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Striking workers at tyre MRF’s Arakonam and Puducherry plants in India are considering surrendering their important ration and voter identify cards in protest against a wage agreement signed with a rival labour union. The worker’s sit-in strike began on May 9 and led to a lockout being declared at the Arakonam site on May 17. Production at both locations has come to a complete halt as a result of the industrial action.
BA Bush & Son and its wholesale operation B.A.B. Distribution (a member of the wholesale group Grouptyre) has invested in a new retail facility. At a time when many businesses are contracting, the family concern, which this year marks 60 years in business, is celebrating by opening its 14th tyre retail depot in Bourne, Lincolnshire, at the end of April. The expansion is set to continue in July/August when the company is scheduled to open a new, purpose-built tyre retail centre in Spalding. According to company representatives, branch number 15 is “absolutely state of the art” and even has its own bridge.
“We always aim to reinvest profits in the company and are taking advantage of economic conditions to implement an aggressive growth strategy designed to increase our market share throughout Lincolnshire, Humberside and East Yorkshire by providing unrivalled levels of customer service,” said director Tom Bush, adding: “For many years we have met the needs of customers in Bourne from our Boston and Sleaford branches, so it was logical to develop a stand alone facility, albeit linked to and fully integrated within our retail operation, which would enable us to provide a more comprehensive and better quality of service to customers in this area.”
Testing new products, verifying their conformity to international approval standards and the development of new solutions, notes Marangoni, are essential elements in the research performed by leading tyre manufacturers. To help it carry out these activities in the most scientific and detailed manner possible, the Marangoni Research & Development Centre in Rovereto, Italy has implemented a new tyre tester it calls “Ruota Strada”. This new unit is set up for the indoor testing of all types of tyre, including passenger car, industrial, earthmover and high performance products.
It appears the tables have turned for Continental and Schaeffler. According to Reuters, sources with “knowledge of the matter” report Schaeffler is considering a plan to sell a large piece of its business to Conti in order to address its sizable debt. The ball bearing manufacturer is struggling with debts of close to 11 billion euros and has announced plans to reduce annual labour costs by 250 million euros – a sum equivalent to the laying off of 4,500 employees.
TRA has elected Barry Stocker as its new president, at its Annual General Meeting (AGM) held on 20 May. During the AGM, the association also elected a new vice president/treasurer to succeed the existing appointees whose terms of office fall vacant under the association’s rules. Keith Rodgers, managing director of Saltire Recovery Limited was elected to this position. Both the president and vice president/treasurer are set to serve two-year terms of office.
Automechanika Shanghai, reputedly Asia’s largest automotive trade fair and the organiser’s second largest Automechanika fair, will take place from 9 – 11 December 2009 at Shanghai New International Expo Centre. This fifth edition of the fair is organised by Messe Frankfurt (Shanghai) Co Ltd and the China National Automotive Industry International Corporation (CNAICO). In line with the product profile of the global Automechanika brand, the event will encompass a broad spectrum of products and services for the automotive original equipment and aftermarket. Products on offer cover the sectors Parts & Systems, Accessories & Tuning, Repair & Maintenance, IT & Management to Service Station & Car Wash.
In 2008 Automechanika Shanghai had a record number of 1,982 exhibitors from 23 countries and regions showcasing their products in eight halls covering 92,000 square metres. The show attracted more than 30,800 visitors from 104 countries and regions and half of the buyers had full purchasing authority. The number of exhibitors and visitors were up to 59 per cent and 41 per cent respectively.
Emerging tyre markets led by China are bucking the downward sales trends encountered in the European and US markets. According to Michelin’s latest market figures, Chinese passenger car replacement tyre sales have grown significantly (up a huge 31 per cent in the circumstances). At the same time Chinese truck tyre replacement market is said to be flat year-on-year, compared with massive falls in the West.
South American tyre sales, on the other hand have not faired so well. In Brazil sales of original equipment truck tyres are 30 per cent lower than last year, according to the data, which also points out that this reflects on the heavy cuts that have been made to new truck tyre production. As far as the Brazilian replacement tyre market is concerned, truck tyre sales are said to have declined approximately 20 per cent year-on-year.
Assuming stable share, Michelin’s second quarter tyre sales volume is expected to be inline with analysts’ earlier estimates of a drop of 18 per cent. However, Michelin’s monthly tyre market data, which has become something of barometer in the current unstable market conditions, shows that the leading French tyre manufacture is performing better than analysts had expected. In an investor’s note entitled ‘Punctured but still rolling” Morgan Stanley described the company’s recent performance as “slightly better than our expectations, after adjusting for an average two fewer selling days across Europe.” Year-on-year growth rates remain negative, but the pace of the decline is considered to be “more on track to meet or exceed [forecasted] tyre sales to dealers.”
As a result of the fact that tyre prices are positively correlated with both volume and input costs, Morgan Stanley suggested manufacturers remain under pressure to cut prices: “Investors must prepare for a reasonable level of price ‘give back’ to struggling tyre dealers, distributors and consumers in this environment…We believe depressed volumes and the tailwinds from lower raw material that will materialize in the second half will continue to put at risk the pricing discipline – and the profitability – of the industry.”
European truck tyre OE sales reportedly fell an enormous 74 per cent in April, while replacement tyre volumes were down 44 per cent. The figures, which are sourced from leading tyre manufacturer Michelin, show that most global markets are affected (China aside). As far as truck tyre sales are concerned, the good news is that everyone’s best guess is that this segment cannot remain under this “particular pressure” forever and that there is still a good chance of improvement, or at least a slowing in the downward trend in time for the second half of 2009.
While Continental and the German IG BCE union arrived at a compromise regarding the company’s Hanover-Stöcken truck tyre factory, Germany’s Bild-Zeitung reports the decision to suspend production has far from won the universal admiration of employees. The paper records “indifference, anger and disappointment” amongst the affected employees – close to 430 of whom will be let go by next year at the latest.
“We have been taken for a ride,” one employee was quoted as saying. “As ‘little people’ we can not at all appreciate what this compromise brings.” Another said: “Unions and works councils are so weak, we feel betrayed. I have worked my fingers to the bone for 20 years – all for nothing.”
Michelin has released the fourth edition of the Michelin Performance and Responsibility report, its document outlining the company’s commitment to balanced development. This year the report is organised around the five stages in a tyre’s life: design, raw material purchases, manufacture, sale and use, and end-of-life recovery. The information contained within the document, says Michelin, comes from lifecycle analyses conducted to measure the tyre’s environmental impact, and its objective is to demonstrate that this commitment to responsible development is fully integrated into all Michelin projects and initiatives.
Michelin has once again signalled its interest in rival Continental’s tyre division, reports Reuters Germany. Michelin Group managing partner Michel Rollier is quoted as commenting at the company’s May 15 Annual Shareholders Meeting “we won’t remain on the sidelines during discussions about Continental.” He added that Michelin was not currently engaged in any talks with the German company.
Conti has declined to comment on the matter, and Reuters quotes a person familiar with the situation as saying “nobody is working towards a sale of the tyre business.”
The air around the Place de la Bourse in central Paris, previously home to the French stock market, was heavy with the stench of burning tyres on May 18. Hundreds of Continental employees, together with representatives from the CGT union, congregated at the historic trading site and vented their emotions ahead of planned talks on the closure of Conti’s Clairoix factory.
A traditional “kagami-biraki” sake barrel breaking ceremony attended by more than a hundred guests and a guided factory tour has marked the official opening of Bridgestone’s new 200 million truck and bus radial facility in Stargard, northwest Poland. Senior company management including Bridgestone Corporation CEO Shoshi Arakawa and Bridgestone Europe CEO Toru Tsuda presided over the May 18 events and played host to numerous local, regional and national officials such as Mrs Grazyna Henclewska, Undersecretary of State in the Ministry of Economy, Mr. Tanabe, Japan’s Ambassador to Poland and Mr. Husejko, Marshal of West Pomerania.
The conflict regarding plans to end commercial vehicle tyre production at Continental’s Hanover-Stöcken plant has been resolved, the company reports. Continental management, the IG BCE trade union and employee representatives have reached an agreement on a solution that, in Conti’s words, “makes use of all instruments the labour market provides and opens up prospects for 2010.” The agreement will see the suspension of commercial vehicle tyre production at Stöcken as of the end of 2009, a move supplemented by a number of other measures.
“The package is the result of several rounds of intensive talks that came close to being bro-ken off at a number of points. In the end, however, the two sides moved closer and, against the backdrop of a dogged and complex economic situation, faced up to their responsibility,” said Werner Bischoff of the IG BCE Executive Committee following talks on May 19.
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