The Bank of England raised interest rates yesterday for the fifth time since November. The rate increase of one quarter of one per cent, to 4.75 per cent, is seen as a way of cooling the UK’s booming property market and slowing the nation’s growing burden of consumer debt.
Chinese distributor, Beijing Boom Technology, has received its first volume shipment of 100 ‘SmarTire for Buses’ systems. The tyre monitoring systems will be marketed to tourism and public system bus operators in China.
SmarTire Systems Inc. (OTCBB: SMTR) announced that it has completed the development of a new receiver allowing for the manufacturing of its tire pressure monitoring systems (TPMS) for commercial vehicles to commence in July 2004.
Hayes Lemmerz International, Inc. (Nasdaq: HAYZ) announced that its Commercial Highway Division received a multi-product agreement with Hyundai Translead. Hayes Lemmerz will supply all standard wheel-end components for all of Hyundai Translead’s dry freight vans, refrigerated trailers, chassis and converter dollies for the agreement term. The agreement includes CentruMount(R) steel wheels, and Cast Hub and Drums and Centrifuse(R) Drums. This announcement continues to support the Commercial Highway Division’s goal of providing high quality, lightweight wheel-end systems to the truck and trailer industry, improving fuel economy and increasing revenue producing payload.
Austrian journalist and ‘fuel economy record man’ Gerhard Plattner succeeded in crossing 20 European countries in a VW Lupo 3L TDI, with a fuel budget of less than 100 Euros. Plattner relied on Bridgestone Ecopia low-rolling-resistance tyres that are fitted as standard on the Lupo. Their fuel-saving capabilities helped him to achieve a record average consumption of a mere 2.78 litres/100 km. The attempt began on 3 November 2003 in Oslo, Norway, and ended 4,683 kilometres and four days later in The Hague, The Netherlands. Running at an average speed of 80.76 km/h, the Austrian managed to complete the trip having spent only 90.94 Euro from the budgeted 100.
Scott & Scott, LLC a law firm with offices in Connecticut and California, announced a securities fraud class action against The Goodyear Tire and Rubber Co. The complaints filed by the law firm have cited various individual defendants including Samir G. Gibara, Robert W. Tieken, Robert J. Keegan, and Stephanie W. Bergeron.
In California, car tyres fitted as OE have to conform to federal fuel economy standards. However, the state argues that this should also apply to replacement tyres and has passed a law requiring the California Energy Commission (CEC) to develop efficiency standards, measured by rolling resistance. These standards will be in place by July 2007 and take effect a year later. Individual tyres will not have to be labelled, but retail stores will have to display efficiency lists.
There has been an unequivocal direction from Akron and Brussels, European Goodyear directors tell their subordinates. Once again, no matter by what means, the company has to cut expenses. Apparently the 2003 Ebit goals (reportedly 400 million US Dollars), that have been set by the creditor banks, are seriously at risk. Should the Ebit remain below the minimum 400 million threshold the banks would be entitled to withdraw from the concessions made earlier this year. And achieving the set Ebit goals seems to be becoming more difficult due to rising raw material prices and a sluggish American economy. The latest round of economy measures does nothing to dispel the feeling of insecurity among employees. What is more, it makes them angry and frustrated because even the smallest purchase of goods now has to be authorised. The potential of these economy measures would appear to be virtually insignificant. According to insiders, in Europe this potential is less than 2 million Euro. How far away the corporate group still is from its expected turnaround will be revealed with the third quarter figures. That Goodyear will end this year with another severe loss can be taken as read, no matter what economy measures are taken.
Daewoo-FSO Motor Polska is to slash up to 1,500 jobs in Poland, in a bid to save the company from bankruptcy and to encourage investment in restructuring. The exact number of jobs to be lost will be decided in discussions with unions, but 1,000 workers picketed a meeting of shareholders at the Economy Ministry.
“Consumers Digest”, a US magazine, has chosen Pirelli tyres as “best buys” in three categories. The P6000 Sport Veloce was named a premium BB in the All-Season category, the P400 was an economy BB in the Touring category and the Scorpion Zero was an economy BB in the light truck/SUV section.
Shares in Singapore-based Stamford Tyres rose by over 13 per cent on news that the company’s net profit had risen from S$ 2.75 million (1.39 m Euros) last year to S$ 8.18 million (4.12 m Euros) for the latest fiscal year. This comes at a time when the Singaporean economy shrank by 11.8 per cent in the second quarter, as tourism was hit by the SARS virus and the war against Iraq led to a decrease in production, said the Government.
Alliance Tire has appointed Yossi Anglister (56) as company President. He is from outside the tyre industry and is an industrial engineer with a reputation as a turnaround specialist. He describes the past few years as “challenging”, both for the tyre industry and the Israeli economy, but is confident that the next few years will see significant growth for Alliance.
Within less than a week our office has obtained eight links giving access to an electronic letter from Sam Gibara to all Goodyear associates. Gibara restated that as from the 1st January, Bob Keegan has taken over as CEO and that he remains as Chairman of the Group. Gibara looked back at the past year which he described as “marked by wins throughout Goodyear’s world” and he speaks of “foundations established for future success” and of “opportunities seized”, none of which would have been possible without the associates’ support. He adds, “You are making a difference and our company will prevail because of you.” With a degree of bitterness some of these associates said that Gibara had ultimately missed the opportunity to explain why the company is in such deep water. They point to the fact that Gibara has never shown any sign of admitting have made mistakes himself. Instead, it was always the economy, the environment, the exchange rate, the high costs of raw materials and so on. However, he has not convinced the associates, many of whom feel that it is a big mistake to play down big problems. The staff is willing to fight, but needs guidance. If indeed the company has the best brands, great distribution and the best people, why then is the company fighting with its back to the wall whilst its big competitors are making money?
In the USA, the Rubber Manufacturers Association is predicting that 2002 tyre shipments for new vehicle owners will rise by 7.3 per cent to 58.5 million units. This rise is fuelled by the heavy incentives and zero-finance offers from car manufacturers. The RMA also forecasts that car tyre OE shipments next year will stay flat and are expected to rise again in 2004 as the economy improves. An improved economy will also mean an increase in truck and trailer tyre shipments, says the RMA.
The Company reported a net loss of $6.8 million ($0.41 per share) 2002 compared with a net loss of $5.5 million ($0.39 per share) in 2001. Gross revenue for 2002 totalled $1.0 million, up from $0.8 million for 2001.
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