Hardball Time Again
USWA Says BAH Offer An ‘Outrage and Insult’
Master contract talks between Bridgestone Americas Holding (BAH) and the United Steelworkers of America (USWA) shattered Nov. 13 after union negotiators walked out of a bargaining meeting claiming the company’s contract proposal was "so far off the mark" and setting the stage for a possible strike at BAH tire plants across North America.
Union negotiators say BAH wants substantial concessions on pensions and health-care costs, as well as work rule, seniority and other benefit changes. BAH told the USWA on Oct. 27, according to the union, that it would not follow the agreement settled with Goodyear, even though BAH had earlier stated that it would follow the pattern contract.
"We informed the company that as long as their proposal remains, there’s no way we’re going to come to the bargaining table," USWA spokesman Wayne Ranick told Reuters. "It is so far off the mark." At press time, USWA was considering its options, which include calling for a strike.
BAH said that it needs a contract that allows it to remain "competitive," expressed disappointment that the union walked out on the talks and said it was ready to return to the bargaining table "whenever the union leadership is prepared to deal with the hard issues facing both of us."
In a statement issued Nov. 14, the USWA said the consensus of its negotiating team was that BAH’s offer "was an outrage and insult to all our members," and that no new talks would be held until BAH "indicates a readiness to engage in serious bargaining."
The statement continued, "It is apparent the company is bent on ‘breaking the pattern’ (agreement) and (is) attempting to impose severe concessions on our members. Accordingly, we informed the company that no progress can be made until this ‘offer’ is off the table. The company responded by stating that the ball was in our court, since they made the last offer."
The previous three-year contract between BAH and its largest union ®“ which represents some 6,000 workers at eight organized facilities ®“ expired Apr. 23, but the old contract was extended on a day-to-day basis until a new pact is settled. That temporary agreement could be ended with five days notice by either side.
Michelin North America, next to negotiate with the Steelworkers, has remained silent on both the Goodyear deal and the current BAH situation.
Goodyear Posts $106 Million Loss for Quarter, Faces Shareholder Suits
At press time, Goodyear Tire & Rubber Co., reeling from having to restate five years of financial results, posted a $106 million loss for the third quarter of the year. In a Nov. 17 SEC filing, Goodyear said that it has lost between $310 million and $335 million through the first three-quarters of the year.
There was no word whether the tiremaker was taking a charge related to closing its Huntsville, Ala., tire plant, or any charges related to its late October announcement that it would have to restate financial reports dating back to 1998 to reflect an additional $100-plus million in losses.
More than 30 law firms filed class action lawsuits against the tiremaker and company officers since Goodyear’s restatement announcement. Filed predominately in federal court, the suits charge that the incorrect earnings information artificially boosted Goodyear share prices, thereby diluting shareholder value. The suits seek unspecified damages for all people who purchased or owned Goodyear stock from October 1998 through October 2003.
While most financial analysts did not feel the restatement would be a major issue among investors, some felt Goodyear’s credibility in the financial community and among its customers suffered another blow.
At first Goodyear blamed a software error for the $100 million mistake, then said the errors were caused by internal systems and problems integrating a new software system in 1999.
New Fuzion Brand Focused Directly on Tuner Market, Says BFNAT
With one eye on the growing tuner market and the other on independent tire dealers, Bridgestone/Firestone North American Tire (BFNAT) made news in Las Vegas with the launch of an all new tire brand ®“ Fuzion ®“ a line targeting what it calls "the fastest growing segment of the ultra-high performance tire market."
"We are excited about the new Fuzion brand," said Phil Pacsi, BFNAT executive director of consumer tire brand marketing, who said Fuzion will be marketed as one of the company’s associate brands. "With great looks and optimum handling, this is our first tire designed specifically to appeal to the tuner market segment."
The new W- V- and H-speed rated Fuzion ZRi features a directional tread pattern and the company’s patented UNI-T technology for good handling and stability, BFNAT said. The tire will be available in the spring of 2004 in some 30 different 16- to 20-inch sizes, covering 30- to 60-series profiles.
BFNAT said the tire launch is being backed by a major marketing initiative, including a new Web site ®“ www.thefuzionzone.com.
Another piece of the marketing push will be centered around BFNAT’s Fuzion Honda Civic project car. Built under the direction of Robert Wilson of Modern Image Signworks, in Huntington Beach, Calif., the Fuzion Civic will serve as a showcase for the new UHP brand.
Conceived as a "super-trick street ride," the Civic features an array of body, engine, performance and custom interior enhancements. The car will be made available to automotive enthusiast and performance editors for photography and feature story opportunities, and will be exhibited at a host of BFNAT events, including product launches, media days and appearances at automotive lifestyle shows.
New BFGoodrich Traction T/A Will Replace Seven Different Lines
Michelin North America’s BFGoodrich Tires unit is adding one big T/A to its popular performance tire line, replacing seven other T/A lines.
Designed for touring and sports car drivers, the new all-season BFG Traction T/A will replace the Comp T/A VR4, Comp T/A HR4, Touring T/A VR4, Touring T/A HR4, Touring T/A TR4, Touring T/A SR4 and the Control T/A M80 lines.
The new line delivers enhanced wet and dry traction, responsive handling and long treadlife, said the company. Originally introduced in 2000 as the spec tire for the American Speed Association race series, the Traction T/A has been reengineered as a street-ready, all-season tire for the mass market.
BFG said the Traction T/A is being offered in T- H- and V- speed ratings in 15-, 16- and 17-inch sizes in the replacement channel. The Traction T/A H- and V- rated tires come with a 60,000-mile warranty, while the T-rated version is covered by a 70,000-mile warranty.
Safety Groups Challenge NHTSA on Public Access to Safety Data
Using the TREAD Act and the Freedom of Information Act as wedges, several consumer groups are challenging new federal rules limiting public access to information reported to the government about potential safety problems.
A petition filed by the Center for Auto Safety, Advocates for Highway and Auto Safety and the Trauma Foundation argued that NHTSA’s decision to keep confidential TREAD Act-mandated warranty, defect and repair data from auto and tire companies violates the Freedom of Information Act and is counter to the intent of the TREAD Act.
Consumer groups say the TREAD Act was meant to ensure that NHTSA and the public had access to safety information sooner. Instead, the groups argue, NHTSA’s confidentiality policy will keep from the public the kind of information that eventually led to the massive Bridgestone/Firestone recall in August 2000.
Under NHTSA’s current policy, the agency is bound to treat company data about warranty claims, consumer complaints and internal investigations into possible defects as confidential business information. Only injury and fatality counts will be made public.
Manufacturers’ first reports are due to NHTSA on Dec. 1. TR
ACCC Signs 1,100 locations to TIA membership rolls
American Car Care Centers (ACCC) has formed a strategic partnership with the Tire Industry Association (TIA) that will result in all ACCC member dealers becoming active TIA members. The new partnership "begins with a three-year TIA membership for all 1,100 ACCC locations and will include support of TIA’s newly developed Basic Automotive Tire Service (ATS) educational program," according to ACCC officials.
Efforts to bring the two groups together began at last year’s ITE/SEMA Show in Las Vegas, according to ACCC President and COO Len Lewin. Since those initial discussions there was a "tremendous behind the scenes effort" by both organizations, he said.
The central focus of the talks, Lewin noted, were on TIA’s ATS training program, which will address the needs ACCC dealers have for basic tire technician training. "We looked at numerous options and considered developing a training program on our own," said Lewin. "We came to the conclusion that TIA offered the best overall solution."
Each ACCC dealer will have access to all the programs that TIA offers, and each location will receive a subscription to TIA’s Today’s Tire Industry publication. ACCC dealers will also benefit from TIA’s legislative efforts.
Tighter NR Supplies Mean Higher Prices are Coming
Unless someone finds a way to grow rubber trees in North America and soon, you can plan on seeing higher tire prices through at least 2004. A tight supply of natural rubber and a wildly escalating demand for tires in China and the rest of Asia are the twin culprits in this scenario. No surprise that natural rubber prices are expected to continue climbing in concert with projected increases in demand.
Meanwhile, a World Trade Organization (WTO) ruling on Nov. 10 that U.S. tariffs on imported steel are illegal may give tiremakers a little relief. The Bush Administration’s tariff system, designed to aid U.S. steel makers, has cost the domestic auto and tire industries millions. Some tiremakers in the U.S. import steel wire used in tire production.
Imposed in March 2002, the U.S. tariff program has driven up steel prices, adding costs to already fragile auto, auto part and tire production profits.
How much will natural rubber prices increase? According to a Reuter’s report, China’s growing economy and attendant demand for vehicles will cause natural rubber prices to jump from $1 per kilogram (2.2 pounds) this year to $2 per kilogram in 2004. Another news source, the Economist Intelligence Unit, says natural rubber prices will increase by more than 30% this year vs. 2002 and will be followed by increases of nearly 10% in each of the next two years.
The EIU said China’s first half 2003 natural rubber imports stood at 580,000 tons, 56% above their reporting level for the same period in 2002.
"World consumption of natural rubber could jump 50% to 27 million tons by 2020," said Reuters. Without a major increase in natural rubber production capacity, rubber prices could continue escalating. Experts said the current tight supply has been caused by a lack of rubber tree replanting and lack of land in many countries for rubber tree forests.
Calif. OKs Replacement Tire Fuel Efficiency Standards
Californians may fondly recall the days when replacement tires were cheaper and easier to get. In early September, the California legislature passed a bill requiring that replacement tires sold in the state be, on average, at least as energy efficient as OE tires.
The new law requires the State Energy Resources Conservation and Development Commission to implement replacement tire energy efficiency standards by July 2008. However, the new standards, according to the law, which passed easily through the House and Senate, must "be technically feasible and cost effective, not adversely affect tire safety" and "not adversely affect the average tire life of replacement tires."
The law may force tiremakers to provide testing services to the state, as well as test their own tires to assure they meet still-to-be-determined standards.
Industry officials are keeping a close eye on the developments in California, especially after U.S. Senator Charles Schumer (D-NY) attempted in July to add a tire fuel efficiency amendment to a pending energy bill. Schumer’s efforts failed when the Senate adopted a different energy bill.
Groupe Michelin, TRW Form Global TPMS Joint Venture
Groupe Michelin and TRW Automotive announced a joint venture to bring advanced tire pressure monitoring systems (TPMS) to market world wide. The new joint venture, EnTire Solutions LLC, will focus on direct TPMS for passenger cars and light trucks.
EnTire Solution employs a battery-powered pressure sensor mounted on the valve stem inside the wheel. The sensor transmits tire pressure and temperature information to a vehicle-mounted receiver via a radio signal.
According to Michelin, OE customers may choose between two direct systems, one that delivers detailed inflation data to the driver, and another that providesan underinflation warning.
Based in the U.S., the joint venture will be led by Richard Wolfe, a long-time TRW executive, now CEO of the new company. "EnTire Solutions is well positioned to be the technology leader in TPMS," said Wolfe. "With Michelin’s expertise in tires, wheels and suspension systems and TRW’s expertise in integrated safety systems, radio-communications and electronics, the joint venture is an attractive package to prospective customers."
According to EnTire Solutions, several OEMs in Asia, North America and Europe have already selected it as a supplier. In fact, the first systems are currently being shipped to customers in Canada for introduction into the U.S. market this year.
Bridgestone/Firestone North American Tire and Paccar signed a new "long-term" global supply deal in which Bridgestone brand radials will continue as standard OE on Kenworth, Peterbilt and other Paccar vehicles.
Pro-Cut International and Hunter Engineering settled their legal dispute over on-car brake lathe patents; as a result Hunter will exit the market for automatic compensating on-car brake lathes.
Amerityre Corp. received notice that its U.S. patent application for its "Run Flat Tire with an Elastomeric Inner Support" has been allowed with 11 claims.
Yokohama Rubber Co. has advanced by two years its expansion plans for its Hangzhou Yokohama Tire Co. joint venture and will boost capacity to 1.4 million units annually in 2004.
Michelin’s Uniroyal brand was named the official tire of the Professional Bowlers Association, and will serve as the title sponsor of the PBA Uniroyal Classic, May 3-7, 2004, in Indianapolis.
Bridgestone Corp. resumed partial production at its plant in Tochigi, Japan, which was heavily damaged by an early September fire. The fire caused an estimated $360 million in direct and indirect damage and costs.
Bridgestone Motorsport made a $10,000 donation to the "Race for Relief" effort, a disaster relief initiative to benefit those affected by the wildfires in Southern California.
In early November, Canada’s Competition Bureau accused Sears Canada of false advertising of prices on five tire lines.
China’s Cheng Shin-Toyo Tire & Rubber Co. made a "multi-million dollar" purchase of tire testing equipment from MTS Systems Corp.
For the fourth straight year, Michelin ranked highest in customer satisfaction in J.D. Power & Associates annual replacement car and light truck consumer surveys.
Continental AG is spending some $85 million to build a new high performance tire plant near its existing Barum Continental SRO plant in the Czech Republic. Meanwhile, Conti took controlling interest in Malasyia’s Sime Darby Berhad and plans to source tires for North America and Europe from the plant.
Continental Tire North America is also supplying OE tires for the Ford F150 pickup, Continental ContiTrac in size P255/65R17, General AmeriTrac in size P255/70R17 and General AmeriTrac in size LT245/70R17.
Longtime TIA staffer John Buettner was honored by the association at the recent ITE/SEMA Show for his 20 years of service.
Bridgestone/Firestone and Ford recently settled nearly 100 Explorer rollover lawsuits from South America.
GM is voluntarily replacing some 88,000 Goodyear Eagle RSA tires on Cadillac CTS cars due to "cosmetic" sidewall cracking concerns.
Goodyear is ending conveyor belt production at its Bowmanville, Ontario, plant, but will continue producing rubber compounds there for other Goodyear operations.
Dean Clark of Tire Express in Arroyo Grande, Calif., and Jerry Veal of Busy Bee Used Cars in Sandersville, Ga., were the top winners in American Tire Distributors’ second HeafNet Rewards Million points sweepstakes.
Les Schwab Tire Centers ranked highest in J.D. Power & Associates consumer survey of tire retail customers, its fourth straight win. Schwab was followed, in order, by Discount Tire, Big O Tires, Goodyear Auto Centers, NTB and Price Club/Costco.
Getting an early start on the new year, Michelin North America said it will hike prices on "select" Michelin, BFGoodrich, Uniroyal and private and associate brand passenger and light truck/SUV replacement tires by up to 5% starting Feb. 1, 2004.
Maxxis International was named one of "Taiwan’s Top 10 Global Brands" for 2003 by Interbrand.
Due to scheduling conflicts, TRIB was forced to cancel its annual membership meeting slated during the recent ITE/SEMA Show. It will be rescheduled. As of Nov. 1, TRIB reported having 389 members in 27 countries, and continues its membership push.
Tire Kingdom Inc. moved into its new 45,000-square-foot Juno Beach, Fla., headquarters Oct. 20.
All 1,900 Midas locations in North America now offer Bridgestone and Firestone brand tires thanks to a new deal its has with Bridgestone/Firestone North American Tire that will route the tires through BFNAT’s dealer network.
Consumers buying Cooper Zeon 2XS or Zeon XST tires through Dec. 31 will earn an $80 gift certificate from Omaha Steaks.
Bridgestone/Firestone North American Tire launched Winterforce, a new studdable associate brand winter tire line, with 33 sizes in 13- through 16-inch wheel diameters.
RMA has set Apr. 25-May 1, 2004 for the third annual National Tire Safety Week; some 4,000 retail tire locations participated in 2003.
TABS added MechanicNet’s Customer Retention Systems as an integrated third-party application to its AutoBiz software.
O.K. Tire Stores and Castrol donated $19,000 to Child Find BC, a non-profit that assists the families of missing children.
T.O. Haas Tire was ranked "Best Tire Store" in the Best of Lincoln (Neb.) contest sponsored by a local radio station.
SmarTire launched two new TPMS products ®“ RoadVoice and TrailerVoice ®“ for the RV/towed vehicle market, signed a co-development and marketing deal with Haldex for Class 7-8 trucks and trailers, and signed a joint development deal with Vansco.