be 12 sizes, Icon said, focused on minivans and SUVs.
Icon said VTPIs are inserted like a standard winter tire stud, and can be inserted to any tread depth that a tiremaker establishes as appropriate for that tire model, Icon said.
With its I/Q LT7 line, the installed VTPIs will show a yellow color when the tread has worn to 5/32-inch, warning drivers that the tire’s “wet weather traction and performance has been diminished.” When the tread depth hits 3/32-inch, the VTPIs will show white, “signaling that tires should be replaced immediately,” Icon said.
Portland-based Icon has its tires produced by unnamed tiremakers in China.
For more information, go to www.icontire.com or call 503-293-3515.
Drop the ‘Interim’: Cannon Takes Post
Charles Cannon was officially named president and CEO of RMA, a role he has held on an interim basis since the sudden departure of long-time head Don Shea in February.
Cannon once served on the staff of the House Appropriations Committee, followed by several years with United Technologies.
He has managed Cannon Consultants Inc. for the last 20 years.
