It was a watershed moment in tire industry history, and a huge moment in U.S. economic history. I recall the excitement in Akron when the purchase was announced, mostly from the thousands of residents (and Firestone employees) would be made millionaires in the deal. There was also a great sense of relief that the months-long bidding battle between Bridgestone and Pirelli had been settled one and for all. I recall, too, attending the Firestone shareholders meeting during which the sale was approved and sitting at the post meeting press conference when then Bridgestone chief Akira Yeiri made the ill-fated comment that the purchases was “a merger of equals.” That statement set the table for years of painful – and expensive – efforts to get the whole thing to work, primarily because both parties believed it was a merger. Anyone else remember the days when Bridgestone/Firestone Inc. claimed it was losing $1 million a day? So imagine how I cringed when at the recent Bridgestone/Firestone North American Tire Bizcon meeting BFNAT officials constantly refered to its $1 billion purchase of Bandag as a “merger.”
…Think Chinese tiremakers are abusing the U.S. market? Try being a tiremaker in India right now, where Chinese imports represent fully 91% of that country’s tire imports. Despite anti-dumping duties that were nearly doubled in the past year, the price differential between domestically produced tires (radial and bias) and those brought in from China is still between 10% and 30%
…Just got a copy of a white paper “The Value of Green Tires to Corporate Profitability.” In the 32-page tome, the authors (one a consultant and the other a Rice University business school prof) flack for increased use of “engineered ultra-fine recycled rubber powder” in tire production. Neither is a rubber scientist, and it shows in some of the unverified claims they make about the benefits of using the material. I have every confidence tire companies are considering every possible option to lower raw material costs, and recycled tire rubber is certainly getting play. We just don’t need another group of inexperienced people running to the consumer media with their questionable claims
…Troubled U.S. economy has been driving trucking fleets under, most notably New Jersey’s Jevic Transportation, which suddenly closed down earlier this month. 1,900 employees have lost their jobs, and thousands of trucks and trailers sit idle. President and CEO David Gorman said the LTL carrier was the victim of rising diesel costs, decreased shipping due to the slump, increasing insurance costs and tightening credit.
…Struggles between the rich and poor are not limited to our current economic dilemma. The Financial Times recently reported that citizens of Germany, France, Italy, China and the UK are more critical of the gap between the rich and poor than U.S. residents. When asked if the rich should be taxed more, less or the same than the poor, some 75% of Japanese said higher, and more than 60% of Spaniards, Germans and Americans agreed.
…Not only are we gulping at the gas pump, home heating pricing is headed upward, too. Average monthly heating bills in my corner of the world are expected to double next winter. Double. Might want to consider other ways to keep your stores and bays warm…
If you have comments to share, send to me at [email protected].
– Jim Smith
