Featured on its Web site at www.tirereview.com, TR’s One Way Street Blog will be informal, with a mix of news, observations, opinion, thoughts and ideas that we hope will provide readers with invaluable insight, a more 360-degree view of your industry.
From time to time, we will share the sights and input we experience at various industry events, give our take on industry issues and activities, and report on forces that we think will influence the industry – and tire dealer businesses – in the future.
A number of entries have already been posted on the blog, which launched in mid-May, including comments about the recent Essen show in Germany, the Bridgestone-Toyo deal, tire pricing and some user comments.
The blog will be updated on an irregular schedule – sometimes once a week, sometimes multiple times a day – so readers are urged to check back often.
And if readers have their own comments to share, they can be sent to the editor, Jim Smith, at [email protected].
Bridgestone, Toyo Strike Co-op Deal
Bridgestone Corp. and Toyo Tire & Rubber Co. are buying stakes in each other with plans to work together on raw material procurement and production issues.
In the May 16 deal, Bridgestone will buy an 8.7% share in Toyo, and Toyo, in turn, will buy a 0.5% share in its larger rival.
“In order for Bridgestone and Toyo to discuss and pursue business alliances under a stable relationship with mutual trust, the two companies decided to establish a capital alliance,” said an official statement explaining the deal.
The companies said that specific project teams will tackle a range of issues and will report back this fall on areas where the two can work cooperatively, including new production technology, raw material and equipment procurement, cross production, global logistics and “other common business areas.”
There was no indication that the relationship would expand beyond the stock swap, which analysts said was necessary to allow the two competitors to work cooperatively.
“Toyo Tire is very proud to partner with Bridgestone,” said Kenji Nakakura, Toyo’s president and CEO. “We have great respect for their passion, their creativity and their innovative spirit. We feel this new alliance will greatly benefit both companies and we look forward to a long, prosperous relationship with Bridgestone.”
Bridgestone did not issue any management comments on the deal.
Open For Business
Continental Tire North America officially opened a new off road tire test track at its Uvalde Texas test center, showing off the mile-long multi-surface track during a recent media event. The off road track features a wide array of harsh surfaces – heavy silt, dirt, loose rocks and jagged rock – spread over a series of tight turns, moguls and elevation changes. CTNA says it will use the track to test its lines of light truck tires and race truck tires, including its new Baja racing General Grabbers.
Goodyear Adds All-Season Eagle GT
There is another Eagle in Goodyear’s high performance nest, with the recent addition of the Goodyear Eagle GT. Available next month in 24 sizes covering some 70% of the segment, according to Goodyear, the all-season Eagle GT will get 19 more sizes this fall, with the line covering 15- through 22-inch wheel diameters.
The newest Eagle features an “aggressive dual zone asymmetric tread” that includes an “outboard high performance zone” for grip and responsive handling, and an “all-season zone” for all-season traction, said Goodyear.
The tiremaker said its TredLock Technology microgrooves aid in all-season traction in normal driving, but lock together when cornering for solid handling.
“The sidewall styling and tread pattern are progressive and youth-influenced,” said Joey Viselli, Goodyear brand director. “These consumers, particularly younger performance drivers, want a tire with styling and handling, yet they drive their cars all year long, so all-season capability is a must.”
The new Eagle GT joins a Goodyear Eagle roster that includes the Eagle F1 GS-D3, Eagle F1 All-Season and Eagle F1 Asymmetric.
USW, Unite Closer to Super-Union Deal
Great Britain’s Unite and the United Steelworkers (USW) are one step closer with their plans to merge and create a global super-union.
Representatives of the 2 million-member Unite and the USW met in May to hammer out merger details, with a final announcement of the merger expected at USW’s annual convention in late June.
Unite’s membership covers Britain and Ireland, and is employed by such companies as BP, British Airways and Rolls Royce. The million-member USW represents U.S. and Canadian workers in a wide range of industries, including steel and tires.
Long-term, the merged group envisions adding unions covering Eastern Europe, Latin America and Asia, creating a complex global union that could seriously impact global corporations.
The merger is expected to create a new umbrella organization, with its main partners continuing to act somewhat autonomously. A full merger may be difficult because of countless legal issues, but the group plans to act as one union to the degree possible. A new name for the combined global union will be chosen next month, according to reports.
Last year, in the largest union merger in U.K. history, Amicus joined with the Transport and General Workers’ Union to create Unite. Shortly thereafter, the USW and Unite announced plans to merge.
Conti Group For Sale? Pirelli Interested?
With Continental AG suggesting that it might be interested in selling its global commercial truck tire business, it didn’t take long for a potential suitor to emerge: Pirelli.
The possible availability of Conti’s truck tire business – estimated at $2 billion in sales last year – came to light after the division posted pre-tax earnings margin of just 3.8% for the first quarter of the year, far below that of Continental’s other divisions and off from the company’s targeted 10% goal.
During a late April conference call with financial analysts, Alan Hippe, then CFO and current head of Conti’s global passenger tire unit, said, “Should the division be unable to reach the targeted margin, we will have to consider a divestment.”
Conti CEO Manfred Wennemer then added: “We’ve been looking at that division for some years now, and as before, I don’t want to rule out selling off the division.”
Given that Continental’s current product portfolio is entirely centered about passenger vehicle systems and passenger tires, the commercial truck tire group appears to be the odd division out.
Just a few weeks ago, Pirelli Chairman Marco Tronchetti Provera told German newspaper Handelsblatt that he was interested in acquiring Conti’s truck tire business. Continental quickly responded that there had been no contact from Pirelli and that, “There are no sales talks whatsoever.”
Meanwhile, Tronchetti Provera is shopping for a partner for a planned passenger and medium truck tire plant in Russia. The facility would also produce vehicle filters, a new product area for Pirelli. Tronchetti Provera, while not ruling out a solo effort, said he would prefer a joint venture with a local partner in Russia.
Unimax Expands With Tirecraft Buy
Bankrupt Tirecraft Group has a new owner after Quebec’s Pneus Unimax was approved by the Court of Queen’s Bench of Alberta to acquire all of the assets of the troubled franchisor and distributor.
The purchase closed May 30, and included Tirecraft’s President Tire and Remington distributors, as well as 330 franchised stores, 48 Tirecraft Auto Centers company-owned locations, 22 warehouses and four Canadian Treads retread plants, primarily in western Canada.
Sherwood Park, Alberta-based Tirecraft had filed for creditor protection on Apr. 15.
Terms of the deal were not announced.
Drop the ‘Interim’: Cannon Takes Post
Charles Cannon was officially named president and CEO of RMA, a role he has held on an interim basis since the sudden departure of long-time head Don Shea in February.
Cannon once served on the staff of the House Appropriations Committee, followed by several years with United Technologies.
He has managed Cannon Consultants Inc. for the last 20 years.
Cannon earned his PhD from Stanford University, after earning a masters from Rice University and his bachelors degree from Columbia University.
