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Law Suit Has Little Chance of Success Say DaimlerChrysler

DaimlerChrysler have said that they regard the nine billion Dollar law suit by its third largest shareholder, the Tracinda Investment Group, as completely unfounded. The lawsuit alleges that DaimlerChrysler have deliberately deceived the US Stock Exchange Control Institution as well as the shareholders. Analysts predict that this law suit has little chance of success. Although Deutsche Bank, the main shareholder of DaimlerChrysler, have demonstratively supported the management, the car manufacturer’s share price went down significantly to 45.85 Euros.

7th December 2000/by Tyrepress Editors

B2B E-Commerce not a Revolutionary Subject for Michelin

Evolution for sure, revolution not at all. That’s Michelin’s opinion regarding the B2B E-Commerce initiative of leading global tyre producers which was announced recently.

7th December 2000/by Tyrepress Editors

Goodyear Optimism Boosts Share Price

Goodyear recently turned in a bullish report on its first quarter performance. The market was impressed, as the company’s shares rose 47% from its 52-week low in March. Industry analysts predict a good performance from Goodyear in the short term, with shares rising further.

7th December 2000/by Tyrepress Editors

Recommended By Analysts: Cooper Shares

In the USA, Cooper Tire & Rubber shares have seldom been so cheap. With the recent acquisitions, the market was not convinced that Cooper was running in the right direction, but after the first quarter’s good results, most have changed their opinions and are regarding Cooper with more optimism. An increasing number of experts are convinced that the Cooper management might use the low share price to buy back up to 10% of its own stock, which would have a positive effect. Apart from Cooper, Continental was the only other tyre and rubber manufacturer whose shares were tipped as a “buy” by analysts.

7th December 2000/by Tyrepress Editors

Pirelli: Investments In Telecommunications And Internet

According to Italian financial analysts Pirelli will use the US$ 2.15 bn received from the purchase by Cisco of their ‘Terrestrial Optical Networking Systems’ for investments in telecommunications and the Internet.

7th December 2000/by Tyrepress Editors

Goodyear’s Turnaround Delayed?

A Deutsche Bank analyst raised the Goodyear rating to “buy” because he believed in a turnaround story. Some analysts agreed, others saw Goodyear shares still only as “neutral”. But now it is different. Based on the latest statements from Goodyear, there are massive doubts regarding volumes and whether the pricing trend will be favourable. Analysts now believe that the situation will not improve before next year and that Goodyear shares will remain low.

7th December 2000/by Tyrepress Editors

Will Rubber Prices Climb?

After rubber prices fell to a 30-year low last year, analysts are expecting a significant turnaround. The reasons are increased demand, especially from the Japanese rubber industry, and reduced output from the main natural rubber producing countries.

7th December 2000/by Tyrepress Editors

Dr. Kessel Names Pirelli As Ideal Partner

In an interview with the German publication Frankfurter Allgemeine Zeitung, Conti boss Kessel said that Pirelli would be an ideal partner for the tyre business, as this would produce significant synergies. To date, there has been no contact with the Italians over this matter.n According to Kessel, Continental need not fear any possible hostile takeover attempt because the car manufacturers would be very interested in maintaining competent and independent suppliers. In addition, the company could rely on strong backing from its individual important shareholders, such as Deutsche Bank, Dresdner Bank and Allianz insurance company, which together hold 16%. Kessel did not mention the fact that, in light of the low stock price, analysts had changed their minds last week and that most, if not all, of them do not regard Continental shares as a “buy” any longer. Hard times for Continental!

7th December 2000/by Tyrepress Editors

Michelin Out Of The CAC 40?

There is speculation among analysts that Michelin and Valeo could be dropped from the CAC 40. Continental has been ousted from the DAX Index and Goodyear from the Dow Jones Index recently.

7th December 2000/by Tyrepress Editors

MIRS Introduced By Pirelli

Pirelli recently invited journalists and analysts to its factory at Bicocca, Milan in order to see first hand the company’s new manufacturing process MIRS (Modular Integrated Robotized System). MIRS reduces the steps in tyre manufacturing from 14 to 3 and a tyre can be produced every three minutes. Tyres are built round a special drum, with the instructions given to the robots (the process is totally automated) through a barcode. The tyres are said to be more uniform and consistent. As well as its speed and flexibility, MIRS has the advantage of compactness and a line capable of producing 125,000 tyres a year can be sited in an area of a mere 350 square metres. Pirelli Chief Executive Marco Tronchetti Provera said that Pirelli will invest 50 million Euro over the next three years in 80 MIRS lines, increasing output by ten million tyres a year. Two of these lines will be located at Pirelli’s Burton-on-Trent factory in the UK, concentrating on SUV and 4×4 tyres. Burton stopped making tyres in 1994 and the news is a welcome change for the UK tyre manufacturing industry. It is a large factory, and there is ample scope for more MIRS lines to be added in the future, should this be Pirelli’s strategy. The figures associated with MIRS are truly impressive; investment costs are lower than for traditional factories and the minimum economic batch size has been reduced from 3,200 units to 375. The time taken to change sizes comes down from 375 minutes to 20. Workforce productivity is increased by 80% and MIRS uses less energy than a ‘normal’ plant. The manpower needed is significantly reduced too – it is estimated that 850 staff will be needed to produce the proposed ten million tyres. There is one other figure which, in these days of competition and falling prices, is even more interesting – a MIRS tyre is 25% cheaper to produce than a conventional tyre.

7th December 2000/by Tyrepress Editors

Yokohama Shares Rise

Yokohama Rubber’s share price surged by at the end of February. Analysts are speculating whether this marks the beginning of a new round of consolidation in the tyre industry.

7th December 2000/by Tyrepress Editors

Firestone Recall Hysteria Fuelled By Advocates

Firestone has been forced, for the second time in the company’s history, to recall tyres in North America. 22 years ago, the recall of 14 million “f 500” tyres, almost ruined Firestone. The current situation refers to the recall of 6.5 million SUV tyres, the ATX, ATX II, and Wilderness line in the size P 235/75 R 15. About 2/3 of these tyres are earmarked for Ford’s OE demand for the Ford Explorer and the Ford Ranger. Bridgestone already announced that it would take a one-time $ 350 million charge and informed analysts that earnings estimates, $1 billion before the recall situation, had to be reduced by the amount of the taken charge. Whether this is the only financial impact that BFS will have to encounter is more than doubtful. In the US a horde of consumer advocates stand ready to sue BFS, all in the name of consumer advocacy. The likely cost of litigation is not included in the $ 350 million charge. The extent of the damage to BFS and its Firestone brand cannot be evaluated, it remains to be seen how the entire industry will be affected by this recall. Without any doubt, the Firestone brand has suffered a serious blow despite the fact that up until today it has not been demonstrated that the tyres were the cause of accidents investigated by NHTSA. BFS, so it seems, never really had a chance to manage the ensuing crisis in an optimal way. Although the crisis didn’t hit BFS completely out of the blue, BFS had to take into consideration the interests of its largest OE customer Ford on the one hand, and its own interest to protect the Bridgestone brand from any spill-over effects. One thing became abundantly clear: two kinds of tyre manufacturers currently exist. One the one hand, there are those who have already had to deal with a disastrous recall situation and on the other hand are those that will have to do just that at some uncertain time in the future.

7th December 2000/by Tyrepress Editors

Goodyear: Gibara Announces New Multi-Brand Strategy

The differentiation within the Goodyear brand, which has been most conspicuous in North America, will soon be a thing of the past. On Thursday Gibara declared in front of analysts in New York that the Goodyear brand will in future only be a premium brand; the group’s range will be complemented by Dunlop (medium brand) and Kelly (economy/budget brand).

7th December 1999/by Tyrepress Editors

Nokian: Turnover Up 20% In First Nine Months Of 1999

Finnish tyre manufacturer Nokian has achieved a net turnover of 199 million Euros in the first nine months of this year; an increase of around 20 %. Operating profit is 18.4 million Euros (9 % lower than the previous year). Nokian is pursuing a strategy of expansion and, this year, will invest some 31 million Euros, with the aim of increasing production capacity by 50% within five years. At the moment, Nokian is trying to purchase ISKO, Finland’s largest tyre dealer with a turnover of approximately 65 million Euros. Analysts say that ISKO is financially very strong and very profitable.

7th December 1999/by Tyrepress Editors

Goodyear to Close Factory in Italy

Goodyear has told bank analysts that it will close a large factory in Italy that produces six million tyres a year. Goodyear produced about 55 million tyres in Europe this year and intends to reduce the production capacity from 72 million tyres (after the Dunlop take-over) to about 62 million by 2002. After Goodyear’s shares lost more than 40 per cent of their value, they announced plans to close more than one factory and increase production in the remaining European plants by introducing a seven day operation.

7th December 1999/by Tyrepress Editors