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The Last Act?: Even After Attendance Boost for “Positive” WTE, TIA Officials Looking at Options

Even After Attendance Boost for “Positive” WTE, TIA Officials Looking at Options

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Surely after the dismal 2003 World Tire Expo in Louisville, Ky., most industry watchers were stunned when TIA announced the conference and trade show would return in 2005. After all, interest had waned to the point that attendance for the once-annual event dropped heavily year to year.

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Those same observers, then, must have been pleasantly surprised by the 2005 WTE. Overall attendance was up slightly from two years prior, and there was increased activity on the trade show floor and high interest in the slate of educational seminars.

It may be too little, too late to save the WTE, at least in its present format. At press time, TIA’s board of directors was considering the event’s future, and indications were that the WTE would return but likely as an educational conference and not a full-blown convention/trade show as in the past.

Regardless of its fate, TIA can chalk up the 2005 WTE as a success if only because it put together a program that clearly stemmed the attendance freefall that seriously damaged the once-mighty American Retreader’s Association show. The Apr. 20-22 WTE attracted a total of 1,541 registered buyers and exhibitors, up mildly from 2003’s total of 1,485. Of that, 952 were buyers, up substantially compared to 2003’s 628 registered purchasers.

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The WTE did not lack an international flavor, with 27 countries represented, including large contingents from South Africa, Australia and Brazil.

The slightly reduced size of the trade show floor – down to a little more than 24,000 square feet – made for more activity for the show’s 121 exhibitors. TIA Executive Vice President Roy Littlefield said exhibitors were “very positive” about the 2005 event, and some had inquired about committing for the next WTE.

At a press conference following the show, TIA President Dick Gust said the association was heartened by the interest shown in the WTE this year – particularly in the education programs offered – but was considering its options. “We’re really talking about it,” said Gust about the WTE’s future. “It’s still up in the air what we’re going to do.”

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Gust said the board would consider options, including a change to purely educational seminars, adopting a program similar to the TIA OTR Conference, retaining the event as it is or other options.

If the WTE does indeed become totally focused on commercial tire education, it has a good base to work from. Many WTE seminars had overflow crowds, particularly the Future Trends in Truck Tires and Fleet Experiences With Outside Tire Service and Retreads sessions. Those had standing-room-only crowds.

Moderated by Dave Kolman, TRIB associate managing director, Fleet Experiences With Outside Tire Service and Retreads featured fleet managers from Rumpke Transportation, FedEx and Schneider National discussing their outsourcing experiences, particularly how the fleets and dealers had to work together to meet cost and service objectives.

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The Future Trends in Truck Tires session featured engineering and marketing representatives from the major tire companies discussing the potentials for super wide radials, tire pressure monitoring systems for commercial trucks, and embedded tire chips to monitor inflation and temperature.

Other seminars focused on increasing sales and turning a profit in commercial tire service, tire inspection safety, truck tire repair, irregular wear and tire failure analysis, wheel fastener torque, cutting workers’ compensation costs, wheel failure analysis and a variety of scrap tire subjects.

Of particular interest was TIA’s first Commercial Tire Executive Summit, featuring presentations by tire and retreading industry executives and a lively panel discussion with representatives of five major tiremakers. TIA said 105 people attended the five-hour session.

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The Summit, moderated by Gust, was kick started by Bob Costello, chief economist for the American Trucking Associations, who presented a positive outlook for the trucking industry – and, by extension, the commercial tire and retread business – based on current and anticipated economic trends.

TIA’s Littlefield discussed the current legislative environment and the potential impact on the industry. Littlefield said the industry faces numerous challenges, led by the decline in corporate profitability for small businesses forced to “survive in a mass merchandizing world.” Partnerships between customers, suppliers and communities will be key to dealer/retreader survival.

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The cost and profit impact of government regulation is also a concern, Littlefield noted. There must be a better balance between regulation and the need to nurture business opportunity because the cost of regulation – in the form of items like the TREAD Act and EPA Superfund citations that squeeze unsuspecting small business owners – hurts the U.S.’s ability to compete in the global economy.

Cooper Tire & Rubber Co. Chairman, President and CEO Tom Dattilo also brought some focus to the direct cost impact of government regulation on larger corporations. While certainly some reform was needed in the wake of various corporate financial scandals, Dattilo said, the direct cost of Sarbanes-Oxley financial reporting compliance legislation on his company equaled some $3 million and 32,000 man-hours.

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The tax load on corporations and cost impact of regulatory compliance, Dattilo said, are preventing U.S. companies from being more competitive on the world stage. As an example, Dattilo said that 47% of all truck tires currently sold in the U.S. are imported.

Dattilo also noted the value of proper tire data management to fleets and dealers and what he called “a critical need” for professionally trained commercial tire experts for the benefit of fleet customers.

Martin Carver, chairman and CEO of Bandag Inc., derided “arbitrary casing age limitations,” suggesting that fleets hurt themselves by discarding still-retreadable casings.

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Some fleets have tire programs that toss used tires after four or five years, Carver noted, regardless of how many more miles the casing could deliver after retreading. Some of this is driven by the fact that the cost differential between new and retreaded tires has closed substantially, he said.

Still, the ratio of retreads to new truck tires has closed from 1.5 to 1 to almost even.

Carver said today’s available casing inspection technology, including shearography and other non-destructive methods, reliably weed out unsuitable casings and preserve a high ratio of retreadable casings.

Tire-related issues still count for half of all unscheduled downtime for fleets, he noted. Fleets that don’t have effective tire management programs in place designed to limit tire-related downtime risk losing business. Solid tire management efforts by dealers and retreaders can “make you a critical partner in their success,” he said.

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The 45 minutes slated for the open panel discussion proved too short, as the moderator and audience members posed some difficult questions to the group, which included Art Campagnoni, Bridgestone/Firestone North American Tire’s director of truck tire sales; Marc Leferriere, vice president of truck tire marketing for Michelin North America; Tom Roydhouse, senior vice president of Continental Tire North America’s commercial tire group; Ed Reading, vice president of retread products and international sales for Cooper; and Donn Kramer, Goodyear’s director of commercial tire marketing.

The panel tackled questions about what tiremakers are doing to improve dealer profitability, what they can do to help fleets understand the value of balancing truck tires, and what they are doing to improve “terrible fill rates,” ease capacity concerns and create greater equity in pricing, especially as many tiremakers are importing truck tires from low-production-cost countries in Asia, South America and Eastern Europe.

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Goodyear North American Tire President Jon Rich was the keynote speaker at TIA’s breakfast on the WTE’s final day. “Trust and knowledge” are the two key things independent tire dealers offer their customers, Rich told the 215 event attendees. “Independent tire dealers are remarkable, and I enjoy working with you,” he said.

Rich said high raw material costs continue to plague the tire industry, and, coupled with rising gasoline and diesel fuel costs, the added expenses have hurt auto companies and their tier one and two suppliers. Still, Rich said he expected at least another 12 months of strong OE and replacement market truck tire demand.

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He also outlined what Goodyear is doing to try to ease the truck tire capacity squeeze, including adding capacity to U.S. plants, modernization and improvement efforts and productivity improvements to help reduce costs.

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