Industry Report - Tire Review Magazine

Industry Report

RMA Cuts Support After Court Ruling Hopes for a tire industry checkoff program were dealt a couple of significant ®€“ potentially fatal ®€“ blows in late February after yet another court ruled that a popular checkoff program’s consumer education effort was unconstitutional, and the RMA withdrew support for the proposed program.

RMA Cuts Support After Court Ruling

Hopes for a tire industry checkoff program were dealt a couple of significant ®“ potentially fatal ®“ blows in late February after yet another court ruled that a popular checkoff program’s consumer education effort was unconstitutional, and the RMA withdrew support for the proposed program.

Despite those two setbacks, TIA continues to support the concept of a checkoff program, said Roy Littlefield, executive vice president. TIA executive committee held two special meetings in early March to "determine our next step," Littlefield said. "We understand the political issues involved, but we need to decide what is the best way to proceed."

On Feb. 24, the Third Circuit Court of Appeals in Philadelphia ruled that the familiar "Got Milk?" dairy promotion violates the First Amendment by forcing all farmers to pay for the ads, infringing on their "free speech and association rights."

Free speech questions also struck down two other familiar checkoff programs in the last nine months. Last July, a federal appeals court in St. Louis ruled that cattle ranchers should not be forced to pay a $1-per-head fee on cattle to support the "Beef: It’s What’s For Dinner" checkoff campaign. And, in October, an appeals court in Cincinnati ruled it was illegal to force pork producers to pay for the well known "Pork: The Other White Meat" marketing program.

In an interview the day after the dairy case verdict was announced, Don Shea, RMA president and CEO, told Tire Review, "RMA does not support or oppose the checkoff program. We want to raise several issues that must be answered before we can even consider such a program. First, and most important, is dealer support. If there is no dealer support, the whole deck of cards collapses. The second issue is the legal hurdle, and now we’ve got something concrete backing it up."

Just four days later in a special meeting Sunday, Feb. 29, the RMA Tire Group board voted 7-0 to withdraw support for the proposed tire checkoff program. Shea said the vote "was based on a lack of dealer support as voiced to our members by their key customers," and because of constitutionality issues surrounding checkoff programs.

Littlefield disputes the dealer support issue. "The dealers we talked to, once they understood the proposal, supported it," he said. "The problem is we were asked (by the RMA) to not promote the program or try to educate dealers until we had worked out all the details. As a result there were a lot of misconceptions in the industry that were not part of the equation.

"We could have overcome this if we had all worked together on this," Littlefield said. "We aren’t going to give up on this idea."

While Littlefield said TIA had not given up on the checkoff program idea, he admitted that the timetable for such a program ®“ which, as proposed, would focus on consumer education on tire care and value perception issues ®“ may have to be pushed back. The dealer association had hoped to have a firm legislative proposal in Congress this year, a deadline that now seems unlikely.

BFNAT Recalling Steeltex Units; Class Action Decision Delayed

Just hours after a California Superior Court postponed a hearing for an on-going suit alleging defects in its entire Firestone Steeltex line, Bridgestone/Firestone North American Tire (BFNAT) voluntarily recalled of some 297,000 Steeltex Radial A/T tires. Days later, NHTSA, which has twice cleared Steeltex tires of defect claims, said it had linked the recalled Steeltex Radial A/Ts with six tire-related accidents that killed five and injured 20 others.

BFNAT said the Feb. 26 recall announcement was unrelated to the 18-month-old court battle it has had with attorney Joseph Lisoni, who filed a class-action suit against the tiremaker in August 2002 claiming all Firestone Steeltex tires ®“ over 40 million units ®“ are seriously flawed and should be recalled. Lisoni’s petition to NHTSA seeking to have it reopen an investigation of the tires was refused last spring, and the recent hearing was supposed to determine whether his suit would be granted national class-action status.

BFNAT’s recall includes Steeltex Radial A/T tires in size LT265/75R16 load range D that were OE on 2000-2002 and some early-2003 Ford Excursions. In a statement, BFNAT said that "recent preliminary data reviewed as part of the company’s early warning system suggests that there could be an issue concerning the performance of these tires."

The tires were produced at BFNAT’s plant in Joliette, Quebec, from March 1999 through December 2002. The tiremaker is replacing the recalled units, now discontinued, with Steeltex Radial A/T tires in size LT265/75R16 load range E, and will also offer consumers other options including competing tires from Pirelli (Scorpion AT and Scorpion STR) and Michelin (BFGoodrich Rugged Trail TA).

Dan MacDonald, spokesman for BFNAT, said the recall was "not at all" related to the Lisoni suit. "It is a voluntary safety campaign. We found that, based on preliminary data, there was a potential issue with these tires, and to avoid future problems, we decided to take action and replace the tires," he said.

MacDonald said the recall involves only one Steeltex tire and not the entire line of 41 million Steeltex tires produced. "Lisoni wants all Steeltex tires recalled," said MacDonald. "There are 103 different types that follow 300 different specifications."

In a press release, Lisoni said there are about 30 million Steeltex tires on the road, including OE fitments on emergency vehicles, large pickups and RVs. He claimed to receive daily reports of people being injured or suffering property damage caused by tread separation on the Steeltex tires.

"Given that 71 vehicles now come factory equipped with Steeltex tires and 34 states have already reported tread separations on their ambulances and other emergency recovery vehicles, this will probably be the largest class action lawsuit in the history of the United States," Lisoni said in the release.

MacDonald admitted there have been three accidents involving Steeltex tires that resulted in five deaths. But, he also pointed out that, in two of those cases, the tires had been overloaded and underinflated.

Counteract Offers Fleets Free Balance Product to Test Fuel Efficiency

Counterbalance Balancing Beads is giving truck fleets an opportunity to conduct fuel efficiency testing on its product free of charge. The Georgetown, Ontario, firm claims its in-the-tire balancing product will improve a truck fleet’s fuel efficiency, and will provide free product to any 100+ truck fleet willing to conduct an evaluation.

According to Roger LeBlanc, president of Counteract, in order to qualify, a fleet must have approximately 100 trucks with "designated runs utilizing the same tractor or trailer or straight truck," and must already be keeping fuel records. Counteract will supply "enough product to balance all tire/wheel assemblies on a number of trucks that would be sufficient for the truck fleet to have a significant fuel evaluation test to compare with other trucks that only have steering tires balanced," he said.

If a test fleet is "completely satisfied," said LeBlanc, then the fleet would be asked to pay for the product on the honor system ®“ $14 per tire ($20 Canadian) or 5% of "what we save them in fuel usage, tire life improvement and reduced freight damage and mechanical repair," LeBlanc said.


In our story about Toyo Tire & Rubber Co. building a new plant in the U.S. (Feb. 2004, page 10) we erroneously stated that Bridgestone Corp. was the only other Japan-based tiremaker with a U.S. plant. Yokohama Rubber Co. Ltd. acquired Mohawk Rubber Co. in 1987, assuming control of Mohawk’s plant in Salem, Va. TR

Residents File SUit to Halt Planned Toyo Plant

Residents in Bartow County, Ga., upset over a rezoning move that would allow Toyo Tire & Rubber Co. to build a $150 million passenger and light truck/SUV tire plant there, filed suit against county officials Mar. 8, action that might chase the tiremaker away.

Trouble had been brewing in the county, located north of Atlanta, since Toyo first began investigating the area. Bartow County Commissioner Clarence Brown, who was named in the suit, according to the Associated Press, has been savaged in the local media by residents after he approved rezoning a 250-acre parcel to allow the tire plant.

The suit, according to AP reports, names Brown, the six-member county industrial development authority, and the owners of the property. The suit alleges that Brown operated outside his authority, that the rezoning application filed by the property owners is invalid, and that the tire plant would lower property values.

Toyo has looked at a number of sites in northern Georgia, according to a spokesman, and preferred the Bartow County site due to its location and other factors. However, Toyo has not committed to purchasing any land as yet, and could abandon the Bartow site for another location.

The plant, with the capacity to produce some two million tires per year, would employ 250 people.

Goodyear Avoids Union Mess with Assurance-s

Goodyear Tire & Rubber Co. averted what could have been a disastrous standoff with the United Steelworkers of America (USWA) over alleged violations of its new collective bargaining agreement when it announced Mar. 3 that it would expand production of its new Assurance line to USWA represented plants.

When it launched the Assurance line in early February, Goodyear said the new line would be produced only at its non-union plant in Lawton, Okla. The union, however, pointed out that as part of the job protection provisions of the three-year master contract signed last September, the tiremaker is required to give USWA represented plants "meaningful and significant first consideration and preference" to produce new products provided the unionized plants had the capacity and technology necessary "without incurring a materially greater level of capital expenditures."

Goodyear initially responded to the USWA complaint that "The decision to source this product from Lawton is in complete compliance with our labor agreement," but changed its mind a few days later and said it would expand production to its Gadsden, Ala., plant. The company said that heavy early demand for the line allowed for the expansion.

Cooper Outsources More Production to Chinese Tiremaker

Continuing its reshuffling moves to expand high performance tire production at its U.S. plants, Cooper Tire & Rubber Co. will outsource some one million radial passenger units to Chinese tiremaker Hangzhou Zhongce Rubber Co. for sale in the U.S. Meanwhile, in a separate move, Cooper said it would spend $1.8 million to expand capacity at its flagship Findlay, Ohio, plant. Cooper said the Findlay expansion would add 30 jobs and boost annual tire capacity by 500,000 units.

Under the outsourcing agreement, Hangzhou will produce six sizes of an entry-level line under the Cooper, Mastercraft, Dean and Starfire brands at its ISO 9001-certified plant in Hangzhou, China. The tires will be produced to Cooper specifications and quality standards specifically for the North American market, and should be available in the third quarter of 2004.

The outsourcing agreement and Findlay expansion will help Cooper devote greater production capacity to "more exotic performance tires," according to Dick Stephens, president of Cooper’s Tire Group. "Our UHP initiative has resulted in a steadily increasing demand for the Cooper Zeon performance lines. We have increased capacity at all of our U.S. plants, and these tires from Hangzhou will help fill in the gap between our capacity and projected demand."

Under a deal signed last October, Hangzhou is producing Cooper branded medium truck radials, previously made at Cooper’s Albany, Ga., plant. The Albany facility is adding passenger capacity to replace truck tire production. Cooper is also expanding capacity at its Texarkana, Ark., and Tupelo, Miss., plants, part of a $34 million capital program that will boost its total capacity by three million tires.


The 2004 Aftermarket eForum will be held Aug. 2-4 in Chicago, sponsored by t he Automotive Aftermarket Industry Association.

Longtime Firestone sales executive Bill Tierney, 82, died Feb. 10.

USWA won the right to represent workers at Goodyear’s tire mold plant in Statesville, N.C., the first Goodyear plant organized under a neutrality agreement included the 2003 Goodyear-USWA labor pact.

Former Continental Tire North America exec Jim Mayfield joined Del-Nat Tire Corp. as vice president of marketing, replacing Dennis Cates.

Alcoa Forged Specialty Wheels signed on as national sponsor of the ProROCK 2004 Superlift National Series and Superlift Women’s National Rockcrawling Championship.

Bandag Inc. acquired an 87.5% majority interest in Speedco Inc., and will operate Speedco as an independent business unit.

Bridgestone/Firestone North American Tire and Michelin North America joined the EPA’s SmartWay Transport Partnership, a national initiative to reduce emissions from commercial trucking.

Briggs & Sons Tire was named Business of the Year by the Fayetteville, N.C., Chamber of Commerce.

Continental AG is evaluating sites in Brazil and the Baltic countries for a new tire plant, which would produce 5 to 8 million units annually.

Helmut Werner, the former chairman of Continental AG and Mercedes-Benz AG, died Feb. 6 in Berlin at age 67.

Cooper Tire & Rubber Co.’s Cooper-Standard Automotive group signed a technical assistance agreement with Daekyung Chemical Corp. of South Korea, which will provide design and engineering support for engine mount systems on three future Hyundai and Kia vehicle platforms.

Tire Treads Inc. in Jackson, Tenn., has become latest Marangoni Tread North America Ringtread retreader.

Shipments of tread rubber improved markedly in the second half of 2003, according to the RMA, and produced some 16 million retreaded tires for the year.

Walker Exhaust ‘s spring promotion enables dealers to earn $25 gift cards, be entered into weekly $500 cash giveaways and win a home theater system.

Monro Muffler Brake acquired 36 Mr. Tire Inc. locations in Maryland and Virginia.

Jack Williams Tire Co., based in Scranton, Pa., expanded its high performance tire, wheel and accessory market with the acquisition of Auto Addictions in Allentown. The new location, renamed Jack Williams Auto Addictions, is the dealer’s 23rd store, and second dedicated performance location.

Kumho Tire Co. is building a $130 million tire plant in China, adjacent to its existing Nanjing plant, doubling its annual production capacity in China to 10 million units by 2008. The project will aid Nanjing Kumho Tire Co. with its goal to gain a 25% share of the passenger radial market in China.

Mexico City’s Mil Neumaticos Solucion, S.A. has signed on as the third Michelin Retread Technologies franchise in Mexico.

Cooper Tire & Rubber and the USWA signed a new, five-year contract covering approximately 880 active employees and 600 retirees at Cooper’s Findlay, Ohio, plant.

Myers Industries will acquire the stock of Michigan Rubber Products and WEK Industries, which had combined net sales of approximately $60 million in 2003.

Sumitomo subsidiary Falken Tire Trading has instituted 3% to 5% price increases on its passenger, light truck, truck and bus tire exports to North America, Latin America, Southeast Asia, the Middle East and Africa.

Thanks to continuing growth, O.K. Tire Stores moved to new warehouses in Regina and Saskatoon, Saskatchewan, and plans to expand its warehouses in Quebec and Ontario.

Nokian Tyres has launched the Hakkapeliitta RSi, a new studless winter tire that will be available this fall, to replace the Hakkapeliitta Q.

RMA voiced opposition to proposed legislation that would require all tires sold in Vermont to be marked in order to identify them once scrapped.

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