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Goodyear Losses Ahead of Analysts’ Predictions

Goodyear Tire & Rubber Company has reported first quarter 2009 sales of $3.5 billion, down from record sales of $4.9 billion in first quarter of 2008. However, Goodyear only reported net losses of $333 million, compared with Goodyear net income of $147 million (60 cents per share) in the 2008 quarter. While obvious significant the losses certainly weren’t as bad as they could have been for two reasons. Firstly, they were, according to financial news sources, ahead of mainstream analysts’ opinions; and secondly because the total losses are roughly equal to the increases in raw material costs the company experienced in the first quarter ($332 million, up 31 per cent). The explanation for greatly reduced turnover was said to be the tyre market’s sharply reduced demand in at the start of 2009, however as various sources are predicting that the US market has bottomed-out and raw material prices are believed to have stabilised, Goodyear could be in for a better second quarter.

29th April 2009/by Tyrepress Editors

Goodyear Added to JPMorgan SMid Money List

Goodyear Tire & Rubber was one of three companies whose stocks financial services firm JPMorgan added to its small and mid-cap money list on April 24. According to JPMorgan, Goodyear was added to the SMid Money list, as it is likely to benefit from a market rotation into cyclicals from defensives. Following the announcement shares in Goodyear surged 11 per cent to US$10.91.

28th April 2009/by Tyrepress Editors

UK Scrappage Scheme “May Appeal to 1.5 Million”

With a UK scrappage incentive scheme to help boost the automotive industry to be introduced next month, information and marketing analysts Experian have evaluated its potential impact. Owners of vehicles over ten years old can claim a £2000 cash incentive to trade in their car for a new one. In order to be eligible for the scheme, the driver must have owned the vehicle for at least 12 months. Experian’s analysis of over 34.7 million vehicles currently on the UK roads has found that 7.1 million privately owned used vehicles will be eligible for the scheme. However, the company’s analysis shows that not all the owners of these vehicles would be in a position to take advantage of the scheme as there are number of other factors to consider.

24th April 2009/by Tyrepress Editors

March Sales Give Pirelli a Glimmer of Hope

Upon reporting its first quarter 2009 financials, Pirelli commented that its tyre division experienced “signs of recovery” in March; these indications of better times came in the form of a slowdown in sales decline in some countries and positive growth rates in others. Various government incentives to boost new car sales partly contributed to this reversal of fortune following OE business contraction in the first two months of the year, Pirelli comments.

22nd April 2009/by Tyrepress Editors

Tyrexpo Asia 2009: “We have no Hesitation”

“In these hard times we are very happy that…” – So begins the organiser’s summary of Tyrexpo Asia, which during its seventh running attracted 2,985 visitors (a decrease of 5 per cent on the last time) and 135 exhibitors (an increase of 8 per cent) within an exhibition space unchanged from 2007. While these figures highlight how the exhibition developed, they only show a single snapshot. The sense of increased hesitation to spend money on travelling to and exhibiting at a show was in line with what one would expect in the current market situation. But what bare numbers do not depict is ‘visitor quality’, something that both the organiser and exhibitors noted to be “superior to very good.” Furthermore, Tyrexpo Asia also provided an ideal platform for tyre wholesalers and their suppliers.

22nd April 2009/by Tyrepress Editors

MRF Lands OE Deal with Military Aircraft Manufacturer

MRF, the first Indian tyre manufacturer to produce aviation tyres for military aircraft, has secured an order from Hindustan Aeronautics Limited (HAL), one of Asia’s largest aerospace companies. The initial supply contract, reports the Financial Chronicle, is for some 400 to 500 tyres for HAL’s Chetak multi-purpose helicopter. India’s defence authorities have also reportedly asked the company to develop tyres for other types of military aircraft.

14th April 2009/by Tyrepress Editors

Prison for Tyre Dumping Ex-Policeman

A former Police inspector faces a year in prison for his role in the dumping of 175,000 tyres. Geraint Evans, who retired from the Police in 2005, was one of three people sentenced at Cardiff Crown Court on April 8 for illegally disposing of tyres at sites in England and Wales. Also sentenced were Norman Cassidy, who received an eight-month prison sentence, and Evans’ partner Marilyn Hanks, who has been ordered to perform 240 hours of community service.

“You are thoroughly unscrupulous men with no regard whatsoever for the financial consequences of those you exploit,” commented Judge Stephen Hopkins QC, referring to Evans and Cassidy. “You were deliberately dealing in waste without a licence for purely financial reason and it’s had a substantial impact on the community.”

9th April 2009/by Tyrepress Editors

TMD Friction Acquired in Equity-backed Management Buy Out

On 3 April TMD Friction was bought out in an all equity acquisition led by its senior management team and Pamplona Capital Management, a London-based investment fund. According to a company statement, the move will safeguard approximately 3,800 jobs worldwide. Completion of the acquisition is expected by the end of April.

TMD Friction manufactures disc brake pads and drum brake linings for passenger cars and commercial vehicles, together with brake pads for racing cars, and friction materials for industrial and rail applications. TMD Friction supplies global automotive and commercial OEMs across a wide range of vehicle platforms. The company is also one of the largest suppliers to the global aftermarket with its Textar, Pagid, Mintex, Don, Cobreq, and Cosid brands. The company operates from locations across Europe, the US, Brazil, Mexico, China and Japan.

9th April 2009/by Tyrepress Editors

Retreading ‘Definitely Worth Considering’, says Conti

Numerous companies have experienced a drop in orders since the start of the financial crisis, and this downturn in business has in many cases been paired with rising costs. Economising is therefore of the utmost importance in 2009. But where should we start? Continental is convinced that truck tyres can still offer the transport industry considerable savings potential in overall operating costs. A second tyre life almost doubles the mileage and reduces costs by up to fifty per cent.

8th April 2009/by Tyrepress Editors

Downturn and Rising Raw Material Costs Lead to Alcoa Loss

Alcoa has reported a 27 per cent sequential drop in revenue, resulting in a loss of US$480 million for the first quarter of 2009. This figure, says the company, reflects the impact of the economic downturn on its core industrial and commercial markets as well as an historic decline in aluminium prices. Revenues for the first quarter 2009 were $4.1 billion, down from $5.7 billion in the fourth quarter 2008 and down 36 per cent from revenues of $6.5 billion in the first quarter of 2008 (after excluding divested businesses). The sharp drop in revenue resulted from the impact of the economic downturn on Alcoa’s end markets, including the automotive industry.

8th April 2009/by Tyrepress Editors

Schaeffler Negotiates 1 billion euros of Credit

On 7 April Schaeffler Group finalised a 1 billion euro loan agreement with its banks. “With the 1 billion euro credit line we have gained further flexibility for Schaeffler Group,” said Klaus Rosenfeld, group CFO at the automotive supplier, adding: “The conclusion of the loan agreement is an important sign of trust from our banks.” According to a statement issued by Schaeffler’s press office, all parties involved have agreed on strict confidentiality regarding further details of the loan agreement.

While the new financing is likely to help the company shore up its financial position, last year Schaeffler borrowed 16 billion euros to finance the takeover of Continental AG, but when the automotive markets spirally and the company’s share price nosedived Schaeffler was left with high debt service payments in the midst of an automotive industry crisis. This led the company to request support from the German state and federal government. In February co-owner Georg Schaeffler said the group needed up to 6 billion euros in fresh financing.

8th April 2009/by Tyrepress Editors

Michelin Withdraws From Shanghai Motor Show

The Michelin Group has withdrawn from April’s Auto Shanghai 2009 motor show, reports Chinese news outlet Sina Corporation. The company has attended the show during the past decade and maintained a significant presence there. A member of Michelin’s public relations team stated that the company will cut back on its exhibition presence this year. “The whole industry is in difficulty and we also have to do some adjustment and scale-down,” the representative explained. Michelin is, however, still scheduled to attend the IAA show in Frankfurt, Germany, in September.

7th April 2009/by Tyrepress Editors

ATD to Sell 37 Retail Outlets

US based tyre wholesaler and distributor American Tire Distributors Holdings (ATD) intends to sell the 37 retail outlets it acquired in 2008 as part of its purchase of Am-Pac Tire Distributors. In a financial filing with the US Securities and Exchange Commission, the company states: “The acquisition of Am-Pac Tire also added 37 retail stores, predominately in the St. Louis, Missouri and Southern California areas. As these stores are not core to the Company’s business, management’s intention is to divest of these stores during 2009.”

7th April 2009/by Tyrepress Editors

Michelin North America Releases New HydroEdge

According to Michelin North America, its newly released HydroEdge tyre range delivers up to 33,000 more miles than its competitor the Goodyear Assurance ComforTred. On top of this, the company says the HydroEdge stops up to 14 feet shorter than its competitor and is the most fuel-efficient tyre in its category. All in all, says Michelin, the new tyre offers consumers even more than the previous generation while providing the confidence consumers expect from its premier large passenger car and minivan tyre.

6th April 2009/by Tyrepress Editors

US Retailer ‘Big 10 Tires’ Files for Chapter 11 Bankruptcy

Southeast US based independent tyre retailer Big 10 Tire Stores has filed for ‘Chapter 11’ bankruptcy protection. In a statement released on April 2, the company said that it has “filed voluntary petitions for reorganisation under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the district of Delaware.”

The company reports it has “adequate cash” to continue paying for the day-to-day goods and services it needs to operate and to serve its customers following the securing of financing from an affiliate of Sun Capital Partners. The petition was filed, Big 10 adds, to improve its capital structure and reduce debt, strengthen its financial and competitive position, and ultimately to get the business back on a growth track. The company says it will operate as usual at its retail locations during the reorganisation period, and will continue to honour all product and service warranties.

3rd April 2009/by Tyrepress Editors