the company’s seven business units that didn’t continue "in the first quarter their sterling performance from 2002," Keegan said ®“ and return the debt-laden tiremaker to the black.
To do that, Keegan said Goodyear will have to cut some $1.5 billion in operating costs out of NAT by 2005, increase North American marketshare by two points and global share by 1%, increase revenue per tire by 4%, achieve a 6% return on sales, and improve inventory turns.
Goodyear’s biggest challenge will be gaining a favorable labor contract. The USWA roundly rejected the tiremaker’s first offer, which called for some $915 million in salary, benefit and pension give-backs over three years.
At the same time, Goodyear angered USWA members by stating that it would significantly increase tires imports from lower cost countries this year – from four to 10 million units ®“ taking some six million tires out of North American plants. And financial analysts have suggested that Goodyear needs to close at least two plants to help lower its expenses.
"It’s absurd that they want these concessions to get money out of our pockets, when we know they will put the money into non-union facilities halfway around the world," USWA spokesman Wayne Ranick said in an article in the Akron Beacon Journal.
"The company referred to its proposal as ‘an extraordinarily good offer,’ " the USWA said in a statement. "The fact is that it represents an extraordinary attack on the families of our working members and retirees."
According to the USWA, Goodyear’s offer called for wage restructuring and job cuts, COLA reductions, a 400% increase in drug co-pay costs for active employees and a 600% hike for retirees, medial insurance premium increases and reduced medical benefits for retirees, and "substantial pension concessions." In addition, Goodyear is seeking to contract out certain production and maintenance positions.
At press time, both sides were still negotiating, but the USWA had started making preparations for a nationwide strike. The old contract expired Apr. 19, and the two sides continue with a day-to-day agreement.
In a May 30 update to its Goodyear members, the USWA said that strike training and preparations had been "moving forward at a fast pace," with workers at six of the 14 Goodyear plants receiving training. The remaining plants were scheduled to receive strike training by June 12, according to the USWA. Strike authorization votes, considered routine at the start of any master contract negotiations, had been held in March.
Sumitomo Reaches for the Sun, Unveils Automated Production System
After keeping it under its hat for more than two years, Sumitomo Rubber Industries Ltd. (SRI) jumped into the automated tire manufacturing ring with its new Taiyo production system, formally unveiled May 12.
The Taiyo system (Taiyo means "the sun") has been operating at SRI’s Shirakawa plant in Fukushima, Japan, since last July. An earlier prototype has been in operation at SRI’s Nagoya plant since 2000.
SRI’s new cellular production system integrates all component preparation, tire building and curing in one unit. SRI said the result is a highly consistent and uniform finished tire with no joints. Because one Taiyo unit can produce up to 1,000 units of eight different sized tires each day, SRI said the automated system provides cost-saving manufacturing flexibility and increased productivity. Compared to conventional processes, Taiyo reduces energy consumption by 35%, SRI officials said.
Improved component processing accuracy and the ability to consistently mix compounds in-line allow SRI to produce tires that are 5% lighter, the company claimed.
SRI is currently only producing passenger radials using the system, but plans to add light truck/SUV and run-flat tire production next year at its recently acquired Ohtsu tire facility in Izumi. It is also looking to produce medium truck tires and motorcycle tires using Taiyo.
Treadways Customers Get 24/7 Access With New B2B Site
Treadways Corp. launched its own B2B Web site for customers, allowing them to place and monitor product orders, have access to real-time inventory levels and order ship dates, and access current and historical invoices via the Internet.
Treadnet is available to all Centennial, Eldorado, Jetzon, Sumitomo and Telstar customers through those brands’ Web sites and through Treadway’s main site at www.treadwayscorp.com.
Customers can access Treadnet 24/7, and each user will be assigned a unique login name and password. Eligible customers will receive a registration form via email.
Treadnet is not being offered to TreadXpress customers at this time due to the complexity of the business, but will be offered in the near future, according to Treadways.
BFNAT Splits Into Four Tire Units, Names Presidents For Each
Bridgestone/Firestone North American Tire (BFNAT) restructured its business units and management, splitting into four operating units – Consumer Replacement Tire, Consumer OE Tire, Truck and Bus Tires, and Off-Road Products ®“ with individual group presidents.
John Gamauf was named president of the Consumer Replacement Tire unit, focused on passenger and light truck tire sales and marketing to dealers, company-owned stores and corporate accounts in the U.S. and Canada. Mike Martini will serve as president of the Consumer OE Tire unit.
Singh Ahluwalia is now president of the Truck and Bus Tires unit, which will handle both OE and replacement sales and marketing in the U.S. and Canada. Ralph Burchfield is president of the Off-Road Products unit, which combines BFNAT’s once separate OTR and agricultural and tube businesses, and will include management of the company’s plants in Des Moines, Iowa; Bloomington, Ill.; and Russellville, Ark.
All four, as well as Manufacturing and Technology group President Yas Kawaguchi, report to Mark Emkes, BFNAT chairman, president and CEO. In addition, David Laubie, executive director of engineering, and Kevin Terada, vice president of supply, planning and sourcing, also report to Emkes.
Goodyear Sued Over Carbon Black Billing, Files Countersuit
Claiming Goodyear failed to pay for carbon black it purchased and used, Continental Carbon Co. filed a $2.3 million collection lawsuit against the tiremaker on May 2 in the 189th District Court in Harris County, Texas.
Counterclaiming that the carbon black was "defective," causing it to lose two days of production at its Lawton, Okla., plant last September, Goodyear filed a countersuit on May 8 in Lawton seeking $4 million in damages.
In the end, judges and jury will decide it all.
Continental Carbon claims that "a breach of contract by Goodyear" resulted in monetary damages to the carbon black maker. "For nearly eight months, Continental has been actively seeking payment for these delinquent receivables, but having exhausted all other avenues of resolution, the company had no other alternative but to engage in legal action to resolve the business dispute," the company said in a statement.
"Goodyear has a contractual right to set off any amounts it owes to Continental Carbon based on the substantial damage to the company incurred by the plant shutdown," the tiremaker said in a prepared statement.
"The defective material was discovered through Goodyear’s extensive quality systems and quick action was taken to ensure that none of the tires manufactured using the defective material reached consumers."
From Show Floor to Showroom Floor:
Kumho Launches 26-Inch Ecsta STX
Kumho Tire USA’s 26-inch version of its Ecsta STX light truck/SUV radial is now available, and the company has issued a technical bulletin to dealers emphasizing that the load carrying capacity of the 26-inch tire and wheel must be sufficient to support the gross axle weight of the vehicle.
The 305/30R26 110H STX was introduced at the 2002 ITE/SEMA show, and was previously available in sizes ranging from 15 to 24 inches. According to Kumho, the new 26-inch Ecsta STX is engineered to provide the load carrying capacity needed for fitments on vehicles such as the Cadillac Escalade and Ford Expedition.
The accompanying service bulletin states that the 305/30R26 110H Ecsta STX has a rated maximum load capacity of 2,337 pounds at 42 psi (cold), with a maximum inflation pressure of 50 psi (cold) allowed with no increase in load carrying capacity.
When the tire is mounted in a light truck/SUV application, the maximum load capacity of the tire must be reduced by dividing the maximum load shown on the sidewall by 1.1, said Kumho. The maximum load capacity of the Ecsta STX 305/30R26 110H on a light truck is 2,124 pounds at 42 psi (cold).
The bulletin also emphasizes that the 26-inch tire should not be mounted on vehicles where the load exceeds the maximum load capacity of the tire, and it includes details on how dealers can determine the load capacity of a light truck or SUV.
Titan ‘Temporarily’ shuts down Brownsville Plant
Just days after laying off 160 workers at its three-year-old Brownsville, Texas, plant, Titan International temporarily shut the plant down May 31, citing high inventories, continuing financial losses and heavy competition by Chinese tiremakers.
Meanwhile, according to the Brownsville Herald, Titan International also laid off some 300 workers each at its Quincy, Ill., and Des Moines, Iowa, plants in late April and early May.
Titan officials said the Brownsville shutdown would be temporary, and that the plant would restart production in three or four months. On May 21, Titan laid off 160 workers from the plant, including tire builders, production workers and maintenance staff. Titan had employed about 300 people at the one-million-square-foot plant, which opened in late 1999 with plans to eventually employ about 800.
Titan posted a $36 million loss for 2002 on sales of just under $463 million. In 2001, the company lost $35 million on sales of $458 million. For the first quarter of 2003, Titan saw sales increase slightly over 2002 to $129 million but lost $5.9 million compared to a loss of $2.9 for the first quarter of 2002.
Even with Attendance Drop-off, WTE Survives
Despite consistently dwindling attendance at the last three events, the biennial World Tire Expo will continue, and has already been scheduled for Apr. 20-22, 2005 at the Kentucky International Convention Center in downtown Louisville.
At its early May meeting, the TIA board of directors voted to retain the convention and trade show, citing the positive responses of attendees in a post-event phone survey the association conducted. TIA officials said some of the attendance drop off was due to the war in Iraq, which started just days before the late March event, and heightened travel security concerns.
While over 1,800 people registered for the 2003 WTE, total attendance – registered buyers and show exhibitors ®“ came in at 1,485, down 45% from the 2001’s show attendance of 2,150, which, in turn, was down 27% from the year prior. The 2003 WTE had 133 exhibitors, down just eight from 2001’s 141 exhibitors.
The 2005 WTE dates coincide with "Thunder Over Louisville," the city’s annual massive fireworks celebration, which TIA officials hope will help improve attendance.
CTNA, Hankook Face new Ford Rollover Lawsuits
Rollover accidents in Ford vehicles, allegedly caused by tire failures, now have Continental Tire North America (CTNA) and Hankook Tire America facing lawsuits.
Families of three Los Angeles area couples killed last year in a rollover accident filed suit May 13 against CTNA and Ford, claiming the companies failed to correct "known" product defects that led to the fatal accident last May.
Filed in Los Angeles Superior Court, the lawsuit by unnamed relatives claims a General Grabber on a Ford Expedition the six people were riding in failed suddenly on a San Bernardino County highway, causing a rollover accident. According to one news report, the relatives claim the companies knew the tire was prone to tread separation and that the vehicle was prone to severe oversteer problem when a tire blew out.
Hankook and Ford were named in a May 29 lawsuit filed in the Houston area in connection with a May 9 accident that killed a high school senior and injured 10 others returning from a school trip in a 15-passenger Ford van.
According to an Associated Press report, the lawsuit claimed that the van was "unreasonably dangerous" because it had single rear wheels instead of duals, a short wheelbase and a high center of gravity. The suit claims the van crashed after the right rear tire "suddenly and catastrophically came apart" as the vehicle traveled on U.S. 290 near Houston.