New news from ATC is posted on its Web site, which means I have to go find it. Which is fine. Whatever.
My pals at HeavyTreddin, an OTR tire market blog, picked up on ATC’s latest, and delivered their take on the “release:”
American Tire Corporation: Too Big To Fail?
February 23, 2009
If you are a regular reader here, you know that we attempt to be balanced, and dish the praise and censure out equally. Even the most hardheaded manufacturers have a business to run, profits to maintain, and sustainability to consider. This goes double if you are a publicly traded company, with skittish stockholders who are demanding cuts in costs and increased accountability.
However, where American Tire Corporation (I mean, umm…Washington Tire Corporation) is concerned, I crossed the “fair and balanced ” line awhile back. This place is, after all, where I get to editorialize somewhat. It seems that in this case, my less than amicable coverage of their claims is warranted. One of our kind readers, whose name I will not disclose here, sent me the following…umm…claim last night.
My commentary on this particular press release will follow:
“Federal Government Approves ATC’s Washington Tire Project
American Tire Corporation’s new OTR tire manufacturing facility in Washington State was successfully approved by Federal Government. This manufacturing project is now moving forward steadily.
Chino, California Thursday, February 19, 2009 American Tire Corporation (ATC) is pleased to announce that its investment in the State of Washington for a new OTR tire manufacturing plant with building and production details has been approved by the federal government of the United States.
ATC has noticed the current financial crisis existing in USA and many other countries. Also, ATC’s competitors in USA are laying off thousands of tire workers and reducing their production. Some high-cost U.S. tire plants were closed or will be closed early this year.
However, such international economic problems have no negative impacts on ATC’s Washington Project.
On the contrary, as a positive response to President Obama’s plan to stimulate the domestic economy, ATC plans to increase its investment into the Washington Project and create more full time jobs up to 2,000 in the local community. ATC is likely to announce its job schedules late this month.
As a government-supported OTR tire manufacturer with operations in different US states and other countries, ATC’s Washington Project is designed to produce 50,000 units of high-TKPH 63″ and 57″ all steel radial OTR tires per year.”
Each claim gets more outrageous than the prior claims. The tighter things get, the more ATC seems to double down.
Their first claim is that the facility has been “approved by the Federal Government of the United States.” Now, this is not a lie, insomuch as it merely misleads the reader of the press release. I would stake my next month’s pay that American Tire has just been cleared by the EPA (edit: actually, the FAA. Thanks again to our anonymous source.), and given permits by various governmental organizations to build the actual plant. American Tire wrote this in a way that disingenuously confirms their claim of being supported by the US Government.
Now, they say they have finally noticed the worldwide recession. Really? What is this recession of which you speak? Then, in another deceitful move, they claim that their competitors are laying off workers, which they are, on lines that produce smaller OTR tires. With regards to product lines that compete directly with ATC, there have been few, if any cuts. The demand on Bridgestone, Michelin, and even Goodyear for 57- and 63-inch OTR remains strong, and should remain that way, given the rally in precious metals over the past two weeks. As usual, ATC refuses to compare “apples to apples” with regards to their competitors and their products.
Then, they state that the economic problems that the world is experiencing will have no effects on their operations. This is like some guy getting punched in the face, and then claiming it didn’t hurt while his nose is bleeding. The crisis is affecting everyone. In one way or another, we are all suffering from its effects. I’ll just go ahead and call a lie…well, a lie.
Now, because President Obama has signed this stimulus bill, they have decided to increase their investment. How much? Once again, our informed reader comes through, and states that he has learned it will be in the amount of $996 million. If ATC can arbitrarily double their investment at any give time, then perhaps Congress and the President should consult with American Tire Corporation. After all, they aren’t even being affected by the crisis. Venture capitalists should be beating down their door, begging for a piece of the action.
Heck, they are heroes. With an investment of just under $1 billion U.S., they are going to create 2,000 jobs in the community. They were only going to generate 500 jobs when they were spending $500 million. That is what I call exponential growth. With that kind of math, we should give them all of the stimulus so that American Tire can single-handedly pull the world out of recession. The more money we give, the less it costs to create a job. It would be a volume discount.
Oh yeah, and they are still claiming to be U.S. Government supported, which, as I have said many times, is probably a reduction in income taxes, tax credit, or a Federal Loan Guarantee plan. Heck, they may just have an application in.
At any rate, the most we have out of them is an earnest money payment of $40,000 on 96 acres of land. That is not even close to $500 million and 500 acres that they previously stated they would be buying. It seems that American Tire, like our wonderful banks, has figured out the value of leverage, both in rhetoric, land and cash. There’s very little cash or land, but quite a bit of soaring hype to make up the shortfall.
They are telling us in their own skewed words that they are “too big to fail”. They must be, because they aren’t negatively affected by the aforementioned crisis, have tons of money, and all of their competitors are crumbling beneath their own weight. While I have just been made aware of the recession (and I do thank them for informing me), I faintly recall talk about some companies being “too big to fail”. I wonder what is going on with them right now?
Oh, right. They are now “government supported,” as well.
If you have comments to share, send to me at [email protected]