Hayes Lemmerz has announced the sale of its Schenk foundry, sited at Maulbronn, Germany, to Metallwerke Kloß GmbH (MWK), for an undisclosed sum. The light metal foundry produces parts for, among others, the automobile industry and employs 300 staff. MWK has four locations in Germany, plus plants in Hungary and Spain, and employs 650 people.
Superior Industries International has reported that net income for the first quarter of 2002 has exceeded analyst expectations with revenue and shipments reaching record highs. For the first quarter 2002 net income increased by 7.6 per cent or 0.65 dollars per diluted share. Shipments of aluminium wheels increased by 16 per cent bringing revenue for the first quarter to 186,532,000 dollars, a record for the company and a 12.3 per cent increase on the same quarter for 2001. The results include the write off on non-recurring start up costs of 1.653 million dollars in respect of the launch of the new aluminium suspension parts operation. The joint venture wheel manufacturing operation in Hungary also posts profitable results.
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.
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A report in a Scottish newspaper quotes Sir Tom Farmer (61) as saying that he is not going to bid for Kwik-Fit. The Glasgow Herald report follows an article in the financial newspaper Business AM, which suggested that Farmer had tabled a bid, backed by the Bank of Scotland. He denied this, saying: “I am not going to bid and that has always been the case. But it seems that the more I say, the less people believe me.” Ford are reported as having whittled down the number of bidders to six from 35 and the winner will be named in May.
Parts supplier, Delphi, hopes that the automakers inventory reduction over the past year when production has been at a low, will result in a boost in business as low inventory forces manufacturers to place orders for new stock. In the meantime restructuring continues, with the loss of 11,500 jobs and the closure of nine factories.
Amcast, the automotive parts manufacturer (aluminium wheels), has reported results for its fiscal 2002 first quarter, which ended on December 2 last year. Sales were down 5 per cent compared with last year, at $131.2 million. The net loss for the quarter was $5.5 million. Sales at Speedline, the company’s European operation, were up 9% on the previous year, benefiting from a strong vehicle market and favourable exchange rates.
Ewals Cargo Care is a Dutch Fleet Company with around 2,000 trucks. Now the just in time specialist, which supplies parts to car manufacturers’ factories, has signed a contract whereby Goodyear Truck Force becomes the exclusive partner in tyre support and tyre service. In this way new tyre sales, retreading and (breakdown) service will be sourced from a single supplier.
ContiTechFluid, the business unit of tyre producer’s subsidiary ContiTech, has recently purchased 51 percent of shares of Chinese hose producer Grand Ocean (Chang Chun). From January 2002 the 100 employees will produce parts for VW models Jetta and Bora and the Audi A6. The project in the north of China requires an investment by ContiTech of up to five million euro.
Toyo Tyre and Rubber Co has announced the establishment of a wholly owned US subsidiary. The $20million plant will begin manufacturing vibration resistant rubber auto parts by July 2002. The company’s main outlets will be Japanese motor manufacturers operating in North America.
Goodyear has disputed data cited at the congressional hearing into the Ford/Firestone dispute. The company claims to have submitted its own safety data and is questioning the committee’s interpretation of the data they have already received. According to Goodyear the Ford data of damage claims of five parts per million is based on a Ford standard and that a damage claim does not reflect a defect. Goodyear added that “the use of relevant data and comparisons by the committee will remedy any consumer confusion of fears”.
During a press conference held in Milan, Pirelli boss Tronchetti Provera did not give much away and remained vague. The company’s strategy will focus more on high technology and telecommunications in the future, but Tronchetti Provera stressed that he could not be more precise until he has made up his mind and seen all there is to see in Telecom Italiana. He said that he would focus on debt reductions as quickly as possible. Some parts of Pirelli are now for sale; a small part of the cables and the truck tyre division, for which Pirelli hopes to collect around 2 billion Euro. The passenger car and motorbike tyre division is not for sale. There are rumours that Pirelli is in talks with Michelin and Bridgestone. Of the two remaining major manufacturers, Continental may not have the money, as the group is already planning other take-overs, and Goodyear already has sufficient production capacity.
Last year’s miserable winter tyre business has had a marked effect on many market players. Only a small number of dealers in very few regions of Germany could report a normal winter tyre business. In most parts of the country the snow came too late. If it does not snow until the beginning of November it becomes increasingly harder day by day to convince the end users to fit their cars with winter tyres. November is absolutely the most important month for retailer‘s winter tyre business. In late summer and early autumn of 2000 the tyre manufacturers were very happy about their sales to the dealers, which reached record levels. But of course the managers of the tyre industry are not so naive as to regard the lack of sales to the end users later on in the season as a problem only for the dealerships. This problem comes back to the manufacturers in two ways. First of all dealers experienced a lack of financial liquidity and there were problems in paying invoices. Secondly, having tyres in stock affects the willingness to order for next year – in this case 2001 – at the same level as before. Because merely listing the troubles would be pointless and unproductive, we tried another approach: we spoke to a lot of market players in order to form an overview of opinion and compared this with some hard figures.
American automotive supplier Delphi has become the latest member of the TecDoc automotive parts information platform. With a turnover of 29 billion US-Dollars in 2000, Delphi Automotive Systems is the biggest automotive supplier in the world. Altogether 114 companies worldwide, representing 130 brands, now support the TecDoc platform, covering 100 percent of the European spare parts market.
Compared to last year, Continental Group’s turnover for the first nine months of 2001 has increased from 7,438 billion Euro to 8,240 billion Euro (a rise of about 10.8%). The Group’s operational result (EBIT) of 238 million Euro (385 million Euro in 2000) has especially been affected by the North American tyre business and a non-recurrent expenditure of 58 million Euro due to the reconstruction process, begun in the second quarter and which has resulted in the closure of the truck tyre production site in Herstal (Belgium) and the remoulding site in Bad Nauheim. The Group’s result before tax has fallen by 160 million Euro down to 96 million Euro. After tax of 44 million Euro, the result is 104 million Euro more than last year’s amount, and the earnings per share are 0.35 Euro (1.16 Euro in 2000). Presenting the quarterly results at a press conference, Manfred Wennemer, who was appointed Managing Director on 11th September 2001, explained the Group’s directional change, concentrating on profits, results and cash flow and on cutting down financial debts, which also involves focusing on profitable transactions and devolving profit-and-loss responsibility on to the Business Units. Additionally, Wennemer announced some bigger restructuring measures: “All parts of the company are under scrutiny, and there are no holy cows”, he emphasised, adding the comment that factory closures and redundancies could be a possibility.
On 5th April the consultant company had invited more than 150 experts from the car parts and accessories sectors for its third conference concerning the car component aftermarket. As tyres are counted as part this segment as well, trends from this part of the business were presented and discussed as well. In times where sales of new cars begin to drop, the importance of the aftermarket business begins to grow again. But on the other hand the competition in this field is fiercer than ever -due also to the internet and e-commerce. This was the reason why the event was subtitled “The good times are over – means for success in hard times”. And the topics of the internet and e-commerce were at least mentioned by almost every speaker, sometimes being even the main topic. These new media enable the industry to provide products directly to the end consumer, leaving behind the old traditions of trade via wholesaler and retailers.
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