North America
The Cooper Tire & Rubber company’s earnings per share for the first quarter of 2002 will be around 35 to 37 cents; significantly more than the previous estimate of 30 cents. This is due to an increase in market share and increased light vehicle production in North America. Full results will be published on April 18.
Although Continental AG increased turnover in 2001 to 11.2 bn Euro (+11.1%), high losses of 257.6 million Euro have been announced. The reasons for the bad figures are restructuring costs (especially the closing of tyre factories), plus the business units Continental Tire North America (CTNA) and the Commercial Tyre Business are again in the red. The shareholders will not receive a dividend.
Last year Continental did not perform as well as its managers expected: unprofitable commercial tyre division, failed ContiTech sale, heavy losses in the North American tyre business unit. Then, in September there were the changes at top management level: Dr. Stephan Kessel quit, Manfred Wennemer replaced him. He announced – immediately after assuming the responsibility – some wider restructuring measures. “All parts of the company are under scrutiny, and there are no holy cows”, he emphasised. Following this statement we heard the announcement of closures like the factories in Traiskirchen/Austria or in Herstal/Belgium. However, there has been a commitment to the commercial tyre business and to activities in North America, although the target is clear: a return back to profitability. New high mileage truck tyres like the HSR 1 (also featured in NEUE REIFENZEITUNG) are a first step in the commercial tyre business. With an increasing marketing budget and new tyres for the North American market, Dr. Ulrich Wellen, new President and CEO at Continental Tire North America since the beginning of this year, holds out hope for a turnaround in the USA too.
This is a short extract. Tyrepress and Tyres & Accessories subscribers can log in below to read the full article.
If you are not yet a Tyrepress or Tyres & Accessories subscriber, you can change that here.
Becoming a member has benefits such as:
The enthusiasm for aluminium wheels is diminishing. The golden years – mainly in the Eighties – of light alloy wheel are over – for the OE as well as in the aftermarket. Yet European original equipment demand for aluminium wheels is still growing. Year on year, by around about one million pieces. However, we have to accept that new materials and methods of production can make steel wheels as light as aluminium wheels. If the suppliers can make progress in styling and the car makers are forced to make smaller and middle class vehicles cheaper there might be a turnaround in the current trend. Some companies are in trouble. Even the world’s biggest wheel manufacturer Hayes Lemmerz in America had to be rescued under Chapter 11. On the other hand, there are success stories from companies like Superior in North America or Borbet in Europe. Companies like BBS or OZ are still doing good business because they are not interested in volume but rather in selling exclusive (and expensive) wheels. The middle-price sector has been absorbed by the low-priced segment of high volume companies. The flame of the aluminium wheel business flickers weaker and weaker.
Continental has released provisional figures for 2001. Sales increased by 11.1 per cent to 11.2 billion Euro (2000: 10.1 bn). The Automotive Services Division increased turnover by 31.8 per cent and the tyre division’s sales rose by 2.2 per cent. Good sales of passenger car tyres in Europe compensated for falling sales of commercial vehicle tyres and in the turnover of Continental Tire North America. A one-off restructuring cost of 468 million Euro adversely affected the 2001 figures and the end result is a deficit for the year of 258 million Euro, compared with a surplus for 2000 of 205 million Euro.
Nokian Tyres has launched its new WR high performance winter tyre. It has been developed with the particular needs of drivers in Central Europe and North America in mind and replaces the Nokian NRW winter tyre. One particular size in the comprehensive range, 235/50 R18W, is intended for top speed driving, up to 270 km/hour, and is – according to the Finish tyre manufacturer – the world’s fastest winter tyre. The products will be available worldwide for consumers in the Autumn of this year. This reflects the design expertise of the Nordic tyre factory, Nokian says.
BMW in North America is in the process of recalling around 1,300 of its 2002 5-series cars with standard suspension and fitted with ContiTouringContact CH95 EcoPlus tyres, 225/65R16 95H, with DOT Codes 4001, 4101, and 4201. The outer sidewall surface of the tyres could have been damaged by a sharp object and the cars are being recalled as a precautionary measure. Dealers will replace the damaged tyres free of charge.
Beru together with its partner Lear, announced that the company has won a contract to supply one of the big 3 in North America with the TPMS tyre monitoring system. Beru expects sales of 20 million Euro from that contract alone in 2004 and 60 million annually in the following years.
Goodyear has published its monthly investor update, giving brief details of the company’s performance in various world markets. In North America in October, industry shipments of OE and replacement tyres fell. Goodyear made production cutbacks, which continued during November. European industry-wide replacement tyre shipments fell for both passenger and commercial and Goodyear’s sales followed this trend. For OE, Goodyear shipments of consumer tyres were up on last year while those of commercial tyres fell. In Eastern Europe, Goodyear’s shipments of OE and replacement tyres fell from October 2000 levels. Replacement shipments in Latin America fell and OE shipments rose, while in Asia, OE and replacement shipments both rose.
Eight Goodyear factories have earned the DaimlerChrysler Gold Award, given in recognition of outstanding service. Seven of the plants are in North America and one is in Europe, at Philippsburg, in Germany. Goodyear was rated as “excellent” in the areas of quality, delivery, competitive pricing and technology and “acceptable” in customer support.
In an attempt to reduce vehicle stocks, Ford and General Motors have announced the temporary closure of seven factories in North America. GM is to close five plants (sited in Oklahoma City, Ontario, Michigan and Ohio) for a week, affecting over 14,000 workers. The two plants which Ford is to close temporarily manufacture vans and are situated in Ohio, employing 4,150 hourly workers.
Nokian has released interim financial figures for the first nine months of this year. These show an increase in net sales of 7.4 per cent to 277.7 m Euro and an operating profit of 25.3 m Euro (11.9 m Euro for the same period last year). Net profit reached 9.1 m Euro (2.7 m in 2000). Nokian’s target for the year is to achieve a sales growth of around 10 per cent and improve on last year’s profitability.
At the annual general meeting of Continental AG, held at the Preussag-Arena of the Hanover EXPO Centre, both management board and shareholders were united in not being very happy with the development of the company’s share price. However, they did not agree over the intention to sell ContiTech. Whereas, for the group’s representatives this is another logical step towards becoming a systems supplier for the automobile industry, the question was raised, whether instead it might be more useful to separate from the weak Continental Tire North America (the former General Tire). Another factor is that last year ContiTech achieved quite a profitable result. This kind of argument took the wind out of the sails of both Continental’s managing director, Dr. Stefan Kessel and board member Manfred Wennemer, who is responsible for this business unit within the group. They were united in their desire to follow the path towards “Global Chassis Control”. And in order to emerge from the decline, a cluster of measures has already been introduced. “We expect these measures to bear fruits soon, and that sales increases will be reflected in the results, too. However, 2001 will be a very difficult year for tyres in the USA” – such was the managing director’s outlook. “Therefore, it will be even more important to become a systems supplier. As there are only a few suppliers for the automobile industry, hostile take-overs will be rather unlikely.” Kessel was trying to allay the shareholder’s fears and once more justify Continental’s strategic change. Of course, it would be very helpful to spur on the share price, as explicitly declared by the group’s top management at the AGM – however, it needs more than words.
Goodyear has released its 2nd quarter financial results. At $3.58 billion, Q2 turnover was slightly up from Q1 ($3.4 bn) and around the same as for Q2 last year. Profits after tax were $7.8 million, nearly 90 per cent down on the figure for Q2 2000 of $77.1 m. However, Q2’s profits were a vast improvement on the $46.7 m loss recorded in Q1 2001, due largely to increased business from the replacement of Firestone tyres on Ford Explorers. For the first half of 2001, Goodyear posted a net loss of $38.9 m, compared to a profit of $125.3 m for H1 2000. Regarding the rationalisation programme, 5,800 jobs have been lost from the proposed total of 7,800.
Michelin North America has selected Modern Media, a e-retail software specialist to develop its B2C initiative in North America. Michelin North America Inc’s Debra Track said, “Modern Media will help us create a platform that will allow us to go after a new generation of consumers that don’t necessarily use traditional media in their shopping habits”. The value of the deal has not been disclosed.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
