Cooper Tire & Rubber Co. has appointed Brad Hughes as vice president and chief financial officer (CFO). Hughes succeeds Phil Weaver who retires at the end of the year. Weaver has served Cooper 19 for years and has been CFO since 1999.
Bridgestone reports that its operating environment “remained challenging” in the first three quarters of the 2009 fiscal year. The nine months to September 30, it comments, was a time of “weakened consumer spending and declines in private sector capital investment, which counteracted signs of recovery among some exports.” The continuation of recession conditions in Europe and the United States was tempered by some sectors showing signs of stabilisation, however, and a gradual recovery was seen in China. Other regions also began to show slight signs of recovery, the tyre major states.
Michelin has leant financial support to the development of a green engine, which reportedly has the capacity to reduce fuel consumption and carbon emissions by 20 per cent. The fuel-lean Homogeneous Charge Compression Ignition Engine (HCCI) has a flameless, low temperature combustion which enables it to reduce fuel consumption and carbon emissions, combining the emissions benefits of a gasoline engine with the low fuel consumption of a diesel engine. The HCCI technology has been developed by Dundee based Oxy-Gen Combustion Ltd, with much of the research and development undertaken by the company's managing director David Tonery, who invented the enabling HCCI technology while a mechanical engineering undergraduate at the University of Dundee.
At the end of a turbulent 2009 analysts of Plimsoll are predicting 45 UK tyre manufacturers and distributors will be struggling to see 2010 out: “Having clung on through the bad times many of these struggling companies are going to run out of time and fail just before the recovery really takes hold. Sadly, some of them are just too weak to carry on and there will be a spike of failures in the New Year. On the flipside, their demise will bring a welcome reduction in competitive pressure for those left”.
Pattison is convinced the market is due a prolonged period of consolidation with the number of companies in trouble leading to heightened takeover activity. He explains: “With too many companies chasing weakened demand it is inevitable that there are likely to be a number of high profile mergers and takeovers. In all honesty it’s long overdue. Once demand started to flag it was inevitable companies would be caught out. This period of consolidation is needed to sort out the dead wood. We have named 21 companies as the best acquisition prospects in the market”.
Yokohama Rubber has reported a year-on-year 21.3 per cent drop in sales during the first half of the financial year. Upon announcing sales in the six months to September 30, 2009 amounting to 202.1 billion yen (£1.4 billion), the company noted that demand in its principal markets – Japan, North America and Europe – had weakened. Slackening demand also undermined sales volume in Yokohama’s Multiple Business (diversified products) Group, which posted sales declines in high-pressure hoses, in conveyor belts, in sealants, and in aircraft products.
Toyo Tire & Rubber has made a number of revisions to the consolidated performance forecasts for the first half of the fiscal year ending March 31, 2010 (April 1, 2009 to September 30, 2009) that it released on May 11, 2009. Predicted net sales have been bumped down 7.4 per cent, or 10.4 billion yen (£69.7 million) to 129.6 billion yen (£868.3 million). Despite this reduction in sales, however, operating loss is expected to decrease from 2.8 billion yen to 1.3 billion yen (£8.7 million). Ordinary loss will also diminish, from 4.1 billion yen to 1.3 billion yen. Net loss also decreases from 4.2 billion yen to 2.0 billion yen (£13.4 million).
India’s Automotive Tyre Manufacturers Association has predicted tyre consumption in the subcontinent will grow by five to six per cent in the coming months, yet information collated by Indian based business research firm CARE Research indicates that growth may reach a slightly higher rate. According to the company’s research, India’s tyre industry is expected to grow at 6.81 per cent in the 2010 financial year and at a compound annual growth rate of 8.21 per cent until the 2013 financial year.
A Reuters report suggests that Pirelli is preparing a full separation of its tyre business from its real estate concerns in order to boost the Group’s value in the wake of improving tyre financial results. The Milanese broker Equita is reported as saying, “We believe some recent moves at the corporate level are clear pointers that will lead to a separation of Pirelli & C Real Estate PECR.MI from the group to transform Pirelli & C from a holding company to a tyre maker.” While the move is unlikely to happen in the short-term (separations of this kind generally take up to a year, says Reuters), the concentration on its tyre business could be motivated by the fact that Pirelli trails the market caps of Michelin, of whose cap the report states Pirelli’s is about a quarter at 2 billion euros, and Continental, though it is active in similar markets and sectors.
Carlisle Companies Inc. has appointed BorgWarner executive vice president, CFO and CEO Robin J. Adams to its Board of Directors. Mr. Adams also serves as a member of BorgWarner’s Board of Directors and on the Supervisory Board of Beru AG. “We are pleased to have Robin join our board,” commented Carlisle chairman, president and CEO David A. Roberts. “His wide range of financial experience and expertise, coupled with his 30 years of worldwide industry experience, will serve our shareholders well as we expand our company globally.”
Aeolus Tyre Co Ltd net profit attributable to shareholders grew 1076.26 per cent year-on-year to 124.85 million yuan (£11.033 million; 12.242 million euros; US$18.284 million) in the third quarter. In the first three quarters the company’s net profits are said to have jumped 170 per cent to 254.4 million yuan (£22.4 million; 24.943 million euros; $37.265 million). Shanghai-listed Aeolus put the exponential growth in net profits down to a significant decline in production costs.
Apollo Tyres Ltd’s second quarter 2009/10 results show the company achieved 20.46 billion rupees (£269.8 million; 296.8 million euros; $443 million) of consolidated revenue in the period, up 62 per cent over the same period last year. Operating profit totalled 2.9 billion rupees (£38.278 million; 42.151 million euros; US$ 62.872) more than tripling the 818.3 million rupees the company brought in the year before.
Onkar S Kanwar, chairman, Apollo Tyres, commented: “The steady growth achieved by Apollo Tyres despite rising raw material prices reflects the true spirit of our most valuable asset, the employees. In the quarter under review, higher raw material costs were absorbed by the company in order to protect consumers’ interest. This was possible only because of our continued emphasis on managing costs and efficiencies internally, which began in the first quarter of the last financial year.”
German vehicle spare parts manufacturer Wulf Gaertner Autoparts AG has reorganised its Meyle brand sales activities in the British aftermarket. In September the company launched its new UK subsidiary, Meyle UK Ltd. The local operation, headed by managing director David Ward, is responsible for the marketing of Meyle brand suspension and steering components, rubber-to-metal parts and brake system components. Meyle UK will, says the parent company, be able to “significantly improve supply capability of its complete range of 12,500 items to customers across UK,” including the 500 or so heavy duty parts that have been reengineered beyond their OE counterparts.
Although confirmed as the man for the job in September, the tenure of Prof. Dr. Ing. Wolfgang Reitzle as chairman of Continental AG’s Supervisory Board became official as of October 19 after his election during the day’s meeting. The Supervisory Board also made two other appointments during the October 19 meeting: Wolfgang Schäfer was confirmed as a regular member of the Continental AG Executive Board. He will take up his appointment on January 1, 2010, and will be responsible for the areas of finance, controlling, IT and law. Also assuming his position on the board next January 1 is José A. Avila, who is taking over as head of the Powertrain division.
Continental AG, is reportedly planning to sell bonds to refinance its debt. Bloomberg quoted two people “familiar with the situation” as saying the move follows HeidelbergCement AG’s so-called junk-bond sale. In this case demand outstripped supply and HeidelbergCement raised 2.5 billion euros selling its bonds. At the same time, Morgan Stanley made “large upward adjustments” to its earnings for Continental, its 2010 earnings per share predictions by 128 per cent to 2.74 euros. The analysts also raised their 2011 and 2012 estimates to 5.14 and 6.35 euros (up 52 and 32 per cent respectively). The bank’s new price target is now 37 euros, up 131 per cent from its previous position of 16 euros.
The UK automotive industry gained a boost on October 13 when Lord Mandelson’s persuaded Vauxhall’s new owner to back down on redundancy plans that could have cost 5,000 workers their jobs. Magna International made a commitment to the long-term future of Vauxhall’s Ellesmere Port and Luton plants in exchange for concessions including a two-year salary freeze. Mandelson will now commence final talks with the German Government over how much Britain will contribute to the £4.1 billion state loan the Germans have committed to back the Canadian company’s takeover of General Motors Europe.
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