While contract talks between the USWA and Bridgestone/Firestone North American Tire (BFNAT) progress, the union plans to increase pressure on the tyremaker to come to an agreement, reports Tire Review.
BFNAT union workers have been working without a master contract since April 2003. The two sides have been working off the previous contract on a day-to-day basis. Talks broke off in November 2003, and did not resume again until December 2004.
A new research report by the Motor & Equipment Manufacturers Association (MEMA) suggests that government intervention in the US steel market has caused a cost crisis that is hurting automotive and heavy-duty suppliers across the country, reports Tire Review. The MEMA report says that the result has been “unprecedented bankruptcies and job losses.”
The MEMA study, available online at www.mema.org, was written by economists Brian Becker and Kevin Hassett. The pair found that the steel crisis “triggered distortions in the steel market that have contributed to decreased availability, poorer quality and delayed deliveries of steel,” according to MEMA.
“Matador Group has completed another successful year,” said company spokesperson, Dušan Koblišek in a statement about its 2004 activities.
Describing Matador’s acquisitions and its move into the automotive supply segment as “a breakthrough period in the history of our company,” he went onto explain that the group’s initial consolidated results recorded a profit before tax of SKK 388 million (£7 million).
Deutsche Bank analysts are expecting the price of Michelin shares to increase by over 20 per cent from their current value of 53 euros per share to 65 euros. The estimate follows Michelin’s recent financial activities such as its investment in Poland, its Q4 results and its announcement that it is disposing of its wheel business. These signals “show the management commitment to turnaround this business unit,” wrote Deutsche Bank.
“In our view this shows a great consistency with the management strategy and reinforces our confidence in the capability of Michelin to reach their mid-cycle target of 10 per cent as early as 2006,” it estimated. This translates into 6.5 euros EPS.
However a risk lies in further strong increases in raw material prices which Deutsche Bank fears will not be able to be passed on to the customer.
In the first three months of the 2005 financial year Yokohama reported 305.9 billion yen (£1.54 billion) of net sales, a three per cent increase on the previous year. The company explains that strong overseas sales offset the negative impact of the high yen. Results for the period ended 31 December 2004, also showed that operating income dropped to 17.5 billion yen (£88 million). At the same time net income decreased 6.9 per cent to (roughly £41.23 million)
Yokohama reports that tyre sales were “solid” overseas, especially in North America, Asia and Europe, while replacement sales in Japan grew. Sales of the Tire Group therefore increased 4.3 per cent to 226 billion yen (£1.14 billion). The management maintains its full year projections, saying that Yokohama will record a 4.6 per cent gain in net sales, a 9.1 per cent increase in operating income, a 4.3 per cent rise in ordinary income and a 3.2 per cent drop in net income.
While contract talks between the USWA and Bridgestone/Firestone North American Tire (BFNAT) progress, the union plans to increase pressure on the tyremaker to come to an agreement, reports Tire Review.
BFNAT union workers have been working without a master contract since April 2003. The two sides have been working off the previous contract on a day-to-day basis. Talks broke off in November 2003, and did not resume again until December 2004.
Automotive supplier, Beru AG, has reduced its sales growth target, following lower than expected demand. The company now says that sales revenues should rise by at least 10 per cent in the current financial year with EBIT reaching at least 56 million euros. According to the company, an unusually warm winter, lower than expect demand for TPMS and lower sales in the field of diesel technology mean that its original 13 per cent sales goal will be unreachable.
Moody’s Investors Service is reviewing and may downgrade the debt rating for Findlay’s Cooper Tire & Rubber Co, the rating agency has said. Cooper Tire officials told Moody’s they expect to use $100 million to $200 million of proceeds from the nearly $1.2 billion sale of Cooper-Standard to reduce debt, the agency said. Other proceeds will be used for a “significant amount of stock repurchases.” However, the $100 million to $200 million amount would not lower debt enough, and repurchasing shares would increase financial risk, according to Moody’s.
Despite the challenges presented by raw material price inflation, Apollo Tyres has no intention to increase its own prices during the current quarter, India’s Hindu Business Line has reported. “I am not looking at this quarter for price increase. There are too many things happening in the market (budget, VAT etc) that have to be factored in before taking any decision,” Neeraj Kanwar, chief operating officer (COO), told the publication.
Continental AG’s most recent financial results show that the company has broken all previous records, including the one billion euro EBIT barrier. Speaking to Tyres & Accessories, Continental chairman, Manfred Wennemer, explained that the company achieved the one billion euro mark, despite the costs incurred in the partial closure of the company’s Mayfield plant.
With regard to US business, Mr Wennemer said that while the company is still in deep water, the situation is considerably better than in recent years. The Continental chairman went on to speak of his belief that this area of business will break even by the end of the year, as has been suggested before.
As far as 2005 is concerned, Mr Wennemer is confident that Continental can top this year’s impressive results. Chief financial officer, Dr Alan Hippe, demonstrated this feeling of optimism when he pointed out that company debts had dropped to less than one billion euros. The company’s share value also has the potential to increase by 40 per cent in the next two years, he added. Continental shares are currently trading at 52.50 euros.
Goodyear North American Tire division president, Jon Rich, said his unit’s 2004 financial results would show its first annual profit in three years, according to a Tire Review report. Mr Rich made his comments at the company’s annual dealer meeting in Dallas. Aggressive cost cutting and high sales of Goodyear’s Assurance passenger tyre line led to the improvements in both sales and profits, he explained.
Michelin North America Inc lost approximately 320,000 tyres because of fire at a South Carolina distribution centre, according to a Tire Business report. The fire was started on 13 January after a tornado (possibly two) lifted the roof off the facility and slammed it back down again. Residents living within half a mile were evacuated.
Michelin reports that the loss of tyres represents only a fraction of 1 per cent of the manufacturer’s unit sales in North America. Michelin added its financial loss is negligible since TNT carried insurance on the building and property, the US trade magazine added.
According to media reports, Continental will probably increase its shareholders’ dividend payments. The German daily Die Welt has reported that company chairman, Manfred Wennemer, is currently considering such a step, referring to the excellent business figures in 2004. Continental AG paid 52 cents per share in 2003 financial year. According to the newspaper, the tyre manufacturer is said to have achieved its internal financial goals again in 2004.
Michelin CFO, Michel Rollier has met with analysts in order to discuss the main effects of the Group’s transition to International Financial Reporting Standards or IFRS. The company previously used the French GAAP system. Michelin say its wishes, in line with French market authority recommendations, to provide the financial community with all available information. According to the company, adoption of IFRS standards has had consequences both in terms of measurement and presentation. Michel Rollier indicated that the main impact on Group consolidated accounts has been identified.
According to sources the North American arm of Continental has suffered further financial losses, with negative figures resting around the hundred million mark (euros).
A North American source claims that the losses would be greater still, if it were not for the support given by the European division of the group.
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