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RMA Asks NHTSA For Internet OptionLooking to increase the number of tires being registered, the RMA has asked NHTSA for formal permission to allow tire buyers to register to tires via tiremaker Web sites. Allowing "additional, easier choices" would enhance NHTSA’s ability to notify owners in the event of a safety problem with their tires.

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Tire E-Registration?

RMA Asks NHTSA For Internet Option

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Looking to increase the number of tires being registered, the RMA has asked NHTSA for formal permission to allow tire buyers to register to tires via tiremaker Web sites. Allowing "additional, easier choices" would enhance NHTSA’s ability to notify owners in the event of a safety problem with their tires.

RMA’s proposal would be in addition to current federal law that requires tire dealers to provide buyers of all on-highway tires with a registration card, complete with the models, sizes and identification numbers of all tires purchased.

However, the nation’s largest supplier of tire registration forms and processing objects to RMA’s proposal. "Adding responsibilities for the tire dealer to be involved in Web-based tire registration is a flawed concept that would not increase but only decrease registration levels and would add significant confusion to how tire dealers should register tires," said Paul Kruder, president of CIMS, in a letter to TIA officials objecting to the association’s support of RMA’s action (see Feedback, page 8).

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Some tire companies and independent software system providers have electronic tire registration options as part of dealer point-of-sale computer systems. Both Yokohama Tire Corp. and Pirelli Tire North America already offer tire e-registration via their Web sites.

NHTSA recently issued a ruling that allows for electronic registration of child safety seats – a product also targeted by TREAD Act regulation ®“ as long as the seat producer also complies with current regulations and does not "obscure the importance of owner registration."

RMA proposes that tire dealers and distributors provide a supplemental form telling tire buyers that they can also register their tires via the tire company’s Web site.

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Second Time’s a Charm as Kumho Strikes Deal For its Tire Group

Kumho Industrial Co. signed a tentative agreement Apr. 18 to sell a majority share of its Kumho Tire unit to South Korea’s Military Mutual Aid Association (MMAA) for $1.2 billion, far off its asking price of $1.5 billion.

Under the deal, MMAA would hold a 50% stake in the global tire unit, with Kumho Industrial retaining a 30% share and a group of unnamed other investors would control the remaining 20%.

MMAA, an investment fund for South Korean military personnel, and Kumho Industrial shareholders are expected to ratify the deal in June.

Kyu Cho, president of Kumho Tire USA, said the agreement will "lay the groundwork for continued growth in every aspect of our business, including capacity expansion and marketing activities."

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Kumho Industrial put its tire group up for sale in late 2001, seeking $1.5 billion for an 80% stake in the unit. An earlier sale agreement with a consortium of JP Morgan Chase and Co. and the Carlyle Group fell apart last November.

Goodyear Looks at Major Cuts After Posting $163 Million 1Q Loss

After reporting a $163.3 million net loss for the first quarter, troubled Goodyear Tire & Rubber Co. discussed plans for additional cutbacks and changes it hopes will turn the company around by 2005.

The negative quarterly results included a net loss of $61.5 million by Goodyear’s struggling North American tire unit, which saw its first quarter tire shipments drop 5.2% to 24.8 million tires vs. 26.2 million units in 2002’s first quarter. Replacement unit sales fell 6.4%, said Goodyear, while OE unit shipments dropped 2.7%. All of the company’s global tire units, except the Latin America unit, reported increased dollar and unit sales, and positive net profits.

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Goodyear President and CEO Bob Keegan told industry analysts that the company will cut some $1.5 billion in operating costs out of its North American unit by 2005. While offering no specifics, Goodyear officials said cuts would come in overhead costs, operational changes and from moving tire production offshore to lower labor-cost countries.

Meanwhile, talks between Goodyear and the United Steelworkers of America (USWA) on a new master contract stalled, with both sides agreeing to work on a day-to-day basis for the time being. USWA negotiators roundly rejected Goodyear’s initial plan, which called for $915 million in wage, benefit and pension concessions from current and retired workers. The union offered its own "recovery plan" for Goodyear, and claimed the company agreed to negotiate based on its plan.

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Goodyear’s plan offered no assurances that it would not close any plants, while the union’s counter plan calls for dramatic cuts in company management and other changes to protect union jobs. At press time, there was no further action in negotiations.

With Goodyear looking to cut costs, many industry analysts point to production plants as a primary target, especially if Goodyear follows through and increases the number of tires it imports from overseas from four million in 2002 to 10 million units this year, and increase that would come at the expense of North American tire plants.

Keegan told analysts the company is looking to sell under-performing and non-core assets, like its profitable chemical division, improve cash flows, and boost North America tire marketshare by at least 2% by 2005.

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In addition, Goodyear plans to eliminate some of its lesser brands, discontinue some private brand business, reduce SKUs, and focus on higher profit tire lines.

Overall, Goodyear reported net sales of $3.5 billion, up 7.1% from the same period last year, but the net loss of $163.3 million was a 158.4% increase from the first quarter 2002 loss of $63.2 million.

BAH Looks to Future Court Dates After Losing Round to Lisoni

Bridgestone Americas Holding (BAH) lost a key round in its battle against a proposed multi-billion dollar class action lawsuit in late April when California Superior Court Judge Christopher Sheldon ruled the suit could continue and refused a motion to dismiss filed by the tire company.

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Filed with much fan-fare last August, the lawsuit filed by Joseph Lisoni seeks national class action status, accuses the tiremaker of concealing tread separation problems with its Firestone Steeltex A/T, Steeltex R4S and Steeltex R4SII lines, and calls for a court-ordered recall of the estimated 27.5 million Steeltex tires produced. The suit also claims negligence in tire design, unfair business practices and liability.

"Our position has been consistent, that there is no reason for a recall of these tires," BAH spokesman Dan MacDonald said. "NHTSA has reviewed these tires and clearly stated that they found no evidence of defect."

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A 16-month NHTSA investigation of Steeltex tires, launched in the fall of 2000, ended in April 2002 with no findings. Lisoni petitioned NHTSA to reopen its investigation, and reports say the agency will make a decision on that request by the end of May.

Many in the industry who have studied Lisoni’s suit and tactics, including a grand-standing press conference last August when he first announced the lawsuit, find little substance to his claims and feel he is merely looking for a big payday. Lisoni reportedly represented one other client in a previous suit involving Steeltex tires, but settled before the case went to trial.

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BAH remains optimistic that it can have the case thrown out, Another court date is set for late May to hear other dismissal motions.

Cooper Reorg Pulls All Global Tire Operations Into One Group

With a major reorganization announced Apr. 23, Cooper Tire & Rubber Co. now has a single global tire operation. The move consolidated its formerly separate North American, commercial and international tire groups into one reporting unit.

Dick Stephens remains head of Cooper’s tire operations. Mark Armstrong, formerly president of Cooper’s North American tire operations, is now executive vice president of commercial operations, who is responsible for global tire business, retread and material sales, marketing, advertising and the new Mickey Thompson subsidiary. Larry Beard, formerly president of Cooper Standard Automotive’s fluid systems division, will manage the engineering, manufacturing, quality and technical activities of the tire group as executive vice president industrial operations.

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Ed Reading was promoted to vice president for retread products and international sales with responsibilities for retread products, custom mixing and fleet sales, as well as international tire sales. Bill Woeste is now responsible for manufacturing operations at all tire group plants as vice president of manufacturing.

Both Armstrong and Beard now report to Stephens. Larry Enders, who was president of Cooper Tire’s commercial products division before the consolidation, will retire later in the year.

Though Some Companies Struggled, 2002 Was a Much Better Year

Though markedly better than 2001, last year was not a banner one for the tire industry. Still, in the face of a flat market, tire companies and others in the industry posted reasonably good results for the year.

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Late year raw material cost increases – primarily in oil and natural rubber ®“ dinged a few balance sheets; write downs, accounting changes and currency fluctuations also contributed to a few less stellar results.

Company by company, here’s a run down on 2002 financial results (2001 results are shown in parentheses):

American Tire Distributors – Sales: $1.06 billion ($1.11 billion), Profit: $37.4 million (-$30.9 million); Bandag Inc. ®“ Sales: $901 million ($964.9 million), Profit: $2.79 million ($43.8 million); Bandag/TDS ®“ Sales: $364.9 million ($398.9 million), Profit: -$11.4 million (-$11.1 million); Bridgestone Corp. ®“ Sales: $18.9 billion ($17.5 billion), Profit: $1.3 billion ($967.4 million); Bridgestone Americas Holding ®“ Sales: $7.6 billion ($7.4 billion), Profit: $83 million (-$1.68 billion); Continental AG ®“ Sales: $10.9 billion ($10.04), Profit: $251.6 million (-$231.2 million); Continental Tire North America ®“ No results issued at press time; Cooper Tire & Rubber Co. ®“ Sales: $3.3 billion ($3.15 billion), Profit: $112 million ($18.9 million); Cooper Tire Division ®“ Sales: $1.8 billion ($1.7 billion), Profit: $137 million ($73 million); Federal Corp. ®“ Sales: $103.4 million ($89.4 million), Profit: Not listed; Goodyear Tire & Rubber Co. ®“ Sales: $13.9 billion ($14.1 billion), Profit: -$1.1 billion (-$203.6 million); Goodyear North American Tire ®“ Sales: $6.7 billion ($7.15 billion), Profit: -$35.5 million ($107.8 million); Groupe Michelin ®“ Sales: $14.9 billion ($14.13 billion), Profit: $585.8 million ($931.9 million); Myers Industries ®“ Sales: $608 million ($608 million), Profit: $24 million ($15.2 million); Nokian Tyres plc ®“ Sales: $457,2 million ($379.4), Profit: $45.8 million ($33.2 million); Pirelli SpA ®“ Sales: $6.01 billion ($6.7 billion), Profit: $456.1 million ($593.7 million); Sumitomo Rubber Industries ®“ Sales: $3.58 billion ($3.23 billion), Profit: $65.8 million (-$53.6 million); TBC Corp. ®“ Sales: $1.1 billion ($1.0 billion), Profit: $27.4 million ($21.0 million); Titan International ®“ Sales: $462.8 million ($457.5 million), Profit: -$35.9 million (-$34.8 million).

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Correction

A couple of clarifications are necessary in our story on super wide tires that appeared last month (page 14). Michelin North America introduced its X-One super wide in 2000, not 2001 as stated. And Michelin was the first to gain OE fitments for its super wide tire, gaining positions with Freightliner in 2000. Since then, Michelin points out, it has added OE business with Volvo and a number of trailer manufacturers, and actively sells the X-One through dealers, truck and trailer dealers, and T/A and Petro truckstops.

 

Yokohama Reaches New ‘Hites’ with Chip Technology

Yokohama Rubber Co. will launch a new real-time tire pressure monitoring system (TPMS) later this year that measures and controls inflation pressures and internal temperatures for truck and bus tires. Later this summer, Yokohama plans to begin marketing the system, in limited quantities, to truck fleets and bus operators through its global tire sales groups, including Yokohama Tire Corp. here in the U.S.

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Named HiTES – Hi-Technology Tire Engineering System ®“ the TPMS includes a sensor unit, a signal receiver, a display and an LED indicator. Secured on the wheel, the real-time sensors constantly report pressure and temperature data through a signal receiver to an in-cab display. An adjacent LED indicator uses easy-to-understand color changes to show inflation pressure status.

The tiremaker said that HiTES "allows drivers to accurately confirm air pressure in real time, greatly reducing the time needed to conduct pressure checks before driving." Plus, it allows drivers to know instantly should pressure or temperature problems threaten tire life and safety.

While it didn’t elaborate, Yokohama said it developing a range of systems and products to provide complete administrative and operational support for HiTES. The TPMS was developed as part of its, a computer-based Tire Management System, which integrates data on tire wear, air pressure, temperatures and remaining tread "for comprehensive tire management" and optimized tire performance.

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Goodyear, Siemens Chip Tech Make Tires Smart

Drivers may not be too bright when it comes to maintaining inflation pressure, but Goodyear and Siemens VDO Automotive co-developed new chip technology that will make tires smart.

Debuted at the Geneva Auto Show earlier this year, the Goodyear/Siemens Tire IQ tire pressure monitoring system (TPMS) includes a watch battery-sized computer chip that is built into a passenger vehicle tire, and accompanying sensors and an in-cab monitoring system that will warn drivers should tire pressures drop below proper levels.

The chip constantly reports tire pressure and temperature to the sensor system, where software calculates recommended tire pressure based on data including air temperature, tire pressure, tire load, vehicle speed and other driving habits, according to the companies. Information is relayed to the driver via a radio communications system.

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Should any inflation deficiency be detected, the Tire IQ system first gives drivers a "convenience message" warning, prompting them to add air the next time they stop for fuel, said Goodyear. If air pressure reaches "critically low" levels, a warning message is displayed along with a calculated number of miles to correct the situation.

Goodyear is in discussions with several automakers, and said Tire IQ could be available on new vehicles as early as the 2006 model year.

ATD Builds on to its xpress performance program

American Tire Distributors (ATD) expanded its Xpress Performance high performance tire, wheel, and suspension product direct-delivery program across the U.S., and added several new performance tire and custom wheel brands to the offering.

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ATD’s Xpress Performance added wheel styles from Mickey Thompson, Focal, Arelli and Boyd Coddington. All told, the ATD program now offers more than 145 different wheel styles. In addition, the program now includes selected Pirelli and Mickey Thompson tires, giving it 12 performance tire brands.

In addition, ATD now accepts Saturday calls at its Xpress Performance technical assistance call center.

TIA Hires Attorney to Look at Ad Campaign Funding

Following up on its overall strategic plan, TIA has begun actively exploring the development of an industry-wide advertising and public relations campaign to support tire safety and technology and tire dealers. TIA has retained antitrust attorney Peter Guntz to explore funding options for a multi-million national campaign, similar in vein to highly successful efforts by milk producers ("Got Milk?") and beef processors ("Beef – It’s What’s For Dinner").

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Planned to "increase the public’s appreciation of the safety, performance and value of tires," according to TIA, the campaign would be all-inclusive and involve tire manufacturers, marketers, dealers and associated suppliers.

Among a variety of funding options, Guntz is specifically looking into how the industry could create a "check-off" program, a legislative program that would collect an assessment on all tires produced in or imported into the U.S. (see Tire Review, January 2003).

TIA announced no timetable for completion of Guntz’s investigation.

 

Of Note

®′Autobacs Seven Ltd., the Tokyo mega-retailer, is reportedly building a Super Autobacs tire, wheel and auto part store in Stanton, Calif., scheduled to open sometime this summer.

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®′U.S. Justice Department is investigating illegal donations by employees of a tire litigator Tab Turner’s Little Rock, Ark., law firm to the presidential campaign of North Carolina Senator John Edwards.

®′Cooper says it will source more tires for North America, from Asian partners, including Kenda Rubber Industrial Co., to reduce its costs and increase profits.

®′Titan International has been warned by the New York Stock Exchange that it must increase the average price of its shares to above $1 over a 30-day period or risk being delisted.

®′Ohtsu Tire & Rubber will merge with its new owner, Sumitomo Rubber Industries on July 1, but its Falken brand will continue to be marketed separately.

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®′Hoyt Wells, 76, retired vice chairman, president and COO of Goodyear, died on Mar. 24.

®′Kumho Tire USA served as the title sponsor of the inaugural Kumho Tire Tropical 12 Hours of Homestead SCCA race, held at Miami’s Homestead Raceway Apr. 18-19.

®′Long-time Arnco executive Larry Mendelsohn, 80, passed away Mar. 27.

®′Alliance Tire – Yossi Anglister named president.

®′ARI – Larry Pavey named CEO.

®′Bridgestone/Firestone North American Tire – Named Hank Hara to executive vice president of tire development and technology.

®′Cooper Tire & Rubber – Appointed Chad Britton to manager of sales and marketing training ®ƒ Scott Bishop named sales training manager ®ƒ Greg Ring promoted to private brand account manager.

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®′Falken Tire – Barbara Burdick named pricing and promotions administrator ®ƒ Tim Widener named product engineer for technical services ®ƒ Michael Alviz and Nick Fousekis named marketing specialists.

®′Goodyear Tire & Rubber – Arty Straehla promoted to director of consumer tire manufacturing ®ƒ Phil Brown promoted to manager of the Lawton, Okla., plant ®ƒ Dan Martin named general manager of OE and strategic accounts ®ƒ Don Roulett named global aviation tire marketing manager ®ƒ Patrick Hurley promoted to vice president of supply chain ®ƒ Brant Schnackenberg named vice president of North American tire manufacturing.

®′Hankook Tire America – Bill Bainbridge appointed director of marketing.

®′Yokohama Tire – Yasuhiro Mizumoto named executive vice president of manufacturing and technology ®ƒ Kim Hernandez named supervisor of corporate communications.

®′Maxxis International received Ford’s Silver World Excellence Award, recognizing its top suppliers in quality, delivery and cost for 2002 performance.

®′Goodyear commercial division vice president Ted Fick was named chairman of Assemblies on Time, a Goodyear/Accuride joint venture that produces mounted tire/wheel assemblies.

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®′AutoZone has taken over distribution of automotive parts and accessories to Midas’ 1,670 service shops in the U.S., and plans a similar venture for the 230 Midas shops in Canada.

®′Flamborough, Ontario’s Beverly Tire Group opened its 12 commercial tire center in the province, located in Mississauga.

®′Both Bridgestone Americas Holding and Michelin North America have agreed to operate on a day-to-day contract extension with the USWA until the union’s negotiations with Goodyear on a pattern agreement are completed.

®′Tire Review columnist Scott Blair now offers onsite technical/sales tire and wheel training. Contact him at 251-377-6724.

®′For the eighth straight year, Bridgestone Corp. was awarded GM’s Supplier of the Year honors.

Cooper bought out Stow, Ohio’s Max-Trac Tire Co., marketers of the Mickey Thompson and Dick Cepek tire brands.

®′Retired Firestone public relations vice president Allen "Scotty" Brubaker, 87, died Apr. 3 after a lengthy illness.

®′With the help of Mighty Auto Parts, Englewood Tire Distributors created ETW Auto Parts Inc., and will distribute auto parts in northern New Jersey.

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®′Florida Automotive Trades Association will hold its second annual convention July 18-20, in Lake Buena Vista, Fla.

®′The 100-year business relationship between Bridgestone/Firestone and Ford came to a quiet end Apr. 1 with the last shipment of tires (spare tires) to Ford’s assembly plant in Kansas City.

®′Fountain Tire, based in Edmonton, added its 146th store with the purchase of Plains Tire in Gilbert Plains, Alberta.

®′Bob Holley was inducted into the Louisiana Independent Tire Dealers Association’s Hall of Fame during the groups early April convention and trade show in Lafayette, La.

®′Bristol, Va.-based Blevins Tire & Recapping became the 12th Marangoni Ringtread System retreader in North America.

®′Tire Wholesalers opened a new 44,600-square-foot addition to its Troy, Mich., warehouse on May 15. The grand opening featured an open house, trade show and dealer seminars.

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®′Goodyear officially launched its new Tire-HQ Extranet service for dealers – www.tire-hq.com ®“ which has improved features from the XPLOR site it replaces.

®′In a move to boost membership, TIA has hired Wilson Beach as director of sales on a trial basis.

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