North America
(Akron/Tire Review) Pirelli has been named the OE tyre for Mercedes-Benz’s ML550/350 and R350/320CDI vehicles, which will be produced at the carmaker’s US plant in Alabama. The tyremaker will supply Mercedes-Benz with its Pirelli Scorpion Assimetrico in size 255/50R19 103W, which will be produced at Pirelli Tire North America’s MIRS plant in Rome, Georgia.
(Akron/Tire Review) Michelin North American introduced the XDA5 drive position radial, which it said has a tread design that will “regenerate” itself during use, and will “outlast the drive tyre it replaces by at least 30 per cent.”
Michelin said the tread pattern of the XDA5 is molded in three dimensions, and as the tyre wears, the tread reveals new grooves and tread blocks.
“This regenerating tread design keeps the tyre in service longer before retreading, an impressive 30 per cent improvement in tread life over other drive tyres that are commercially available,” the company said. “That translates into improved safety and lower costs for fleets and owner operators across North America.”
The tyre’s “double-wave matrix” sipes give the tyre’s 30/32-inch tread blocks the ability to lock together in all directions, Michelin said, for rigidity, resistance to scrub and minimised irregular wear.
Hayes Lemmerz International, Inc. has been recognised by Nissan North America as one of its top suppliers in the US. The Hayes Lemmerz automotive steel wheel facility in Sedalia, Missouri received a 2007 Quality Master Certificate in recognition of being among the carmaker’s top suppliers based on quality evaluations from Nissan’s North American Engineering, Manufacturing, Product Quality, Production Control and Purchasing divisions.
The award is based on year-long evaluations of supplier systems, incoming quality, response time, cost reductions capability, design support, timely shipments, product performance and Nissan’s own vehicle evaluation system. Additionally, the Hayes Lemmerz Sedalia Operations and the Company’s automotive brake facility in Apodaca, Mexico were named 2007 Nissan Zero Defects Award winners. The Zero Defects Award is presented to suppliers that ship fewer than three defective parts per million in the course of a year.
Further expansion is already planned for Goodyear’s tyre facility in Dalian, China. This news comes at a time when the plant’s previous 1.06 billion yuan (£70 million) expansion project is nearing completion. This new project will be the third expansion at the plant since it was established in 1995.
“By the end of this year, the daily output of the plant will be 17,000 units,” said John Gonsalves, quality and technology manager of Goodyear Dalian Tyre Co. “We plan to increase the output next year,” he added.
“About 30 per cent of the products will be exported to Asia-Pacific region, Germany, India, Egypt, Israel and North America. However, the total exports are expected to decrease later,” Gonsalves said. “China will be our main market rather than export markets.”
Goodyear’s OE customers in China include Chery Automobile, Shanghai VW, FAW-VW, Great Wall Automobile and Brilliance Automobile.
Michelin North America has announced upcoming price rises for its replacement market motorcycle and scooter tyres. As of the start of next year prices for these items will increase by 8 per cent, with these new prices applying to all tyres invoiced after January 1.
The tyremaker has not disclosed its reasons for the price rise, however the announcement comes at a time when raw material prices are once again on the rise.
Michelin plans to capitalise on the energetic Mexican automotive market through investing US$740 million over the next four years in the establishment of a new factory. The tyremaker will set up the plant in Silao, in the central state of Guanajuato, and production is scheduled to begin in 2010. According to Jim Micali, chairman and president of Michelin’s North America unit, the new factory will employ 1,300 staff and produce passenger car and SUV tyres for the domestic and US export markets.
“This is one of the most dynamic automotive and tyre markets in the world,” said Micali during in a ceremony with Mexican President Felipe Calderon. Numerous car manufacturers, including the US “big three”, have adopted Mexico as a low cost manufacturing base for exports to the US and other markets. Michelin said in a statement that the Guanajuanto facility is part of a $1.2 billion investment plan for the region.
Yokohama Rubber posted a 150.2 per cent increase in net income, to 3.1 billion yen (£12.8 million), in the three months ended June 30 (the first quarter of the present fiscal year) compared with the same period in 2006. The company’s operating income increased 130.6 per cent to 4.3 billion yen (£17.7 million) and net sales rose by 13.8 per cent to 121.6 billion yen (£502.3 million). The company reports that the overall rise in sales was led by growth in markets outside Japan and in Yokohama Rubber’s Multiple Business (diversified products) Group.
Operating income in Yokohama’s Tire Group tripled in the first quarter, to 3.1 billion yen (£12.8 million) on the back of a 15.9 per cent increase in sales to 90.7 billion yen (£374.7 million). Leading the sales growth were gains in North America, Europe, and Asian (excluding Japan) markets. The sales growth, coupled with the weakening of the yen and price increases for Yokohama tyres, more than offset the continuing upward trend in prices for natural rubber and other raw materials.
(Akron/Tire Review) Michelin North America announced plans to spend as much as $350 million on improvements and expansion projects at all of its “major manufacturing facilities” in South Carolina. The four-year project will add some 100 jobs, the company said.
While MNA didn’t give plant-by-plant specifics, the company did say that the project includes capacity boosts for its OTR and X One super wide tyres. Other aspects of the project will boost production of tyre components at its semi-finished goods plants, and general improvements.
The company said its investment and job growth is based on finalising agreements with state and county governments.
“With increasing competition from Asian imports and high raw material costs, Michelin will remain competitive in North America by continuing to manufacture tyres in more efficient operations with skilled professional employees,” said Jim Micali, MNA chairman and president.
(Akron/Tire Review) Continental Tire North America will be the sponsor of the media centre at the 2007 SEMA Show. Located near the show floor and specifically designated for qualified journalists covering the event, the Continental Tire Media Experience provides access to exhibitor publicity and media materials, complete with newsroom equipment for those who file stories during the show. The centre will have Internet and phone access, computers, copy and fax machines; exhibitor media kits available for all media personnel; and interview and meeting areas, refreshments and lounge areas.
Following a US court ruling Continental Tire North America has been given the responsibility of compensating the healthcare expenses of a number of retired employees from plants in Ohio, Kentucky, North Carolina and California. The US district court in Toledo, Ohio decided that the company improperly reduced the health benefits of 3,000 former CTNA employees and their spouses.
Lawyers for the plaintiffs claimed that the CTNA decision to reduce the former employees’ health benefits resulted in couples not old enough to qualify for subsidised ‘Medicare’ health care (the minimum age for eligibility is 65) paying as much as US$1,000 a month for insurance. Many former employees were reportedly unable to afford these costs and thus were compelled to drop their healthcare cover.
Continental Tire North America plans to raise prices for US market tyre lines, including Continental and General brand passenger car and light truck tyres, by up to 6 per cent. The price increases will take effect on October 1.
The company reportedly attributes the price hike to the industry’s usual suspects – an escalation in transportation and raw material costs, including natural rubber.
(Akron/Tire Review) Continental AG expects its North American unit – Continental Tire North America – to post a profit for 2007. According to an AFX report, Conti CFO and CTNA President Alan Hippe said “There is a chance of it,” when asked about CTNA’s expected improvement.
If CTNA does post a profit for the 2007 year, it would be the company’s first in this decade. The company did say that sales growth has been slowed by reduced orders for OE tyres from automakers, reflecting a general downturn in the North American car market.
Marangoni Tread North America has finalised purchase of its current manufacturing facility premises in Madison, Tennessee. This transaction concludes a process of expansion and development at the facility as part of the company’s declared aim of further strengthening its presence in the North American market.
The purchase of the 80,000 m2 (including a covered surface area of 14,000 m2) premises required an investment in the region of US$5,000,000. As a result of the purchase, the warehouse, which was previously contracted out, can now be managed directly. Marangoni hopes efficiency in the clearance of customer orders can thus be improved.
Recent expansions to the facility that saw its surface area triple will lead to an increase in production output and double production capacity over the next two years. “Now, approximately 75 per cent of the North American demand can be met locally”, said Bill Sweatman, chairman of Marangoni Tread North America. “This expansion will help us to further improve our response to customer service requirements.”
Financial analysts are predicting Michelin will continue to grow its retread business following the purchase of Cooper Tire & Rubber subsidiary, Oliver Rubber Company. “This would mean that Michelin is growing in the tyre retread business,” Deutsche Bank analysts wrote, adding: “The group has currently approximately 700 million euros of revenues in retread. This is potentially a very interesting market which should grow (penetration rate of only 37 per cent in Europe versus 85 per cent in North America, and should be highly profitable [with] significantly less capital expenditure and raw material costs. We believe that this strategic move will give vertically integrated tyre Co a significant competitive advantage.
Michelin North America, Inc. has announced that it has signed a definitive agreement to acquire Oliver Rubber Company, the Cooper Tire & Rubber Company tread rubber and retreading equipment subsidiary, for $69 million. The acquisition is subject to final due diligence as well as Federal Trade Commission and U.S. Department of Justice approval. Following the acquisition, Oliver will operate as a subsidiary of Michelin North America, Inc.
According to an official statement on the subject: “This acquisition will complement the manufacturing capability and service network of Oliver with that of the Michelin Retread Technologies (MRT) network, enabling Michelin to extend its reach in the growing commercial retreading market. In 2005 Michelin announced a major expansion of its tread manufacturing facility in Covington, Ga. and, earlier this month, the opening of a new manufacturing facility in Mexico.”
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