North America
Delphi CEO Steve Miller has predicted Delphi, the world’s largest car parts manufacturer, could enter bankruptcy by 17 October unless the United Auto Workers union and GM agree on a relief plan. Robert “Steve” Miller Jr came out of retirement in Oregon to lead Michigan-based Delphi.
Continental AG chief executive, Manfred Wennemer, plans to raise tyre prices between 3-8 per cent in the fourth quarter of this financial year, various news sources have reported. The increases “will take place in the last quarter of this year, most likely in November,” Wennemer told the magazine the German Autowoche magazine.
He also said that the price increases are likely to take place somewhat earlier in the US. “It depends upon the product and the market. The way things look now, the price increases are likely to be a bit less in Europe than in North America, where we really get hit because oil is traded in US dollars so we won’t get any benefit from the strong euro there,” Mr Wennemer told the AFX news agency.
(Akron/Tire Review) Michelin North America’s (MNA) Uniroyal brand has added 23 new sizes to its Tiger Paw Touring line, and enhanced the line’s warranty. The new sizes include some V-rated sizes, and will be available to dealers this month, MNA said.
The new warranty program boosts the standard treadwear limited warranty on T-rated sizes to 80,000 miles, which MNA said is the longest mileage warranty ever offered on a Uniroyal tyre. H-rated sizes got a boost to 70,000 miles, as well. The new sizes range from a T and H-rated P185/60/R14 through a V-rated P225/50R16.
(Akron/Tire Review) Cooper Tire & Rubber Co has made three appointments to its North American tyre-marketing group. James Keller was vice president of marketing for North America, Philip Kortokrax was appointed general manager for Cooper’s Mickey Thompson Performance Tires and Wheels unit, and Christopher Pantani was named director of UHP marketing and business development.
(Akron/Tire Review) Various reports indicate that the Roesler Group is still negotiating to buy Continental Tire North America’s (CTNA) OTR tyre plant in Bryan, Ohio.
Roesler officials and representatives from the United Steelworkers (USW) have been meeting, but no progress has been reported. Meanwhile, industry watchers in Europe remain curious about the deal, suggesting that Roesler’s relative size – the company posted sales of just $10 million last year, according to reports – may be of concern to the union, which is fighting to protect jobs. However, some observers suggest that the negotiated price for the factory actually favours Roesler.
(Akron/Tire Review) Toyo Tire & Rubber Co has reorganised its entire North American operations under a new umbrella company – Toyo Tires International – that will oversee all of its manufacturing, distribution and sales and marketing efforts in the US, Canada and Mexico.
Tyre manufacturers emphasise forward planning at Hillhead
This year’s Hillhead exhibition – the International Quarrying and Recycling show –– was sold out several months in advance of the event. As far as tyre exhibitors go the usual faces Michelin, Bridgestone and Goodyear Dunlop were there, joined by Marangoni, OTR Tyres, Rema Tip Top and Vacu Lug.
Over 16,000 visitors attended the biennial working event held at Buxton Derbyshire, a four per cent increase on 2003’s figures say organisers. However with the on going global shortage of OTR tyres both manufacturers and distributors were faced with never-ending product availability questions covering all segments of OTR tyres, giant medium and small and all sectors, mining, quarries and construction.
Demand for OTR tyres has fast outpaced world tyre industry expectations. Between 2003 and 2004, global demand for OTR tyres grew around 20 per cent, for some sizes demand was up by 30 per cent. What’s more this demand shows no signs of tapering off. According to Bridgestone global demand for rigid dump truck tyres is expected to be 50 per cent higher in 2005 than last year. Tyre manufacturers are still struggling to meet this growing demand and this will continue to be the case if, as expected, demand outstrips supply until 2007.
According to Continental Tire North America’s director of dealer sales, Jack Fenner, production levels of OTR tyres have remained flat since 1999 having only recently increased. Now, everything the tyre manufacturers are producing is being sold. According to Goodyear Tire & Rubber spokesman Dave Wilkins, every large tyre produced by the company in 2006 is already spoken for. And unlike passenger car tyres, earthmover tyres can not be produced by their hundreds each day.
The main reason for the global OTR tyre shortage is the rapidly expanding Chinese market. The country is consuming vast amounts of raw materials and commodities – such as copper, iron, gold, and coal – and is creating a massive demand for original equipment. In the last two years the price of natural rubber has more than doubled, putting all tyre manufacturers under pressure to increase the price of new tyres. These price increases are set to continue not only due to creeping raw material costs but those of shipping too.
“We fully understand the difficulties our customers are facing because we are also suffering from shortages of the raw materials we need to manufacture these specialist tyres,” said Bridgestone UK’s marketing manager, Barry Coleman. “We are all in the same boat and we want to ensure that we give advice and assistance to our customers during this trying period.”
Both tyre demand for OE and the replacement market is now above capacity supply. In an effort to address the shortage Bridgestone is spending £86 million to expand capacity at its Japanese plant by 20 per cent, but these new plans will not be completed until 2008. Michelin is also building a plant in Brazil to help meet growing demand for earthmover tyres, however this is not expected to be operational until mid-2007, and will be serving North and South American markets.
If capacities are not expected to improve in the short term, and tyres that are produced are likely to be allocated to the Asian markets to fulfil OE demand, what does this mean for the UK and in fact European markets? According to Barry Coleman the situation is going to get “very very tight” and the bottleneck of tyre orders will continue to increase. With current threats that quarries will close due to under efficiency, and with machines left standing due to a lack of tyres, the situation cannot afford to get any worse. It is also affecting the OEMs who can’t produce machines without tyres and so are having to review their product lines.
The OTR tyre situation in the UK may see a marginal improve in the next two years says Mr Coleman but not by more than five per cent. All that tyre companies can do until supply increases is to advise companies on how to make their tyres last, even if that means operating a quarry less efficiently. And so with the current shortage expected to last until 2007 the emphasis is on planning explains Goodyear’s director of Off-the-Road tyres Andy Morris, “there is a definite need for companies to maintain the tyres they already have because they are not available off the shelf. The key to which is forward planning, something which companies are getting a lot better at.” This message was one that all tyre companies attending Hillhead strived to communicate.
Deutsche Bank analysts are convinced that Continental’s US passenger car division has made losses of up to 200 million euros last year. The closure of Conti’s Mayfield facility was expected to have cost up to 120 million euros alone. Financial experts have abandoned hope for a noticeable and continuous growth. During 2005 the tyre manufacturer is expected to come up with an annual loss of about 100 million euros, says Deutsche Bank, meaning that the shutdown of the Mayfield factory didn’t have its expected positive affect.
(Akron/Tire Review) Continental Tire North America (CTNA) negotiators presented union representatives from CTNA’s Mayfield, Kentucky, plant with an enhanced severance package for employees that were laid off due to the suspension of tyre production in that plant late last year.
The Michelin Pilot Exalto PE2 and Pilot MXM4 tyres have been selected as OE fitments on the Honda Civic Si, Michelin North America has announced.
Both tyres will be size 215/45R17. The Pilot Exalto PE2 tyre carries a W speed rating, and the Pilot MXM4 has a V speed rating.
(Akron/Tire Review) It wasn’t too long ago that some in this industry were ready to declare the winter tyre dead. Popular in Europe and Canada, sales in the US had been, at best, flat for the previous couple of winters. A few suggested that advances in standard passenger and performance offerings were enough to cope with slush, snow and ice.
(Akron/Tire Review) Goodyear is now taking nominations for its annual Goodyear North America Highway Hero honour. Nominations opened during National Truck Driver Appreciation Week, 21 – 27 August.“What better way to celebrate America’s truck drivers than to nominate one for the trucking industry’s most prestigious award for heroism?” said Steve McClellan, Goodyear vice president for commercial tyre systems. “There are many who deserve to be nominated as stewards of our highways.”
Last year, nominations were made for drivers who risked their lives in an automobile accident or traffic stop. One driver, McClellan said, died trying to save others. Several others were injured. “We are thankful for these courageous truck drivers who travel our highways,” he said. “In the 22 years of the Goodyear Highway Hero program, we have heard about hundreds of truck drivers who placed themselves in harm’s way to save someone else, and we believe it is important that they be recognized and celebrated publicly.”
Nomination forms and program details can be obtained by calling the Highway Hero Hotline at 330-796-8183 or online at www.goodyear.com/truck/whatsnew/heros.html
US freight transport company, ABF, recently changed a set of Michelin front tyres after an enormous 483,000 kilometres, a new record for the French company’s tyres. The tyres were driven in North America driving conditions throughout their life and had not been retreaded. Manufactured at the Michelin plant in Spartanburg, South Carolina, the tyres were fitted as original equipment on a 2003 Sterling truck. This performance represents an improvement of more than 32 per cent over the current US average for a North American long-haul application, according to Michelin.
Alliance Tire has reported total sales of $78.5 million compared to $63.6 million in the first half of 2004, up 23.4 per cent. Net income in the second quarter of 2005 grew 278 per cent, amounting to $4.6 million, compared to $1.2 million in the same quarter of 2004. “Marketing efforts, product mix and business conditions were the main factors to fuel the sales growth and profitability,” said company CEO Isia Tchetchik.
(Akron/Tire Review) Michelin North America is increasing prices on its motorcycle and scooter tyres, and tubes and accessories. Effective Sept. 1, prices on Michelin two-wheel replacement tyres sold in Canada, Mexico and the U.S. will jump an average of 5%. Michelin said all backorders will be re-priced and shipped at the new price.
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