Industry Report - Tire Review Magazine

Industry Report

Michelin signs eight more retreaders, now claims 38

ntal Teves. The worldwide Passenger Tire Group sales, including from controlled distribution channels, amounted to 2.547 billion Euros ($2.72 billion), compared to sales of 2.389 billion Euros ($2.79 billion) in 1998, an increase of 6.6 percent. The company’s worldwide Commercial Vehicle Tire Group increased its sales by 15.8 percent from 759 million Euros ($885.53 million) in 1998 to 879 million Euros ($937.01 million). With sales of $1.593 billion, up from $1.435 billion in 1998, the Continental General Tire (CGT) Inc. recorded an increase of 21.5 percent. CGT sold 27 million passenger tires and 2.5 million truck radials, equivalent to gains of 13 and 8 percent, respectively.

Titan International

Still reeling from ongoing strikes at two of its plants and a continuing downturn in the agricultural market, Titan International posted a loss of $11.4 million for 1999, a decrease of $19.6 million compared to the company’s 1998 earnings of $8.2 million. Sales for the year totaled $588 million, compared to $660.8 million in 1998.

Michelin brands back in Montgomery Ward

After a two-year absence, Michelin’s various major brands will once again be sold through Montgomery Ward Auto Express locations. A new supply agreement between Montgomery Ward and Michelin America Small Tires puts Michelin, BFGoodrich, Uniroyal, and unnamed associate brand tires in the retailer’s 234 Auto Express stores for the first time since the previous agreement was abandoned in a disagreement over terms.

Auto Express locations already offer major and associate branded tires from Bridgestone/Firestone Inc. and Goodyear Tire & Rubber Co. MAST has existing supply agreements with retailing giants Wal-Mart and Sears, Roebuck & Co., including Sears’ NTB locations.

Penske honors Goodyear, extends contract to 2004

Showing faith and satisfaction in its decision to go with a single supplier for all its OE, replacement and retreaded truck tire needs, Penske Truck Leasing has extended its original exclusive contract with Goodyear Tire & Rubber Co. through 2004.

The move came less than a year after Penske signed Goodyear as its exclusive commercial truck tire supplier. The two-year extension was agreed to at Penske Truck Leasing’s recent annual supplier conference.

Meanwhile, Penske named Goodyear as its Overall Outstanding Supplier of the Year at Penske’s annual supplier conference in Scottsdale, Ariz.

Goodyear has enjoyed a long, multi-level relationship with Penske Truck Leasing Chairman Roger Penske. With operations in the U.S., Canada and Mexico, Penske Truck Leasing is Goodyear’s largest national account for commercial truck tires.

"It was obvious from the beginning that Goodyear was focused on bringing an entire program to control consistency and quality in our tire program. The efforts from everyone involved made the rollout process seamless, while building the foundation for a long-term partnership," said Bob Douglas, vice president of maintenance operations for Penske.

Cooper campaign puts new twist on mileage and grip

Taking a more humorous approach than its recent efforts, Cooper Tire & Rubber Co.’s new national advertising campaign kicked off in mid-March in conjunction with Cooper’s presenting sponsorship of the Bay Hill Golf Invitational. Featuring golf legend Arnold Palmer, the campaign is comprised of two 30-second spots and national print advertising.

The spots, developed by Cooper’s new advertising agency, Fahlgren Advertising & Communications, put a humorous twist on the treadwear and traction of Cooper tires, and reinforce Cooper’s core strategy of providing quality replacement tires at a fair price, according to the company.

"The new spots expand upon our positioning of the Cooper brand, which is a lot of value for the money," said Patricia Brown, vice president of advertising and communications. The campaign was designed to help broaden Cooper’s audience appeal.

While previous efforts have been centered around Palmer and golfing, this campaign takes Palmer’s name recognition and credibility and communicates product benefits in a unique manner, according to Brown.

Keystone opens new sales and training center

Keystone Automotive has opened a new sales and Training, Merchandising and Technology (TMT) center at its Exeter, Pa., headquarters. The 36,000-square-foot sales center includes space for over 200 salespeople and assistants. Included in the structure is the 2,200-square-foot TMT Center, a model store and training facility.

"This new sales center will allow our business to grow not only nationally, but globally, by providing top-notch support for our sales staff and, most of all, for the customers who have partnered with us for the past 29 years," said Phil Avvisato, Keystone’s vice president of sales.

Pro-Cut offering free brake lathes to students

For a limited time, Pro-Cut International is offering used manual on-car brake lathes to vocational schools that teach brake service. Interested vocational schools can receive a used model VBG620 Pro-Cut brake lathe for free, though they must purchase a two-adapter starter kit for $1,695.

Pro-Cut has donated equipment to other programs in the past, including inner-city efforts aimed at getting kids off the street and into productive careers. This is the Pro-Cut’s first offer to the vo-tech community.

Interested parties can call Seth Dunnett at 800-543-6618 or email [email protected]

Yokohama promo winner to take on Baja course

Yokohama Tire Corp., in conjunction with the introduction of its new Geolander A/T+ light truck/SUV radial, is offering one lucky consumer the chance to tackle the brutal Baja 1000 race course in Mexico.

The promotion, which runs through most of the first half of the year, is being supported by consumer magazine advertising and in-store point-of-sale materials.

Not only will there be a consumer grand prize winner — a five-day all-expenses paid trip and a run on the actual Baja course ®” but the dealer who provides the winning entry will also win the trip.

Additional prizes in the sweepstakes include sets of Geolander A/T+ tires and Yokohama apparel.

BFTS expands training seminar offering

Bridgestone/Firestone Tire Sales Co. (BFTS) has expanded the coverage and scope of its dealer-oriented instructional seminars. The company added several business management seminars, and will now offer a comprehensive package of educational programs at its distribution centers as well as at its Nashville headquarters.

Seminars cover sales and sales management, presentations, human resources issues, workplace management, price discounting, and recruiting and retention. For more information on the dates and locations of these seminars, contact Don Streiff, BFTS manager of training and development, at (800) 543-7522, ext. 3517.

Yokohama to build new distribution center in Virginia

Yokohama Tire Corp. will build a new 400,000-square-foot distribution center adjacent to its Salem, Va., manufacturing plant. The Fullerton, Calif.-based company is presently putting the finishing touches on another 400,000-square-foot distribution center in Georgia.

Utilizing some 7.5 acres of land the city of Salem has donated to Yokohama, the new distribution facility should be completed within two and a half years, pending necessary approvals, according to Yokohama. The new facility will allow Yokohama to provide more efficient order assembling and shipping in conjunction with its neighboring manufacturing plant.

Built in 1968 by the then Mohawk Rubber Co., the Salem plant has been expanded numerous times since Yokohama acquired it in 1989, and is now nearly one million square feet in size.

Standard & Poor’s lowers Goodyear’s ratings

Goodyear Tire & Rubber Co.’s corporate credit rating and its senior unsecured debt rating were both lowered to BBB+ from A- by Standard & Poor’s. At the same time, Goodyear’s A2 commercial paper rating and the A2 short-term corporate credit rating were affirmed.

According to Standard & Poor’s, the rating actions reflect Goodyear’s higher-than-expected debt usage and weaker-than-expected cash flow protection measures, and Standard & Poor’s expectation that challenging and competitive industry conditions will continue to depress debt protection measures in the near to intermediate term.

In recent months, Goodyear’s stock price has consistently hovered in the $20 to $24 range, reaching a low of just over $20 in early March.

Goodyear’s poor operating results in 1999 and a $915 million cash payment to Sumitomo Rubber Industries Ltd. contributed to a substantial increase in debt usage during the year and a significant deterioration in cash flow protection measures. At year end, the debt to capital ratio — adjusted to include accounts receivable sales and operating leases ®” was about 50 percent. Funds from operations to debt was about 17 percent for the year, according to Standard & Poor’s.

The revised ratings assume that Goodyear will generate improved financial measures during the next two years, that ongoing cost containment and efficiency improvement initiatives, as well as expected synergies from the alliance with Sumitomo, will lead to significant improvements in profitability and cash generation in the next two years, and that free cash flow will be applied to debt reduction, Standard & Poor’s said.

TRIB worldwide casing program a big hit

The Tire Retread Information Bureau (TRIB) has started a casing buy/sell referral program for its members. In the program, members furnish lists of casing/caps and casings they wish to buy or sell and TRIB puts out a memo listing this information to other members worldwide.

"We began receiving e-mails from all over the world, both from TRIB members and non-members, containing lists of casings they wanted to buy or sell. Once we started forwarding these lists to our members, the program caught on like wildfire," said Harvey Brodsky, TRIB’s managing director.

TRIB has a similar program for supplier members who wish to buy or sell new and used equipment worldwide. TRIB can be reached by e-mail: [email protected], telephone at (831) 372-1917 or by fax at (831) 372-9210.

Cooper opens new Iowa distribution center

Cooper Tire & Rubber Co.’s new 245,000-square-foot logistics center in Cedar Rapids, Iowa, began operation in late February, and has begun consolidating its older Chicago and Kansas City facilities into the new Midwestern center.

The new logistics center utilizes and latest warehousing technology and features 28 loading doors, according to Cooper. Employing 25 people, the center will handle all of Cooper’s flag and associated brands, as well as Pirelli-branded tires.

The opening of the new center and subsequent closing of two older facilities is part of Cooper’s previously announced plans to streamline its distribution operations. Mark Hefter, currently manager of the Chicago facility, will become warehouse manager for the new Cedar Rapids center.

Steelworkers and BFS open master contract talks

The long-anticipated contract renewal talks between Bridgestone/Firestone Inc. (BFS) and the United Steelworkers of America (USWA) opened in early March, with the USWA targeting a new contract with BFS as the pattern it will follow in negotiations with other tire companies this year.

BFS’ current contract with the USWA is scheduled to expire on Apr. 23, and covers some 8,000 workers at nine plants.

Both sides have stated they are looking for a swift, peaceful settlement. However, some in the industry have hinted that lingering bitterness over the last contract negotiations and potential concerns over BFS’ automation plans may result in protracted negotiations.

The last negotiations between BFS and a union representing its manufacturing workers resulted in the demise of the United Rubber Workers union, and a bitter 28-month strike that began in July 1994 and was finally resolved in December 1996.

Covered under these negotiations are BFS tire and tube plants in Akron, Ohio, Decatur, Ill., Des Moines, Iowa, Noblesville, Ind., Oklahoma City, Okla., Russellville, Ark., La Vergne, Tenn., Bloomington, Ill., and McMinnville, Tenn. The La Vergne plant was brought under the master contract following the strike. Separate agreements for the Bloomington off-the-road tire plant and the McMinnville radial truck tire plant expire at virtually the same time as the master contract.

According to the USWA, a number of other labor contracts with various tire companies end this year, including pacts covering Cooper’s Findlay, Ohio, El Dorado, Ark., Auburn, Ind., and Bowling Green, Ohio, facilities; Goodyear’s Brookpark, Ohio, logistics center and Jackson, Ohio, facility; Michelin’s Greenville, S.C. plant; and Goodyear’s recently acquired Dunlop plants in Buffalo, N.Y., and Huntsville, Ark. In addition, Goodyear and the USWA have scheduled wage reopeners for Goodyear’s Akron and Greensburg, Ohio, facilities.

Oil prices force CGT to hike tire prices

Citing rising raw material costs, Continental General Tire Inc. (CGT) increased prices on its passenger and light truck tires by 3 percent on April 1. The increase covers all Continental and General brand tires shipped to the replacement market, as well as all private brand tires the company produces.

"Process oil prices are rising almost every quarter, and costs for other key ingredients — synthetic rubber, carbon black, chemicals and reinforcements ®” increase along with crude oil prices," said Thomas Bruning, director of passenger/light truck replacement sales for CGT.

News of Note

The U.S. District Court in Cleveland, citing previous federal court rulings in the case, dismissed China Tire Holdings Ltd.’s suit against Goodyear, which alleged unfair business practices ®ƒ Treadco Inc. has promoted Fred Dickinson to regional vice president; Terry Lea to regional vice president — production; Randall Loyd to vice president ®” controller; Keith Martin to vice president ®” administration; Dave Moeller to regional vice president; and Bob Sell to vice president ®” strategic account sales ®ƒ Though it has no immediate plans to do so in North America, Pirelli S.p.A. will sell its specially designed P2500 direct to European consumers via the Internet from its Web site at ®ƒ Rent-A-Tire, owned by the nation’s largest chain of pawnshops, has opened its 40th location in Gretna, La., the first outside the company’s Texas base ®ƒ Thomas B. Roydhouse has been named senior director of replacement sales and marketing for Continental General Tire’s Commercial Division ®ƒ Toyo Tires (USA) has renewed its title sponsorship of the National Import Racing Assn. (NIRA) race series ®ƒ Bridgestone Australia Ltd. purchased Boral’s tire operations in Australia, an operation that includes Boral Tyres Pty. Ltd., Bandag Manufacturing Pty. Ltd. and Belltread Pty. Ltd. ®ƒ Alcoa Wheel Products International named Laurie M. Simpson as manager ®” product engineering for wheel products ®ƒ Yokohama Tire Corp. promoted Dan King to director of marketing and corporate sales for its consumer division ®ƒ Beck/Arnley Worldparts’ Electricat CD-ROM catalog won top honors in the Automotive International Association’s best new electronic parts catalog competition ®ƒ TBC Corp. named Earl Shaut to the newly created position of director of customer service ®ƒ John Fitzgerald has joined Nokian Tyres Inc. as regional manager ®ƒ Goodyear has named six finalists for its annual Highway Hero Award, which honors truck drivers who risked their lives to help others: Terry Harvey of Salt Lick, Ky., Floyd Miller of Irvine, Ky., Morris Holley of Baltimore, Md., Ronald McKee of Middletown, N.J., Jeffrey Wiles of Montpelier, Ohio, and John McDonald of Memphis, Tenn. ®ƒ Yokohama’s Salem, Va., passenger and light truck tire plant has received ISO9001 quality certification ®ƒ China Tire Holdings’ board has proposed changing the name of the company to China Tire Ltd. to "better reflect the future business strategy of the company in the emergence of electronic commerce" ®ƒ Cooper Tire & Rubber Co. named Michael Padula as factory manager for its Tupelo, Miss., facility, and promoted Brian P. Weibel to plant engineer at that location ®ƒ Elected to three-year terms on the Rubber Manufacturers Association (RMA) board of directors were Jefferson Keener Jr., president and CEO of Chardon Rubber Co.; Bernd Frangenberg, president and CEO of Continental General Tire Inc.; A.L. Stecklein, president of the Americas Gates for Gates Rubber Co.; Joe Zekowski, director of North American tire technology for Goodyear Tire & Rubber Co.; and Dan Ogden, president and COO of Yokohama Tire Corp. Roderick Millof, president of Cooper-Standard Automotive’s Global Sealing Division was elected to fill an unexpired term on the RMA board ®ƒ Bendix Brakes’ Import Quiet (IQ) brake pads received Popular Mechanics magazine’s Editor’s Choice Award ®ƒ Goodyear named former Pepsico vice president Eric Berg as its new chief information officer ®ƒ Cooper-Avon Tyres Ltd. is phasing out production of radial truck and bus tires at its Melksham, England, plant and plans to expand production of passenger, light truck, motorcycle and racing tires there ®ƒ Tire Industry Hall of Famer David H. Dean Sr., founder of Dean Tire & Rubber Co. and former head of the Private Brand Tire Group, died Feb. 8 at age 77 ®ƒ Federal-Mogul Corp. changed its mind and will retain its lighting, wiper blade and fuel businesses, which the company had previously put on the block ®ƒ TRIB Managing Director Harvey Brodsky will be the featured speaker at the Tire Maintenance Workshop at the North American Truck Show in Boston, on Friday, May 5 ®ƒ TBC Corp.’s Board of Directors elected William J. McCarthy, former president of stores and marketing for Montgomery Ward & Co., and Donald Ratajczak, a nationally known economist, to fill open positions on the board ®ƒ Goodyear Great Britain has been voted the top tire maker in the United Kingdom for the second straight year ®ƒ Honeywell Friction Mat-erials has named Anthony Stone vice president and general manager for its North American Aftermarket group ®ƒ Automechanika, the world’s largest automotive trade show with nearly 4,000 exhibitors, will be held in Frankfort, Germany, from Sept. 6-10, with show registration information available at ®ƒ named Dan Demchak as manager of supplier relations and business development, and Dave Sazama to systems administrator ®ƒ TRIB will be an exhibitor at the first Recycled Products Show, sponsored by the California Integrated Waste Management Board and the California Dept. of General Services, in Sacramento on May 10 ®ƒ Cooper appointed Roger Hendrikson to the position of director of investor relations, and promoted Debra Crow to corporate communications manager ®ƒ said it now serves more than 575 members in 44 countries, and currently lists in excess of $7 million in combined tire and wheel inventory ®ƒ Bridgestone/Firestone Inc. won two supplier awards from New United Motor Manufacturing Inc. ®ƒ Goodyear’s Next-Tred Innovative Retreading Solutions division has selected Technic Systems to manufacturer the exclusive K2 Tirescan ultrasonic soundwave-based non-destructive casing inspection system for its retreading franchisees ®ƒ Long troubled OTR tire maker United Tire & Rubber Co. Ltd., headquartered in Rexdale, Ontario, went into receivership Feb. 15 for the purpose of being sold, and has retained Ernst & Young Inc. to manage the sale ®ƒ After a five-year investigation, the U.S. Justice Dept. terminated without comment its extensive probe of alleged price fixing in the tire industry; Goodyear, Bridgestone/Firestone Inc., Continental General Tire Inc., Cooper Tire & Rubber Co., Dunlop Tire Corp. and Michelin North America Inc. had been subpoenaed in the case, which began in August 1995 ®ƒ Carlisle Companies Inc. created the office of the chairman and appointed Richmond McKinnish, president of Carlisle Tire and Wheel ®ƒ The city of San Francisco dropped its attempt to ban the sale of BFGoodrich Scorcher tires, reportedly accepting a promise by Michelin that it would clean up any colored skid marks left by Bay Area buyers ®ƒ Richard Kramer, formerly with PricewaterhouseCoopers, was named vice president of corporate finance by Goodyear ®ƒ Timken Co. made a number of corporate appointments: Richard Adams to vice president of automotive; T. Russell Pender to vice president of Latin America; Brent Dorman to vice president of Asia Pacific; Harold Ellis to vice president of manufacturing; Georges Lammoglia to vice president of order fulfillment; Gunnar Hasselmark to automotive group controller; and LeighAnne Baker to organizational development director ®ƒ Continental Teves has made a number of appointments for its North American operations: Donald Botka to vice president of Ford account management; Andre Cornet to vice president of finance; Joseph Gaus to vice president of foundation brakes; Kurt Lehmann to vice president of brake engineering; Mark Sowka to vice president of electronic brake systems; and Al Wellman to vice president of quality management ®ƒ For more information on these and other tire-, automotive- and commercial-related newstories, visit, the tire industry’s first and only up-to-the-minute news source …

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