For the retread market, 2007 was a year of significant activity and change, with Bridgestone Corp. acquiring Bandag in June, followed the very next month by Michelin North America’s acquisition of Oliver Rubber Co.

Both actions were all about efficiency and effectiveness, and fundamentally complete the marriage of new tire producers to major retread suppliers that began some 20 years ago.

They are also evidence of a steady retread market. As medium truck tire capacity has been strained over the past few years and fleet owners continue looking for more options, retreading of accepted brand casings remains a primary option.

Facing increased operating costs, fleets see retreading as a way to save money and demand a more complete, total tire lifecycle management system. This “cradle-to-grave” service approach will be what sets retread companies apart from one another in the eyes of end-users.

Aside from Michelin and Bridgestone Bandag, also on the scene are veteran tire manufacturer and retread system supplier Goodyear Tire & Rubber and Marangoni Tread North America, which branched out from its Italian parent company and entered the North American market in 1998.

Because only six months have passed since the Oliver and Bandag acquisitions closed, the full effect of the moves has yet to be measured. Michelin is still in the decision-making process and has not yet notified its franchisees of what exactly to expect. Therefore, the company could not comment for this story on its specific goals and strategies, says Mark Burd, spokesman for MNA.

For Bridgestone, the acquisition of Bandag adds another dimension of service.

“We were a tire company and didn’t offer a unified retreading solution,” says Kurt Danielson, vice president of truck and bus tire marketing for Bridgestone/Firestone North American Tire. “This really allows us to come closer to getting the total package completed.

“It also allows us to communicate with each other to ensure we’re servicing fleet customers to the best of our abilities mutually,” he continues. “Our field reps are working hand in hand with each other, representing to fleets that we’re one company coming to them with solutions.”

The merger puts Bridgestone Bandag in an ideal position to keep pace with the market and prepare for the future, says Bill Block, director of corporate communications for Bridgestone Bandag.

“Bridgestone Bandag is a combination that takes advantage of each business’ strengths, whether that’s in rubber compounding, tire management technology or manufacturing methods,” he says. “This is only going to make the two companies stronger and provide opportunities for dealers and fleets alike.”

As an example, Block noted that Bridgestone “has great expertise in natural rubber compounds, while Bandag owes much of its leadership to expertise in synthetic rubber compounds. When we put those two technical groups together, this is what we mean by taking advantage and bringing the best together.”

In light of last year’s changes, Goodyear’s strategy “has not changed at all,” says Steve McClellan, vice president of Goodyear commercial tire systems. “We’re not totally surprised by these actions, based on the important role retreads play in the success of our cradle-to-grave offerings. We remain focused on bringing to market the products, services and information that deliver real value to end-users and fleet customers of all sizes.”

McClellan says that although changes caused by the acquisitions have yet to be seen, he believes they will be good for the tire industry due to “an increased focus on retreading, which will drive more innovation in new retread products and service offerings that fleets desire.”

He noted there is the potential for increased pressure on dealers to be exclusive in their new tire and retread offerings.

That pressure is exactly what Marangoni hopes to use to its advantage. Though the company does produce new tires in Europe, its only focus in North America is retreading, and unlike the combination new tire/retread companies it competes with, Marangoni supplies its Ringtread product to purely independent shops, offering them more freedom and options.

“The acquisitions made by these two will open up opportunities to expand our dealer network,” says Marge Connors, marketing and communications manager for Marangoni North America. “We believe there will be dealers across North America that will want to maintain their independence by having a product that will differentiate them in the markets they have cultivated for many years. Our independent tire dealers have affiliations with all new tire brands, and would love the opportunity to retread any casing.”

Total Lifecycle Care
In response to demand from fleet owners, each company offers traditional cradle-to-grave service – new and retreaded tires, tire inspection, training, tire recordkeeping and management, scrap inspections and disposal, yard inspections and inflation maintenance programs and more – all aimed at helping fleets reduce costs.

More and more, though, these services are expanding – and saving fleets even more on their tire investment and other budget items. From application-specific treads (new and retread) to more intensive tire management systems to more detailed tire maintenance systems, commercial dealers now have an even more impressive arsenal to take to fleets.

“Generally, we’ll probably see more enticements for cradle-to-grave programs that offer one company’s product for all positions: steer, drive, trailer and retread,” Connors says. “The question will be, are these packaged programs really the best performance and value for any fleet situation? It’s hard to be all things to all people, especially with so many different trucks, segments, roads, drivers, etc.”

Bridgestone Bandag is in a position to “better service our customers by putting the new tire products and services and the retread products and services together, or at least be in position to offer comprehensive tire maintenance solutions,” Block says.

“Customers are more focused than ever before on tire management solutions that drive operating costs down, especially with today’s high fuel costs,” he says.

Goodyear’s McClellan says retreads will increasingly be viewed as a more important consideration in a fleet’s new tire purchase decisions because of a need to drive down operating costs. This is why he expects the retread market to grow in the next 12 to 24 months.

Fuel Savings
One of the main factors of decreasing operating costs is to search for more fuel-efficient tire and retread options. This is becoming easier, with companies offering fleet owners more products to choose from.

“Goodyear’s Fuel Max Technology is finding great success in new tires,” McClellan says. “By offering a full complement of Fuel Max retreads, fleets can continue to enjoy the return on their investment mile after mile. We are committed to providing great products and service offerings that will assist fleets in improving their operating costs.”

Bridgestone Bandag offers a range of fuel-efficient products, the most popular of which include its Fuel Tech and FCR treads. Both feature specially compounded, high mileage tread designed to deliver better fuel economy, the company says.

Marangoni prides itself on its Ringtread technology, which the company says provides lower rolling resistance, better fuel economy, greater reliability and longer mileage than the conventional flat, spliced precure retreads.

The continuous ring design, Marangoni claims, eliminates distortion and deformation of the rubber that occurs in conventional precure methods, resulting in a better-balanced retreaded tire that requires less energy to roll and is cooler-running.

Looking Ahead
Though the number of retreaders in North America has declined in recent years, the demand for high quality retreads continues to increase, a clear indication that the industry will  remain steady.

To keep up with market demand, Marangoni will introduce a new Ringtread design, one that will impact the on/off road segment, in the first quarter of this year. The company is also expanding its offerings in the 17.5- and 19.5-inch sizes, which have shown increasing demand, Connors says.

Both Bridgestone Bandag and Goodyear declined to comment on specific product developments that are in the works, but both noted they are constantly working to improve and build upon existing offerings.

“We’re very conservative when it comes to talking about things that are in the works,” Block says. “We don’t want to mislead customers or dealers in any way by talking about something that we’re working on. What we want to do is reserve the right to tell the world we have something new when it truly is ready and the performance claims we make are what the customer can expect to receive.”

“We continue to invest in innovative compounding and manufacturing capabilities that enhance retread performance levels that drive ultimate value to the fleet customer,” McClellan says.