Nokian’s decision to reduce its Finland-based tyre production output from 6 million to 4.5 million tyres will be coupled with increased Russian capacity, financial analysts have reported. According to a recent Deutsche Bank report, “[Although] current demand is smaller than Nokian’s capacity…Nokian is reacting quickly by reducing capacity in order to maintain a high proportion of high priced products.”
The US based tyre chain Les Schwab Tire Centers announced on December 8 that its new company headquarters office located in Bend, Oregon, opened for business on Monday, November 17, 2008. Over 100 employees relocated to a 123,000 square-foot office building in the north end of Bend. The remaining 220 corporate employees move to the building on December 15, 2008.
“The new headquarters office is part of a transition beginning in 2007 to ensure the people, facilities and programs are in place to support our tyre centres and their ability to continue providing world-class customer service,” said Dick Borgman, CEO of Les Schwab Tire Centers. “With our new headquarters we will continue to attract and retain the talented employees needed to support our retail network of 420 stores and to accommodate future growth.”
Outgoing president George Bush’s administration has reportedly reached a tentative agreement with democratic leaders to help carmakers GM and Chrysler stay afloat. The announcement follows the news that 533,000 jobs were lost in November and president-elect Obama’s announcement of the US’s biggest infrastructure investment since the US highway system in the 1950s. Obama has not to put a full cost on his plan advisers estimate it will be over $700 billion (£477 billion) and could even top to $1 trillion.
Deutsche Bank analysts suggested the LTFVUSA Act (Long term Financial Viability of US Automakers) would be comprised of two rounds of financing: “Short term bridge financing that would carry the automakers through 31 March and longer term funding that would be predicated on the plans for long term viability, which will be assessed by an auto industry financial viability advisor.” The effect the latest plans will have on declining OE tyre orders is far from clear.
Special chemicals group Lanxess AG has announced the formation of an alliance with Japan-based Tokyo Zairyo to sell rubber chemicals to Japanese companies engaged in the industrial rubber product sector within China. This cooperative agreement took effect on December 1, and the German company expects that the partnership will also help its sales in Japan and other Asian countries.
Standard & Poor’s Ratings Services said it has affirmed Giti Tire’s “B+” long-term corporate credit rating with a “negative” outlook, based upon the company’s weak financials going into 2009. It also affirmed Giti’s “B-” foreign-currency issue rating on the company’s unsecured notes. Furthermore, Standard & Poor’s says all Giti’s ratings have been removed from CreditWatch, where they had been placed with “negative implications” in September.
Next year the MSA Scottish Rally Championship will gain the backing of Hankook Tire – and the manufacturer is apparently already considering extending the sponsorship deal further. Hankook replaces the County Saab motor group, following five years’ involvement, as the championship’s main sponsor.
“We are delighted to be focusing our attention in 2009 on the Scottish Rally Championship,” said Hankook motorsport manager Mike Patterson. “The series attracts some intense competition and the enthusiasm and professionalism of the organising team has been instrumental in finalising this deal.”
According to the Rubber Manufacturers Association, US tyre shipments are projected to decline by more than six per cent this year compared with 2007, with a further one per cent decline predicted for 2009. Total tyre shipments were below 300 million for the first time since 1997, when shipments were 290 million units.
The decrease in tyre shipments, says the RMA, reflects the sharp downward revisions in the domestic economic conditions predicted for both the consumer and commercial sectors. Overall, combined OE and replacement tyre shipments for 2008 light vehicle and truck categories are anticipated to decrease by more than 20 million units to approximately 290 million total shipments, compared to the 310 million total shipments in 2007. A further slight decline of approximately three million total units to nearly 287 million total units is anticipated for 2009 as an economic rebound is unlikely to occur until the latter half of the year.
The Trade Group boasts a wealth of experience in every area of garage equipment and, the company believes, nowhere more so than in wheel care products. As Trade Group spokesman Terry Bullworthy explains, “We not only select and specify the most advanced, most user friendly and most cost effective equipment but we will always offer our customers a choice to suit their budgets and because of this our range includes market leaders Hofmann Megaplan, Beissbarth and also the newly introduced range of Trademaster tyre and wheel equipment.
The NTDA (National Tyre Distributors Association) has published the results of a members survey, which shows that UK tyre retailers are battening down the hatches to avoid the pain of the looming recession. “Even though it’s the early days of the recession, the answers to our survey indicate that tyre retailers are battening down the hatches and are expecting a tough time ahead,” association director, Richard Edy commented.
Two thirds (66%) of those questioned said that they have reduced their capital expenditure, while 62 per cent have postponed the purchase of equipment. When it comes to the workforce, just over half of the businesses (55 per cent) have reduced staffing levels and 50 per cent have awarded pay rises below the level of inflation. 45 per cent reported that they had reduced staff hours or cut overtime.
Axle Group Holdings Ltd has published the appointment of Peter Harries as group executive director. Harries’ principal role will be “to develop and implement purchasing strategy to maximise growth and strengthen supplier relationships for the group, which includes National Tyres and Autocare, National Fleet and Viking International.”
The Dubai based Juma Al Majid Group has celebrated 50 years of business with Yokohama tyre. The group, dealers for the Japanese brand in the United Arab Emirates, marked this milestone on November 27.
“There are different kinds of companies,” commented Juma Al Majid, founder and chairman of the group. “One type looks for its own benefit, but when there is a company that looks out for both sides, it can maintain the relationship for 50 years and more.”
Franchised car dealers across the UK have responded to the downturn in the economy by freezing pay scales, according to the rts Auto Retail Industry Salary Survey 2009. The survey reports that 25 per cent of franchised dealer respondents did not increase basic pay for their staff between 2007 and 2008. More than that, it seems that dealers have been taking advantage of the industry’s high staff turnover rates to actually reduce pay rates for new recruits.
The situation at Dunlop India’s closed Sahagunj factory, reported this week on Tyrepress.com, looks to be at a standstill. India’s Financial Express is reporting that the two major trade unions at the factory – Citu and Intuc – have decided not to sign a bipartite agreement with the plant’s management. Both unions, it is reported, want the Indian government to be included in a three-party meeting.
The paper quotes Dipanker Roy, Dunlop Workers’ Union (Citu) general secretary, who said that he would be communicating with the country’s labour minister, adding that, “We have been to the [Dunlop factory] office to discuss the management’s proposal, but no one from the decision-making body was present.” Workers remain at home with the offer of a 2,000-rupee monthly grant from the company’s management, which followed the suspension of production.
ArvinMeritor reports achieving sales of US$1.72 billion in the quarter ending September 30, an increase of 8 per cent on the corresponding quarter of 2007. Operating income during this, the company’s fourth quarter, is reported as $40 million, up from the previous year’s quarterly loss of $16 million. The vehicle systems and components manufacturer’s net loss, however, was substantially larger than in the fourth quarter of 2007, standing at $153 million, as opposed to $62 million.
For the full financial year to September 30, sales were $7.167 billion, up 11.1 per cent from the 2007 year. ArvinMeritor attributes this improved result to strength in Europe and South America. The company’s operating income of $186 million showed a 251 per cent improvement, and net loss, at $101 million, was far lower than in 2007, when a net loss of $219 million was recorded.
Job cuts are said to be a possibility at Pirelli & C. SpA. According to Italian labour union Filcem, whose comments have been published by Bloomberg, the company will eliminate approximately 200 administrative jobs in Milan and will probably continue to idle plants to counter a global drop in demand.
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