The statutory negotiations concerning the lay-offs of the Nokian Tyres employees at the Nokia factory in Finland ended on the 19th November, 2008. The company decided after the negotiations to lay off its personnel for 10 days and the majority of the employees will be laid off between 21.12.2008 and 11.1.2009.
An ex-sales director at Continental Tire North America has expanded the brand profile of a tyre and service centre subsidiary of XL Tire. The Pineville Tire & Service Center of Charlotte, North Carolina has added Continental and General to its portfolio in order to enhance its brand strategy for retail tyre sales. Pineville Tire is run by Jim Seidel, the former Director of Sales for Continental Tire North America and owned by the Seidel family.
“We are growing our tyre sales business very rapidly and our customers are increasingly requesting tyres that they had on their new vehicles as original equipment. As the former director of sales at Continental I know first-hand the strength that the Continental brand enjoys at the OE level,” says Seidel, who is CEO and president of XL Tire. Pineville Tire began phasing in the Continental brand after XL Tire purchased its assets in October. The company is now rapidly adding the Continental and General marketing lines.
Goodyear Tire & Rubber has expressed its disappointment at Standard & Poor’s Ratings Services’ (S&P) decision to place the tyremaker’s credit ratings on CreditWatch with negative implications. The company was one of more than a dozen automotive industry-related firms to be added to the list due to their significant exposure to automakers General Motors, Ford and Chrysler.
“We’re disappointed in Standard & Poor’s action,” said Darren R. Wells, Goodyear’s executive vice president and chief financial officer. “There are fundamental differences between our business and the companies whose businesses are heavily tied to the Michigan-based auto manufacturers.
Specialty chemicals company Lanxess AG has increased its net sales for the third quarter of 2008, however in keeping with the current economic climate these higher sales figures have not equalled greater net income. Quarterly sales of 1.81 billion euros for the period ending September 30 represented an increase of 6.4 per cent. Pre exceptionals EBITA, at 191 million euros, was also up on last year’s 175 million euros in the third quarter. BBIT, pre exceptionals, was 119 million euros, 6.3 per cent higher than the corresponding quarter of 2007. The company’s quarterly net income of 56 million euros represented a decrease of 25.3 per cent.
In the first nine months of 2008 the Beru Group posted revenue of 324.2 million euros, a decrease of 2.2 per cent of the corresponding period of the previous year. Profit from ordinary activities (EBIT) amounted 18.8 million euros, equivalent to an EBIT margin of 5.8 per cent. In 2007 this figure and margin were 34.2 million euros and 10.3 per cent respectively. This includes one-time special items, which reduced EBIT by approximately EUR 9.8 million. Excluding those special items, adjusted EBIT amounted to EUR 28.6 million, equivalent to an adjusted margin of 8.8 per cent per cent.
Yokohama Rubber has announced experiencing a 53.7 per cent decline in operating income for the six months to September 30, 2008 in comparison to the same period of the previous year, to 5.6 billion yen (£37.7 million), despite a 1.3 per cent increase in net sales, to 256.6 billion yen (1.7 billion). Net income for this first half of the current financial year declined 95.7 per cent, to 554 million yen (£3.7 million). For the three months ending September 30, 2008, net sales were 133.5 billion yen (£898.8 million), an increase of 1.8 per cent. Operating income decreased 81 per cent to 1.5 billion yen (£10.1 million) and net income dropped from 29.5 million yen (£198,600) in 2007 to a loss of 7.03 million yen (-£47,000) in the recently concluded quarter of this year.
China Automotive Systems, a power steering components and systems supplier in China, has its first purchase order for power steering gears from a global automotive manufacturer headquartered in North America, says Aftermarket News. This first purchase order is part of a larger agreement to supply power steering gears to this automotive manufacturer.
This agreement represents a major milestone for the company, said CEO Qizhou Wu, as it is the first contract for China Automotive Systems in the North American original equipment manufacturer market. These power steering gears are intended for one model of a well-known automobile brand, according to the company.
Phase II of Yokohama Rubber’s “Grand Design 100” medium-range financial plan has been announced. The next stage of the plan, which began in the 2007 fiscal year, is scheduled to commence in April 2009, following the end of Phase I in March. The company says it will determine the details of Phase II, valid for the 2010 to 2012 financial years, and release its contents, including financial targets, in March 2009.
When the Sibur/Amtel-Vredestein (A-V) merger ground to a halt at the end of September, A-V’s lack of working capital meant it was forced to suspend production at its Kirov and Voronezh Russian manufacturing facilities. According to the most recent update, released just under a month later on 24 October, production has been suspended ever since. However, the latest reports are suggesting the company is exploring a number of creative solutions to A-V’s increasingly costly production stalemate. Meanwhile production has continued at normal levels at the un-affected Dutch part of the company, Vredestein Banden BV.
In an effort to kick start production at its Kirov and Voronezh production plants (which produce nearly 9 million tyres a year) Amtel-Vredestein is negotiating a raw material for finished product barter agreement. These plans are said to be in addition to the obvious way of reducing the high levels of debt under which the Russian part of the group continues to operate -selling the company’s assets, divisions or the group as a whole.
2009 is set to be a tumultuous, but “exciting” year for the UK tyre market. According to data supplied analysts at Plimsoll Publishing, UK tyre manufacturers and distributors need to be ready and prepared for a series of unique opportunities that will present themselves in the year ahead.
The overall tyre financial conditional of tyre manufacturers and distributors “is not in bad shape,” say Plimsoll. Sales growth is running at a little over 2.6 per cent, which is actually up on the previous year. However, it is not clear whether the latest data takes into account the full extent of the credit crunch. As the report says, “even the most bullish of companies will need to rethink for 2009.”
Ceat Sri Lanka, the joint venture company established by Ceat India, Associated Motor Ways and Kelani Tyres, will take advantage of declining world rubber prices to strengthen its position in the local car and truck tyre market. The company’s managing director, Rohan Fernando, said that “the global financial crisis has reduced global tyre consumption. Therefore, international rubber prices have also come down in view of the current financial crisis during the last few months.” With cheaper prices for the material that accounts for 40 per cent of a tyre’s construction, Ceat’s production costs are expected to drop.
On November 5 Standard & Poor’s lowered Goodyear Tire & Rubber’s credit rating outlook from “positive” to “stable” due to decreasing demand for tyres. Goodyear’s long-term corporate rating remains at BB-, three grades below investment quality, the financial market intelligence provider said in a statement.
Canadian Tire Corp, the northern North American tyre store that sells everything from dog food to gym equipment, has a new president and CEO. Stephen G. Wetmore was appointed to the position on November 5, replacing Tom Gauld, who had served in the role since 2006. Prior to his latest role, Wetmore served as CEO at Bell Aliant Telecommunications, a subsidiary of Canada’s largest telecommunications company, BCE.
According to one US newspaper, Cooper Tire & Rubber is expected to announce by January 19 which of its four US factories faces closure. The Northeast Mississippi Daily Journal reports that the unionised Findlay and Texarkana, and the non-union Albany and Tupelo plants have been, or are to be, visited by Cooper officials, with information packages on each facility to be delivered to the company by December 1.
According to sources reporting to Israel based business daily Globes, Alliance Tire Company has laid of dozens of temporary employees and intends to lay off “a considerable number of veteran employees”. This action is being taken, reports Globes, following a sharp fall in orders.
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