Tyre and wheel business news from the segment’s most important companies.
During the three months to March 31, Continental AG achieved sales of almost six billion euros, a 1.7 billion euro year-on-year increase. At 494 million euros, the company’s reported EBIT was more than 650 million euros higher than the comparative figure for the previous year’s quarter. From this total, sales from Conti’s Rubber Group accounted for 2.2 billion of the total, and reported group EBIT was 313 million euros.
Michelin and wheel manufacturers Hayes Lemmerz and Ronal are three of 13 new companies the Ford Motor Company has added to its Aligned Business Framework (ABF). The presence of the tyre and wheel manufacturers within Ford’s ABF brings the number of key component and service suppliers Ford has chosen for long-term relationships and closer collaboration to 90.
Upon announcing Titan International’s first quarter 2010 results, company chairman and CEO Maurice M. Taylor Jr. spoke on the company’s direction during the year. “Titan plans to open a facility in Fort MacMurray, Alberta, Canada, by the end of third quarter this year to service our new mining customers, and we plan on embarking on a joint venture in Mexico this year for the distribution of all Titan products,” he stated.
The International Finance Corporation has agreed to partially finance Apollo Tyres’ new greenfield facility in Tamil Nadu, India. On April 22 the World Bank organisation stated that, pending the consent of its Board on May 26, it will furnish Apollo with a financial package of US$60 million. Phase 1 of the plant, located in Oragadam near Chennai, is nearing completion, and the commercial production of tyres there began in the first week of March 2010.
The Redlands, California distribution centre opened by Continental Tire the Americas earlier this year is now operating at full capacity, and to mark the occasion an official ribbon cutting ceremony and ‘open house’ was held on April 15. The 46,500 square metre warehouse consolidates the operations of two smaller California based warehouses, and provides Continental with enough space to store and distribute over 450,000 passenger car, light truck and commercial vehicle tyres. Conti estimates that two million tyres will be moved through the Redlands site each year.
Results for the first quarter of 2010, released April 22, show Hankook Tire’s sales to have increased 17.6 per cent year-on-year to 1.3 trillion won (£780.4 million) and operating profit to have jumped 501.2 per cent to 212.2 billion won (£124.1 million). The tyre maker’s operating profit to sales ratio was 15.9 per cent, up from 12.6 per cent in the fourth quarter of 2009.
Plans for Hankook Tire to build a new factory in China were outlined on April 22; representatives of the South Korean manufacturer said the construction of a new facility there will aid Hankook’s efforts to consolidate its status as the leading international tyre manufacturer in China. The company also intends to increase its sales there by 15 per cent to US$1.21 billion this year.
In a vote held on April 21, unionised workers have accepted Kumho Tire’s proposed restructuring plan, including a cut in wages and bonuses. According to information published by the Wall Street Journal, the agreement paves the way for a 10 per cent reduction in salaries for 2010 and a further five per cent reduction before Kumho Tire’s exit from a debt-rescheduling programme in some two to three years’ time. In return, Kumho has withdrawn plans to lay off or outsource around 1,200 workers.
During an ordinary session meeting held on April 21, Pirelli & C. SpA shareholders approved the company’s 2009 financial statements and agreed to the distribution of a dividend of 0.0145 euros per ordinary share and 0.0406 euros per savings share. The payment date will be 27 May 2010.
Speaking on Trelleborg AG’s performance during the first three months of the year, company president and CEO Peter Nilsson stated “the first quarter of 2010 is showing that we are building a stronger Trelleborg and that we are constantly moving towards growing and profitable segments The implemented action programmes continue to give positive effects and we are gradually growing in to a more efficient structure.”
An agreement between management at Kumho Tires and the union representing employees has finally been reached. The Korea Times states that on April 18, during the 26th round of negotiations, both parties found common ground on all major issues. As per the terms of this final agreement, the decision to lay-off 189 Kumho Tires workers has been revoked on the condition that employees submit written assurances regarding the adherence to company regulations. The Korea Times adds that a further plan to outsource 1,006 employees will be cancelled should the agreement gain worker approval when voted upon.
Amtel Group founder Sudhir Gupta has reportedly sold a so-called “good quality bungalow” to Sareen Gajendra Singh who owns Omni United (S) Pte Ltd. According to local Business Times newspaper, the $28 million (Singapore dollar) sale of the property in the Binjai Park area of Singapore accounts for more than 5 per cent of total first quarter property sales in the “good quality bungalow” sector of the local market. The paper reports that this segment of the domestic property market recorded sales of S$500 million in the first quarter of 2010.
Goodyear’s newly appointed president and CEO has expressed confidence in the tyre maker’s ability to grow in hand with global economic recovery. At the company’s April 13 Annual Shareholder Meeting, Kramer stated this confidence is supported by the Goodyear’s very strong portfolio of brands, strength in high-growth emerging markets, innovative new product offerings, industry-leading retailer network and enhanced supply chain capabilities.
On April 1 a nine-hour strike held by Kumho Tire workers was called off following a tentative agreement reached between union leaders and Kumho management. This agreement outlined a ten per cent wage reduction for employees at the financially burdened company, plus an additional five per cent pay cut during the time in which Kumho Tire is undergoing a debt rescheduling programme. However the Yonhap News Agency reported on April 9 that this tentative agreement has been rejected by employees.
Belgium’s Prime Minister Yves Leterme has paid Bridgestone Corporation’s headquarters in Tokyo as part of his April 7 to 10 visit to Japan. During the visit, Mr. Leterme met with Shoshi Arakawa, Bridgestone’s chairman of the Board, CEO and president, and several other company executives.
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