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Troubled Goodyear N.A. Unit Gets Rich

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ions, including a complete restructuring and increases in earnings and cash flow, according to the tiremaker.

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The Des Moines native has a tough task ahead of him as head of Goodyear’s largest division – increase sales, stabilize and grow marketshare, make a sizeable contribution to corporate profit, and improve relations with Goodyear’s dealer network.

In statements to Akron media, Rich said he will focus on building new business, cutting costs and improving fill rates. He also said that every cost would be scrutinized with an eye toward improving the unit’s bottom line.

Goodyear officials said Polhemus did not leave due to performance reasons. Many in the industry said Polhemus made a lot of inroads in the 30 months since he took over for Bill Sharp, who retired in July 2000 just over a year after he was named president.

Tiremakers Going to Battle Against Proposed IRS Rule to Tax Tires

A battle is brewing in Washington over an IRS proposal that would create new classes of off-highway vehicles, subjecting tires for that equipment to federal excise taxes. According to the Rubber Manufacturers Association (RMA), the proposed rule "narrows the definition of ‘mobile machinery’ allowing for heavy equipment such as mobile cranes, mobile drilling units and concrete pumpers to be subject to substantial new taxes where currently they are exempt."

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RMA said that a decision on the IRS proposal is not due until early next year. In addition to end-users, tiremakers would also face paying excise taxes on the heavy-duty tires currently fitted on the vehicles.

In an effort to defeat the proposed IRS rule, RMA has joined the Mobile Machinery Caucus and is seeking Congressional support.

The Caucus argues that such heavy-duty equipment makes minimal use of the highways and spends most of its time off-road. Most of this equipment is transported between job sites on highway vehicles that are already subject to an excise tax.

RMA says that taxing such tires "is unfair and wrong."

OTR Conference Registration Open; Keynote Addresses and Events Set

Registration is open for TIA’s upcoming OTR Tire Conference, scheduled for Feb. 20-22, 2003, at the Pointe South Mountain Resort in Phoenix. The 2003 event will feature keynote addresses by Manny Cicero, president of Bridgestone/Firestone Off-Road Tire Co., and Oren Harari, renowned business and management author.

Panel discussions featuring successful OTR dealers and on new technologies in two-piece tire assemblies are also planned.

The schedule also includes a review of OTR industry trends, a discussion of out-of-service conditions, an update on enforcement by the Mine, Safety and Health Administration, and a seminar on advancements in tire inflation equipment.

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Those interested in attending the conference can register by calling TIA at 800-876-8372 or 703-736-8082.

Galaxy Expands Relationship With Yugoslavian Tire Producer

Galaxy Tire & Wheel Inc., the Malden, Mass.-based manufacturer and marketer of industrial, agricultural and OTR tires, has signed a five-year off-take and technology sharing agreement with Yugoslavian tiremaker Trayal Corp.

The $27.5 million deal calls for Trayal to produce Galaxy and Constellation brand skid-steer and industrial tires, and aid in the development of a line of radial OTR tires. The planned OTR line will target intermodal and material handling equipment, and will replace Galaxy’s current ML-1 and ML-4 lines, the company said.

Galaxy and Trayal, which have worked together since 1996, also plan to jointly develop a line of radial special trailer tires. The first sizes to be produced will be 215/75R17.5 and 235/75×17.5, and Galaxy, through its Redco wheel division, will market the complete tire/wheel assemblies to trailer manufacturers once the tire is available in 2003.

 

‘Firestone’ Out in Latest BFS, er, Bridgestone Name Change

What’s in a name? When it comes to Bridgestone/Firestone Americas Holding, not much – at least in terms of time. One year and three days after it changed its corporate name from Bridgestone/Firestone Inc. to Bridgestone/Firestone Americas Holding Inc., the company said it was changing its name again, this time to Bridgestone Americas Holding Inc.

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It is the first time ever that "Firestone" will not be part of the company’s name. Bridgestone Corp. bought out Firestone Tire & Rubber Co. in 1988, and combined Firestone with its own Bridgestone (USA) Inc. operations to form Bridgestone/Firestone Inc. in 1989. In addition, the name of Bridgestone’s European operations was changed to Bridgestone Europe SA.

Bridgestone Corp., which announced the changes at the end of a news release detailing its revised 2002 financial forecast, said the move was made "to build a strong, high performance corporate identity under the Bridgestone name, while allowing the businesses to build strong brand identities for their products under, primarily, the Bridgestone and Firestone names."

The name changes are effective Jan. 1. There was no word if the renamed company would also change the name of its operating units – including Bridgestone/Firestone North America Tire ®“ to reflect the revised corporate moniker.

TIA Plans Expansive Training Program For Passenger/LT Tire Techs

Expanding its dealer training and education program, TIA is launching a new effort targeting passenger and light truck/SUV tire service. Automotive Tire Service (ATS), unveiled at the recent International Tire Expo, will include two parts, one focused on tire service basics – mount/demount, nail hole repair, etc. ®“ and a second covering vehicle dynamics and tire problem diagnosis.

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The program may later include a certification program, similar to the highly successful Commercial Tire Service training program launched by the former ITRA and now run by TIA. Since its inception, the CTS program has certified more than 800 trainers and over 8,000 commercial tire technicians.

A number of details, including program costs and a launch date, have yet to be determined, but the program will be open to both members and non-members alike.

The ATS program will be offered with classes at TIA’s training center in Louisville, as a self-study video program and via the Internet.

Five More Announce Tire and Tread Stock Prices Hikes for the New Year

Continental Tire North America, Firestone Agricultural Tire, Toyo Tire, Titan and Bandag all announced prices increases. CTNA took a 5% increase on all branded and private brand passenger and light truck/SUV lines effective Dec. 1. Firestone Agricultural will increase prices on all Firestone brand ag, industrial and forestry tires by 2% to 5% effective Feb. 1.

Toyo is hiking prices on most of its passenger, light truck/SUV and medium truck tires by 3% to 5%, and on its OTR tires by 1% to 2%, effective Jan. 1. Titan plans to selectively increase prices 3% to 7% on its ag, industrial and OTR lines as of Jan. 1. Bandag said it is increasing tread rubber prices by 3% in the U.S. and 5% in Canada as of Jan. 1.

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Tire Labeling Regs Issued; Consumers Get More Tire Care and Inflation Info

Tire dealers and tire buyers will soon be better able to properly inflate tires and easily identify recalled tires, thanks to TREAD Act-mandated regulations finalized by NHTSA in mid-November. The new tire labeling rules were generally hailed by both the Rubber Manufacturers Association (RMA) and the Tire Industry Association (TIA), though TIA still expressed concern over the impact the regulations may have on retreaders.

The new labeling information requires tire identification numbers be on both sidewalls of a tire, and the consistent placement of easier-to-understand tire pressure information.

"This is a terrific remedy for the often-confusing information now on tires," said NHTSA Administrator Dr. Jeffrey Runge. "In the end, well-maintained tires will provide consumers with a greater margin of safety."

Compromise was more like it as the tire industry’s input was well evident in the final regs. NHTSA’s first pass at tire labeling was widely panned in the industry, though some saw value in having tire identification numbers (TIN) on both sidewalls. NHTSA said while formulating its final rules it conducted "extensive consumer research" and even visited a tire plant to gather information.

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While the TIN, which notes the tire brand and model as well as the date, time and place of manufacture, must be shown on both sides of a tire, the date code need only appear on one side, eliminating a major RMA and TIA concern over tire and retread plant worker safety. To increase readability, all characters in the TIN must be at least one-quarter inch tall.

Information regarding a tire’s ply rating and materials used, as well as its maximum inflation pressure, will remain on the sidewall. And automakers will be required to include more tire safety and proper inflation information in vehicle owner’s manuals.

In addition, a placard containing inflation pressure levels (as set by the vehicle maker) and load limits must be mounted on a vehicle’s "B-pillar" (if present) or inside the driver’s door jamb. The placard must be printed in a pre-defined format with inflation pressures printed in red, yellow and black on a white background.

The new ruling covers all passenger vehicles with a GVW of 10,000 pounds or less, as well as retreaders that produce retreaded tires for such vehicles manufactured after 1975. The tire inflation label requirements go into effect for all vehicles produced after Sept. 1, 2003, while the TIN changes will be phased in over three years. NHTSA said that 40% of all tires produced between Sept. 1, 2004 and Aug. 31, 2005, and 70% of those produced between Sept. 1, 2005 and Aug. 31, 2006, must feature the new TINs, after which all subject tires must include dual TINs.

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While RMA was pleased with the TIN compromise, TIA expressed concern that requiring TINs on both sidewalls of retreaded light duty tires would place an undue financial and safety burden on retreaders.

Second National Tire Safety Week Set; Dealers Urged to Participate

The second annual National Tire Safety Week, sponsored by the Rubber Manufacturers Association (RMA), is slated for Apr. 27-May 3, 2003. RMA has already lined up more than 100 tire dealers to promote the program, designed to help educate consumers on the importance of proper tire maintenance – and drive consumers to tire dealers.

Search Begins: Kogel leaving TIA to become dealer

After nearly three years at the helm, guiding the Tire Industry Association through major rebuilding and the merger of TANA and ITRA, Ross Kogel Jr. resigned his post as executive vice president. Kogel plans to relocate to Michigan with his wife and young son to be closer to his family.

Kogel’s resignation is effective Feb. 1, the end of his contract. TIA President Tom Raben appointed a search committee to begin looking for Kogel’s successor.

Kogel plans to join his father Ross Sr.’s successful Troy, Mich.-based Tire Wholesalers Co. He and his wife, Katherine, are parents of a year-old son.

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Kogel joined the then TANA staff in 1997, eventually serving as marketing director. When Poisson left TANA in February 2000 to pursue a career in private industry, Kogel was named interim executive vice president. After a lengthy and exhaustive search, TANA removed "interim" from Kogel’s title in October 2000.

Bureau seeks help with economic census

The U.S. Census Bureau is conducting the 2002 Economic Census, sending data collection forms to over five million U.S. businesses this month. Compliance with the program is mandated by law, reminds the Census Bureau, and the easy-to-complete forms are due Feb. 12, 2003.

The Economic Census, conducted every five years, provides valuable data used by economists, the media, every level of government and by other businesses. For more information, go to www.census.gov/econ2002, or call 1-877-790-1876.

New attendance record, programs make ITE a success

With record-breaking attendance, a new show floor with over 130 exhibitors, and packed meeting and seminar rooms, Tire Industry Association (TIA) officials called the recent International Tire Expo a "great success." Some 5,504 "tire industry buyers" attended the ITE/SEMA Show, the highest attendance ever for the show since it moved permanently to Las Vegas.

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Among the many events were a number of presentations. Erik Olsen, vice president of sales for Michelin Americas Small Tires, presented the annual TIA/Michelin Scholarships, which went to three deserving high school seniors. Equally deserving was Olin Mott, founder and retired chairman of Olin Mott Tire Co. in Tampa, this year’s winner of the Tire Dealer Humanitarian Award.

TIA presented Outstanding Service Awards to outgoing board members Wayne Croswell, Tom Formanek, Frank Hall, Tommy Harris, Nick Hodel, Ken Kevorkian, Tony Koles, Joe McCarthy, Jim Miller, Larry Mullins, and Barry Steinberg.

The annual Hall of Fame Breakfast ran a little long, but no one seemed to mind as they were spellbound by the keynote address by Erik Weihenmayer, the first blind man to summit Mt. Everest. During his keynote address at the Breakfast With the President event, Tom Dattilo, president, chairman and CEO of Cooper Tire & Rubber, discussed the tire dealer’s role in improving consumer confidence in the tire industry.

Sure says Essenza sure to be a winner for dealers

Looking to help its dealers capitalize on the burgeoning tuner market, SURE Tire launched Concept Essenza, a tire/wheel packaging effort to deliver "high quality, low price" products to the broadest possible audience, according to SURE officials.

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The program, developed by SURE Tire’s new product committee, chaired by Brad Saunders, vice president of Los Angeles-based Fairmount Tire & Rubber, includes an Essenza brand high performance tire line, to be manufactured by Goodyear, and 10 styles of Essenza brand wheels made by Primax and Ace Alloy. The wheels will feature multiple lugholes, allowing them to be fit on a wider range of vehicles.

The program will allow dealers to sell their own complete tire and wheel packages at highly competitive prices that will yield "$300-$400 in gross profits on an $800 sale," said SURE officials. SURE is targeting well-trained dealers looking for a lower cost customized option for their customers.

Saunders and his committee developed the sharp sidewall styling and worked with Goodyear on the tread design for the exclusive H-rated tire line. The Essenza line will be available in 12 popular 16- to 18-inch sizes. SURE also created extensive POP materials for the program, including brochures, price cards, wheel tags and counter cards.

Of Note ®ƒ

Weston, Ontario’s Dynamic Tire Corp. opened a new 60,000-square-foot warehouse in Memphis, its third in the U.S. and seventh in North America. ®ƒ Continuing its budget-reducing sale of assets, Michelin North America sold its tire textile factory in Scottsville, Va., to Hyosung America. MNA will continue to buy polyester and nylon cord from the plant as part of the deal. ®ƒ Yokohama Tire has launched two new information- and feature-loaded Web sites for consumers and dealers through its www.yokohamatire.com URL. ®ƒ TIA will host the 2003 Aftermarket Legislative Summit, bringing together eight key trade associations for meetings with Congress, Feb. 25-26 in Washington, D.C. ®ƒ Goodyear has begun to aggressively expand Goodyear and Dunlop brand distribution, signing on with TBC’s Big O Tires and Tire Kingdom chains, and with Sam’s Club warehouse outlets. ®ƒ Negotiations between Kumho Industrial Co. and an investment group led by JP Morgan Chase and the Carlyle Group for the purchase of an 80% stake in Kumho Tire fell apart in late November; Kumho Industrial was seeking $1.5 billion in the deal, more than the U.S. investment consortium was willing to pay. Kumho reportedly was in contact with other potential buyers. ®ƒ Arnco flatproofing products are now optional on Caterpillar brand OTR tires. ®ƒ California’s Auto Repair Coalition sponsored a meeting Oct. 23 of more than 100 auto repair industry leaders to discuss key legislative "challenges" being posed by the state, including the Bureau of Automotive Repair (see Tire Review, October 2002, pg. 6). ®ƒ AutoZone contributed $250,000 toward construction of the Automotive Aftermarket Industry Education Center at Northwood University’s campus in Midland, Mich. To date, the project has raised $1.75 million of the $5 million needed to complete the center. ®ƒ Toyo’s Proxes RA-1 will be the official tire for the Speed World Challenge Series’ GT class next season. ®ƒ www.bfgoodrichtires.com – the BFG brand’s official Web site ®“ has "received a thorough overhaul" and features a number of new consumer features. ®ƒ Replacement Titan crop spraying equipment tires can be ordered from AgChem via its Web site at www.sprayparts.com. ®ƒ Heintschel Tire & Service Center in Texarkana, Texas, is the latest Maragoni Ringtread licensee. ®ƒ Nissan Forklift Truck named Solideal Tire Marketing as its Supplier of the Year. ®ƒ Goodyear has expanded its Kelly Safari SUV line by 14 LT and LT-metric sizes, covering 15- and 16-inch diameters, giving the line 29 total sizes. ®ƒ BMW’s new Z4 2.5i and 3.0i roadsters will ride on Bridgestone Potenza RE050 RFT run-flats. ®ƒ Moore & Patron Tires & Service, a Goodyear Gemini retailer in Monroe, La., was named the winner of the 2002 Eco-Auto Conservation Marketing Contest sponsored the Water Foundation. ®ƒ For the first three quarters of the year, Titan International posted a net loss of $20.15 million against sales of $354.2 million, down from last year’s net loss of $13.26 million and sales of $356.9 million. ®ƒ Quality Design Systems’ new Preferred Partnership Program adds products from outside software companies, such as MechanicNet. ®ƒ Continental AG reported sales of $8.35 billion through the first three-quarters of 2002, up 3% from last year, and consolidated earnings of $538.4 million, up 77% from the same period in 2001. ®ƒ American Tire Distributors reported that net sales through the first three quarters of 2002 declined 6.2% to $809.2 million vs. $862.8 in the period 2001, while net earnings improved to $5 million compared to a $12.8 million loss in 2001. ®ƒ. SEMA’s Wheel Industry Council has issued a detailed bi-lingual wheel and tire installation-guidelines poster; view the poster and ordering information at www.sema.org/wicposter. ®ƒ Automakers and vehicle component suppliers must now reimburse motorists who pay to fix problems that are later the subject of recalls, according to a new NHTSA ruling. ®ƒ Automotive Warehouse Distributors Association (AWDA) presented its Pursuit of Excellence award to Jon Owens, publisher of Counterman, a sister magazine of Tire Review. ®ƒ Groupe Michelin reported consolidated net sales of $11.46 billion through the first nine months of 2002. Net profits, however, were not reported. ®ƒ Discount Tire has moved to larger headquarters offices in Scottsdale, Ariz., and opened its 500th store in early November, an eight-bay facility in Lansing, Mich. ®ƒ European Commission raided six companies in France, Italy, Germany and Spain in mid-November over a suspected carbon black price-fixing cartel; U.S. authorities conducted similar action according to reports. ®ƒ Private Brand Tire Group is now part of TIA, thanks to what the two groups called a "permanent cooperative agreement." Don Dominguez will stay as a consultant and liaison between the group and TIA. ®ƒ T.O. Haas Tire Co. founder Theo Oswald Haas, 87, died in Lincoln, Neb., Dec. 1 of complications following surgery. ®ƒ Goodyear had near break-even performance through the first three-quarters of 2002, posting a net loss of just $600,000 vs. a loss of nearly $30 million for the same period last year. Sales for the period were $10.3 billion compared with $10.7 billion in 2001. Worldwide tire unit volume was down 2.5%.

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