Industry Report - Tire Review Magazine

Industry Report

Cooperative e-ventureSix Tire Giants Join Forces to Create Cost-Saving Internet Exchange

Cooperative e-venture

Six Tire Giants Join Forces to Create Cost-Saving Internet Exchange

The Internet continues to make the tire world smaller. Now it has pulled together six of the world’s largest tire companies in a joint venture project to develop a global purchasing and procurement marketplace.
The independent joint venture company — named ®” was created by a unique consortium of Continental, Cooper, Goodyear, Michelin, Pirelli and Sumitomo Rubber Industries.
According to the participants, will host a global exchange that will enable members “to increase the efficiency of their operations and to achieve substantial savings in the cost of doing business.”
According to Chris Aked, a Goodyear spokesman who has worked extensively on the formation of the joint venture company, is not just for the tire makers, but also for their suppliers. “This is an industry that spent over $50 billion on raw materials, equipment, machinery, goods and services,” he said. ®This exchange is intended to achieve substantial savings in the cost of doing business, and will improve the quality of service for large and small companies alike.®
The joint venture company was developed “on a smaller scale” by the six tire companies with the ®hopes other tire and rubber companies would join in over time,® said Aked.
The firewall-protected exchange will be open to all tire and rubber manufacturers and suppliers. Aked said the joint venture company is working to finalize all necessary arrangements, and is expected to be operating before the end of the year.

BFS, USWA agree to day-to-day contract extension

In a move that may alleviate a chance of another strike and herald a new level of cooperation, the United Steelworkers of America (USWA) and Bridgestone/Firestone Inc. (BFS) have mutually agreed to extend their master contract on a day-to-day basis. The announcement was made Apr. 19, and the existing master contract was due to expire on Apr. 23.
Negotiations on a new multi-year contract started earlier this year, and sources have indicated that they have progressed smoothly. However, according to both the USWA and BFS, either party may terminate the extension with 14-day notice.
The USWA and BFS began contract talks in early March. The union is seeking a pattern agreement on wages, pensions and working conditions for its more than 8,000 members at nine BFS plants in the U.S.
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.

E-commerce comes to the commercial tire market

Created by a tire dealer for tire dealers, the recently launched e-commerce Web site promises to “streamline the process of locating, purchasing and acquiring new and retreaded truck tires” for North American independent dealers and distributors.
Headquartered in Northbrook, Ill., was founded last December, and the site went live Apr. 21. According to co-founder and president Marc Imyak, the new site “offers an innovative approach to the dealers and distributors that will minimize the time, labor and shipping costs of acquiring a tire, thereby maximizing the profitability of their businesses.”
No stranger to the tire industry, Imyak, 34, founded City Tire in Chicago in 1987, and his father worked in the tire industry for over 45 years. And’s Board of Advisors includes Dan Sickafoose, president of Chicago Bandag, and Jordan Feiger, vice president and general manager of International Truck and Engine Corp.
The site allows members to access available inventory that’s been posted, post inventory they want to move, place a request for certain tires, track the market, and oversee their own purchases. Purchases are made via a straight sale or by auction, and postings are anonymous until a transaction is agreed to, at which time buyer and seller are  revealed to one another to allow coordination of payment and delivery/pickup.
According to Imyak, the real time visibility of inventory allows manufacturers, dealers and distributors better align their inventories with customer demand, according to the company. In addition, also provides market reports on pricing, market forecasting, product movement and unfilled inventory.
Membership to is free, and interested dealers or distributors can sign up by logging on to the site and providing profile information. Those selling products through the site will pay a 3 percent fee per transaction, according to the company.
One special feature is Bud-e Net, a section in which members can specify companies with which they already have an established business relationship and search for product within that designated network first.
The Bud-e Net is set up for each individual based on a list of contacts sent in by the member at the time of registration, said the company, and new parties may be added at any time. When a member searches for a particular truck tire, his preferred suppliers are highlighted.
For more information, visit the Web site at or call (888) 604-9800.

Kumho breaks ground for new Akron tech center

Needing a larger facility, Kumho Tire USA Inc. has broken ground for a new technical center in the Akron, Ohio, suburb of Fairlawn. At a cost of $4 million, the new facility, slated to be completed around early 2001.
The new 20,380-square-foot tech center will replace the company’s current 6,000-square-foot leased facility, and will employ 45.
“We would like this day to be known as the date Kumho drives a stake into establishing a research and development center,” said Guy Edington, managing director of Kumho’s Technical Center, during the Apr. 17 groundbreaking event. ®Let what is built on this site speak to Kumho’s commitment to the North American tire market, and let us commemorate this day as a new beginning for Kumho Tire.®
A second phase of the building will be built on the nine-acre site within three years, providing an additional 30,000 square feet and adding 35 employees. “Our old facility doesn’t give us the ability to do any testing. Now, we’ll be able to validate our ideas,” said Edington.
The new facility will include labs for testing materials and compounds, noise and vibration, in addition to product development testing.

Dunlop helps make Goodyear’s first quarter

Goodyear Tire & Rubber Co.’s annual shareholders meeting Apr. 10 was a rather quiet affair, but it appeared to do the trick as the company’s stock value increased over $3 the following day to reach a 2000 high of $29 per share. And even a first quarter financial report, released two days later, that showed only modest tire sales increases didn’t diminish investor spirits as stock prices remained in the $28-$29 neighborhood a week later.
In fact, the addition of Dunlop tire sales to Goodyear’s mix contributed substantially to the improved first quarter results. Goodyear reported first quarter worldwide sales of $3.5 billion, up $500 million from 1999’s first quarter results. The company said Dunlop operations contributed “almost $577 million in sales” for the quarter. Tire unit sales were 54.8 million units, up 9.1 million tires over the first quarter of 1999. Again, Dunlop contributed heavily, with Dunlop tire sales hitting 8.9 million units.
Goodyear reported worldwide net income of $63.6 million for the first quarter of 2000, citing improved performance by its North American and Latin American tire groups, as well as by its global Engineered Products unit. Net income for the same period last year was $25.5 million, which included $116 million in after-tax charges.
Goodyear’s North American Tire group posted sales of $1.65 billion for the quarter, up from $1.51 billion last year. Operating income, however, dropped $20 million, from $91.7 million in the first quarter of 1999 to $71.6 million this year. The decreases, said the company, were due to “higher raw material costs and a less-favorable product mix.”

Sears, NTB pick up Continental General lines

Continental General Tire Inc. and Sears, Roebuck & Co. signed a multi-year deal that puts General and Continental branded passenger and light truck lines in more than 1,100 Sears and NTB stores nationwide.
By the end of May, some 800 Sears stores will stock General Ameri*SE and Ameri*TE radials, and 350 Sears-owned NTB locations will carry Continental Contact, Continental TouringContact AS and General Grabber ST lines.

Promo takes Michelin buyers on ‘Road to Adventure’

Michelin North America’s spring promotion — Road to Adventure ®” gives Michelin brand dealers the opportunity to take their customers for a ride ®” figuratively speaking, of course.
Consumers buying a set of four Michelin passenger or light truck/SUV radials will receive a $75 complete car cleaning kit, according to the tire maker.
In addition, consumers can enter a national sweepstakes, the grand prize for which is a all-expenses paid vacation trip — hiking in New Zealand, kayaking in Thailand, white water rafting in Costa Rica, or surfing in Australia. No purchase is necessary to enter the sweepstakes, but all entries must be made at Michelin dealer locations. Secondary prizes in the sweepstakes include vacation trips in the U.S. and a selection of outdoor gear.

Falken adds HP LT/SUV  model, sizes to FK-451 line

Extending its reach into the high performance light truck/SUV tire segment, Falken Tire Corp.’s new Ziex S/TZ-01 was developed specifically for “for the demanding style and performance needs” of sport trucks and SUVs. The new Ziez S/TZ-01 is available in a range of 17-, 18-, 19- and 20-inch sizes and aspect ratios of 45, 50, 55 and 60.
According to Falken, the Ziex S/TZ-01 provide solid wet and dry traction, precise handling, and is durable enough to handle heavier vehicles.
Falken has also 26 new sizes to its FK-451 ultra high performance line. Part of Falken’s GRBeta line, the Z-rated FK-451 features a silica-based tread compound for traction and long wear and a rim protection ridge to help prevent damage, and comes with an AA UTQG traction rating. reaches 1,000-member plateau, an online exchange for tire and wheel inventory, has registered more than 1,000 members, and anticipates having some 1,500 trading members by May. The Web-based service was launched last November at the International Tire Expo in Las Vegas, and has steadily grown, according to Latherine Bailey, director of member services.
“We couldn’t be more pleased with the speed at which our membership is growing, particularly because so many of our new members are being referred to us by older members,” she said.
The company said it currently lists some $11 million in live inventory. Designed for tire dealers, members can post available tire and wheel inventories for sale of trade with other members.

Bridgestone, Topay develop vibration absorbing wheel

Bridgestone Corp. and Topay Industries have developed a new automobile wheel that reduces vibration and road noise, and helps improve vehicle handling. The prototype wheel, which features a layer of specialized rubber between the wheel’s rim and disk, will not immediately be available on the market.
Metal-to-metal construction wheels convey road-surface bumps directly to the vehicle as noise and vibration. The addition of a rubber layer, according to the companies, absorbs those vibrations, reducing  noise and promoting a smoother ride.

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