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BERR Reshuffles Ministerial Responsibilities

Just days after Peter Mandelson returned to cabinet for a record third time, the new Secretary of State for Business, Enterprise and Regulatory Reform outlined who would be doing what at BERR. Here are two highlights of significance to the tyre business:

Ian Pearson MP is moved to Economic and Business Minister (jointly with HMT) and will take responsibility for a wide portfolio of business sectors including aerospace, marine and defence; automotive; sustainable development and regulation export control and Export Credits Guarantee Department.

9th October 2008/by Tyrepress Editors

Maxxis Ranked 6th Top Taiwanese Global Brand

For the sixth consecutive year, Maxxis has been ranked among Taiwan’s top global brands in a list sponsored by Taiwan’s Ministry of Economic Affairs, Maxxis appears in sixth place on the 2008 list, the only tyre manufacturer to make the grade.

The list uses qualitative and quantitative financial analyses to determine a brand’s value. At $346 million US, Maxxis’ appraised brand value grew by 12 per cent over the previous year. Maxxis has been ranked among Taiwan’s top ten global brands since the list was first published in 2003. In 2007, the list was expanded to include 20 companies.

8th October 2008/by Tyrepress Editors

Schaeffler to Apply for Antitrust Clearance

Following renewed talks with the EU Commission, the Schaeffler Group expects to submit the final draft of its antitrust clearance application (relating to its Continental AG purchase) during the course of the next week. The statement from Schaeffler’s Herzogenaurach headquarters could be seen as the company’s answer to reports that investors are concerned about the speed of Schaeffler’s application to the EU. 48 hours earlier the Financial Times reported hedge funds associated with Schaeffler’s takeover of Continental are “becoming increasingly nervous about the potential 12 billion (£9.4 billion) deal closing.”

Schaeffler’s statement says the group believes it is in the best interests of both company to achieve “a rapid conclusion of the process by preparing the notification in the best possible manner.” Explaining the delay of the group’s submission to the EU, the statement added: “…the EU Commission asked Schaeffler to specify the worldwide potential relations between products in neighbouring markets and corroborate this statement with financial figures. Since corresponding information is not centrally available at Continental AG, the compilation of such information is a time-consuming procedure.

8th October 2008/by Tyrepress Editors

Reports: Continental Looking For a Tyre Business Partner

The future of Continental AG as it stands hangs in the balance after the tyre and automotive supplier hired investment bank Perella Weinberg to seek out a potential buyer for the ‘rubber’ branch of the business. An unnamed source told Financial Times Deutschland that Continental’s move is: “less a question of selling it than of finding possible partnerships.” Media speculation has linked both Michelin and Bridgestone to a possible deal, but there have been no confirmed reports of offers or even negotiations. Schaeffler’s most recent press statements emphasise the group’s merger with Conti as “mutually beneficial”. Continental has not officially responded to the reports.

8th October 2008/by Tyrepress Editors

Phillips Carbon Black Commissions New Power Plant

Phillips Carbon Black has invested in a means of converting excess gas into energy and financial savings. The India based company has announced the commissioning of its 30 MW co-generation power plant Durgapur, in the state of West Bengal. The Rs 1 billion (£11.6 million) facility, which utilising the waste gas produced during the process to generate power, was commissioned on September 29.

3rd October 2008/by Tyrepress Editors

US Passenger Car Sales fall 27% in September

The US auto industry has sustained considerable sales haemorrhaging in September, with figures plumbing 15-year depths, while US Department of Transportation year-on-year figures reveal that driving miles by Americans continued to fall in July 2008. In addition the harbingers of doom were prevalent among top car manufacturers: BMW, Ford and Renault all agree that the slump could be the beginning of a more sustained slump than previously predicted.

Financial news sources site comments from Norbert Reithofer, Alan Mulally and Carlos Ghosn – the CEOs of the three aforementioned giants – suggesting that predictions of a swift recovery may have to be put on hold. Ghosn told journalists at the Paris Auto Show, “We don’t know if we’re at the beginning of the end or the end of the beginning,” turning down requests to reiterate earnings targets.

3rd October 2008/by Tyrepress Editors

BFGoodrich Expanding Facility Despite Shutdown

BFGoodrich is going ahead with the expansion of its Tuscaloosa, Alabama facility despite a temporary shutdown the company attributes to numerous factors. A temporary raw material supply shortage in the wake of Hurricanes Ike and Gustav is named as the main culprit for the two week factory closure, however market factors are also to blame, reports BFGoodrich public relations director Lynn Mann.

3rd October 2008/by Tyrepress Editors

Micheldever Chooses Syncron Supply Chain Management Software

Micheldever Tyre Services, arguably the UK’s largest tyre wholesaler operation, has selected Syncron software to reduce inventory levels, increase availability and reduce operating costs. Micheldever has reportedly licensed Syncron’s Supply Chain Planning solution to achieve more efficient management of its supply chain. According to the company, the new system will help Micheldever reduce inventory levels, increase availability and reduce the cost of purchasing. The solution is also expected to reduce the amount of inter-location trucking between Micheldever distribution network outlets.

3rd October 2008/by Tyrepress Editors

Continental Executive Board Announces Reorganisation

Executive Board of Continental AG says it has opened up broader future options for itself by reorganising the duties of its members to greater concentrate on two core business fields. As of October 1, 2008, Continental Executive Board chairman Dr. Karl-Thomas Neumann will take the reins of the Automotive group, consisting of the Chassis & Safety, Interior and Powertrain divisions. On the same day, deputy chairman Dr. Alan Hippe will take on management of the Rubber group, made up of the Passenger and Light Truck Tires, Commercial Vehicle Tires and ContiTech. Conti’s Supervisory Board of the company took assenting note of this new task allocation as decided by the Executive Board on September 30. The Supervisory Board also extended Executive Board member Dr. Hans-Joachim Nikolin’s term of office until May 2014.

1st October 2008/by Tyrepress Editors

Amtel-Vredestein Sibur Deal Off

The Amtel-Vredestein Sibur-Russian Tyres deal has now officially been called off, according to a company filing to the London Stock Exchange published on 30 September. The plan had been to merge the two companies in order to make a $2 billion a year tyre firm with over 30 per cent domestic market share and access to high performance technology and European markets through Vredestein.

Amtel-Vredestein’s confirmation that the deal is off followed news reports that the deal was faltering due to a lack of the credit necessary to fulfil the deal’s financial terms and conditions. However, the statement also struck an optimistic note: “The company is actively considering a number of options and it is expected that a further announcement will be made in due course.” Yesterday Amtel-Vredestein’s press department in Russia told Tyres & Accessories that the company had not walked away from the deal. “It is an ongoing work in progress,” they explained.

1st October 2008/by Tyrepress Editors

Settle for Reduced Margins or Scale Down

UK tyre market analysts, Plimsoll Publishing are characterising the difficult market conditions of 2008 as a recipe for failure, with companies facing a stark choice: hold on to sales at reduced margins, or reduce in size and scale. To put this into context, 67 of the 201 firms analysed in the company’s latest report are losing money, a direct consequence of rising costs and price reductions set against a slowing market. The net effect? Increased merger and acquisition activity.

Senior analyst David Patterson points to the amount of tyre manufacturers and distribution firms using an overdraft as a permanent means of finance as a dangerous position for any companies to place themselves in. The banks are taking a critical look at all unsecured finance and are reassessing their exposure to small businesses- this could leave these firms in a position where their overdraft would need paying back on demand. Acording to Patterson, many of these firms simply cannot afford to do this.

1st October 2008/by Tyrepress Editors

Amtel-Vredestein/Sibur Merger in Trouble

The proposed merger of Russian tyre manufacturing giants Amtel-Vredestein and Sibur Russian Tyres looks to be faltering after reports from news agencies Interfax and Reuters suggested Sibur had walked away from the deal. The plan had been to merge the two companies in order to make a $2 billion a year tyre firm with 30 per cent domestic market share and access to the European markets through Vredestein.

Reuters quoted an unnamed source as saying: “As far as I understand Sibur decided not to move forward with the initial agreement.” Sibur Russian Tyres representatives could not be reached for commented. However, Amtel-Vredestein’s press department in Russia told Tyres & Accessories that Amtel had not walked away from the deal. “It is an ongoing work in progress,” they explained.

30th September 2008/by Tyrepress Editors

Accuride President Resigns, Company Restructures

Accuride has announced the resignation of John Murphy as president and CEO and director of Accuride, effective 22 September 2008. Upon acceptance of Murphy’s resignation, Accuride’s board of directors appointed William (Bill) Lasky as interim president and CEO. At the same time, the wheel manufacturer also announced that it is embarking on restructuring programme that will eliminate a total of 392 positions, or 11 per cent the company’s workforce. This includes 159 salaried positions (18% of current level) and 233 hourly employees (9% of current total).

As a result of the restructuring programme, the Company expects to incur a one-time restructuring charge of approximately $14.3 million in the third quarter of 2008 of which a total of $10 million will impact cash during 2008 and 2009. However, the company expects that the restructuring will save an estimated $6 million in 2008 and generate annual cost savings of approximately $27.5 million thereafter.

25th September 2008/by Tyrepress Editors

UPDATE: Continental Complete Spikes Acquisition

Having attained the approval of antitrust authorities, Continental has completed the acquisition of all shares in the Finnish spikes manufacturer TIKKA Spikes Oy, along with its Russian subsidiary OOO TIKKA, based in St. Petersburg. Financial details of the takeover have yet to be released.

18th September 2008/by Tyrepress Editors

Bridgestone Bandag Releases Fuel Economy Guide

With fuel moving into the lead as a fleet’s top expense, Bridgestone Bandag Tire Solutions (BBTS) is releasing its fourth comprehensive fuel economy guide for large trucks. “Tires & Truck Fuel Economy – a New Perspective” looks at what BBTS has learned after 25 years of studying the relationship of tires to large truck fuel economy, the company said.

The guide provides fleet customers with practical recommendations that take into consideration the real-world factors affecting fuel economy, according to Singh Ahluwalia, president of sales and marketing for BBTS. “There’s no one single thing you can do to be a financial success in the trucking business, and there’s no one single thing you can do to maximize your fuel economy,” he said. “The good news is, practically everyone can do a better job of getting the most out of a gallon of fuel.”

The guide also addresses how speed affects fuel economy, how to select the best tyre for a fleet operation, and how to balance the cost of tyres over their lifetime with their affect on fuel economy, BBTS said. Fleets who wish to receive a copy can ask their Bridgestone Bandag sales representative, call 1-888-694-0469 or visit bridgestonetrucktires.com. (Tire Review/Akron)

17th September 2008/by Tyrepress Editors