Kaizaki Makes A Point
Yoichiro Kaizaki, in a circular letter to Bridgestone management, has made it clear, that the sum of up to 50 bn $ claim for damages referred to by some American attorneys is totally false. American subsidiary Bridgestone/Firestone Inc. has already made, according to Kaizaki, an initial charge of 450 million US-$ for the tire recall itself and has now pledged an additional reserve of 450 million US-$. This should be in accordance with what all involved counsels believe will be the maximum cost for the American subsidiary. There is no financial danger for Bridgestone/Firestone Inc. Obviously it is a question of American lawyers trying to increase public pressure on Bridgestone Japan with the intention of talking up the claims for damages in order to encourage an out-of-court settlement. Kaizaki has countered this by saying that from now on every baseless attempt to do this will immediately be discussed in public debate.
Continue ReadingFine For SITA Tyre Recycling Ltd After Environmental Offences
On January 24, SITA Tyre Recycling Ltd., the company running the whole-tyres-to-energy power station which has been closed since June, pleaded guilty at Wolverhampton Magistrates court to five environmental offences. The case was brought by the Environment Agency and SITA were fined a total of £28,500, and ordered to pay costs of £15,392.50. Meanwhile, the SITA tyres-to-energy power station (formerly Elm Energy), based in the midlands in the UK, is unlikely to open its doors again as a tyre-burning facility, at least under SITA ownership. Initial investigations indicated that rectification work would cost 4 million Pounds and a closer examination revised this figure to 6 million. There were doubts too that a viable price could be achieved for a regular supply of tyres. Eventually, the decision was taken to mothball the plant until SITA either finds a buyer, or uses it for something else. 59 of the 60 employees have been made redundant.
Continue ReadingVW Microbus On Goodyear Tyres
The New Beetle aroused great enthusiasm in the United States when introduced and now VW wants to repeat the success story with a concept car called Microbus. At the Detroit Motor Show the reincarnation of the love bus from the 50s and 60s, the symbol for the flower power generation, is fitted with modern 20 inch aluminium wheels and Goodyear tyres size P 245/45 R 20.
Continue ReadingNew Flagship Tyre From Bridgestone
At the Geneva motor show, Bridgestone unveiled the Potenza S-03 Pole Position; its new flagship tyre for the super sports passenger car segment. Bridgestone says that the new tyre incorporates technology developed in the F1 arena. It replaces the S-02 series and will be on sale from April.
Continue ReadingNew Acquisitions By Continental
According to rumours, Continental is negotiating to acquire Temic (an electronics company with a turnover of about 900 million Euro) as well as with German conglomerate Siemens to acquire their daughter company Sachs, which produces shock absorbers and turns over around 2,200 million Euro. It is far from clear how Continental could finance such a deal, which would cost at least 2,000 million Euro. In spite of the low share price and low market capitalisation, it should not be assumed that Continental would get money from new shareholders for a reasonable price. On the other hand, Continental announced months ago that the group is willing to sell ContiTech, which has a turnover of 1,800 million Euro, but so far no company has offered Continental a reasonable price. At the moment, the whole group, with a turnover of 10,000 million Euro, is worth significantly less than 3,000 million Euro at the stock exchange.
Continue ReadingBears Threaten US Auto Market
Autopolis, the Bear-ish auto industry strategist is likely to downgrade forecasts for the US and North American automotive markets. Despite high sales, production is down by 20% and stocks 40% above normal. This follows an earlier warning of a forecast 11% drop in world-wide (in Western Europe and Asia too) demand, and alerts issued by Autopolis regarding over capacity, and the need to cut costs and improve marketing.
Continue ReadingIndian Tyre Industry Threatened By Imports
The Indian tyre manufacturing industry may be under threat from cheap imports from China. The lifting of trade restrictions with China has already created trading problems for many of Indias smaller industries. Presently imports from China form only 2.87% of Indias imports, but the arrival of cheap, mass produced products from China has indicated the lack of preparedness of Indian industry to meet the new competition. Tyre manufacturing has been highlighted as a potential victim as businesses move from manufacturing to importing.
Continue ReadingContinental’s Annual General Meeting
At the annual general meeting of Continental AG, held at the Preussag-Arena of the Hanover EXPO Centre, both management board and shareholders were united in not being very happy with the development of the companys share price. However, they did not agree over the intention to sell ContiTech. Whereas, for the groups representatives this is another logical step towards becoming a systems supplier for the automobile industry, the question was raised, whether instead it might be more useful to separate from the weak Continental Tire North America (the former General Tire). Another factor is that last year ContiTech achieved quite a profitable result. This kind of argument took the wind out of the sails of both Continentals managing director, Dr. Stefan Kessel and board member Manfred Wennemer, who is responsible for this business unit within the group. They were united in their desire to follow the path towards Global Chassis Control. And in order to emerge from the decline, a cluster of measures has already been introduced. We expect these measures to bear fruits soon, and that sales increases will be reflected in the results, too. However, 2001 will be a very difficult year for tyres in the USA – such was the managing directors outlook. Therefore, it will be even more important to become a systems supplier. As there are only a few suppliers for the automobile industry, hostile take-overs will be rather unlikely. Kessel was trying to allay the shareholders fears and once more justify Continentals strategic change. Of course, it would be very helpful to spur on the share price, as explicitly declared by the groups top management at the AGM – however, it needs more than words.
Continue ReadingNew President For Trelleborg Wheel Systems
Maurizio Vischi (45) will become President of agricultural tyre manufacturer Trelleborg Wheel Systems on June 1st. Mr. Vischi is currently head of the TWS Agricultural Radial Tyres business unit, located at Tivoli in Italy, where he will continue to be based. The current President, Anders Pettersson, is leaving to take up a new position as a divisional president for the security group Gunnebo AB. TWS was formed at the end of 1998 as a joint venture between Trelleborg (which owns 60% of the jv) and Pirelli, as a specialist manufacturer of agricultural and forest tyres.
Continue ReadingRollercoaster Ride Continues For Bridgestone Shares
It is hard to keep pace with the price of Bridgestone shares as they yo-yo up and down. Following a fall when the company announced the closure of the Decatur factory, the shares have risen by 0.77 per cent, outperforming the Stock Market. Japanese analysts believe that the factory closure and associated cost savings are a positive step.
Continue ReadingNew Tenneco Vice President
Jean Pierre Dolait has been appointed as Vice President Sales and Marketing, Aftermarket Tenneco Automotive ( Monroe brand suspension products and Walker exhaust systems). Previously at Valeo, Dolait reports to Tennecos General Manager, Aftermarket, Don Miller.
Continue ReadingConcern Over Asian Auto Sales – Report
A recent report from autopolis, the organisation offering strategic advice on the worlds auto industry, expresses some concern about future vehicle sales in Asia. It forecasts reduced sales in markets other than China for this year and next, picking up in 2003. Long term, says autopoliss Graeme Maxton, Asias auto sales will grow by nearly five million units over the next ten years.
Continue ReadingTyre Safety To Be Checked By Ford
Recent reports questioning the reliability of some of the tyres being used by Ford to replace Firestones are doubtless partly responsible for the car manufacturers plans to conduct a series of tests on replacement tyres. Fords team of around 100 engineers will carry out a number of tests, including measuring wedge thickness, temperature monitoring and how much force it takes to cause a tread separation. Other checks on the relationships between load/speed/temperature will be carried out in conjunction with tyre manufacturers as well as in-house.
Continue ReadingMore Production Cuts From Goodyear
In the US, Goodyear says that it will reduce tyre production this month and next, due to weak demand for new cars and trucks. Cuts will be made across the board with no layoffs or shutdowns planned. The reduction follows a second quarter cut in production of six million tyres, despite increased demand as a result of the Firestone recall. Shares in Goodyear fell 20 cents at the news.
Continue ReadingNo Negotiations With Continental
Trelleborg has an annual growth target of 15-20 percent. Part of this is attained through an ongoing acquisition policy. This has given rise to speculation on a possible Continental take-over. Trelleborg has felt obliged to confirm that there are currently no negotiations between the companies.
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