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Toyo Tire & Rubber has published its figures for the first half fiscal 2004 (six months ended 30.9.2003), which show a decrease in turnover to 900 million Euro. For the year as a whole, Toyo anticipates a turnover of 1.93 billion Euro, with tyres accounting for 1.233 billion, or 64 per cent. The full year operating income is predicted to be half the previous year’s level, at 50 million Euro, of which 75 per cent will come from tyres.
Sumitomo Rubber Industries Ltd. intends to establish a sales network of more than 400 stores in China within two years in and plans to take a 10 per cent share of the Chinese tyre market by 2010. The company, whose first tire factory in China will go onstream in April, aims to develop a customer base in China, where it currently has almost no sales. Sumitomo Rubber teamed up with Tyre Pacific (HK) Ltd. of Hong Kong to create a joint venture to oversee sales in China. The joint venture, SRI-TP JV Co., is capitalized at 6 million US dollars.
The Goodyear Tire & Rubber Company announces that Freightliner LLC, North America’s largest manufacturer of heavy-duty trucks, has named Goodyear as its standard tyre supplier. Officials of Goodyear and Freightliner recently signed the agreement, and Freightliner has begun communicating this decision to its network of truck dealers. “Being awarded new business is a testament to what Goodyear offers, in terms of products, service and a network of commercial outlets. And having a customer like Freightliner choose Goodyear to be its standard tyre supplier really makes us proud,” said Steve McClellan, Goodyear’s vice president of commercial tyre systems. Goodyear is supplying a variety of truck tyres for Freightliner LLC’s various commercial vehicle needs. This includes supply to the company’s commercial vehicle brands Freightliner, Sterling, Western Star, American LaFrance and Thomas Built Buses.
Ernest H. Zielasko has died after a short illness. He was 84. Zielasko was for many years editor and publisher of Modern Tire Dealer and in 1971 was co-founder of Rubber & Plastics News. He sold the publication in 1976 to Crain Communications to finance the best possible medical treatment for his son Jeff, who died at the age of 19. In the book ‘Jeff’s Denial’ he described his memories and son’s fight against leukaemia. Until his retirement in 1986 Ernest Zielasko worked as Vice President for Crain’s Rubber Industry Publications. His son David is editor of Tire Business.
Cooper Tire & Rubber announced that John F. Fiedler (65) has stepped down from his post on the board. Fiedler had been a director of the Company since April 2002. Upon the announcement of his resignation, Fiedler commented, “It has been a privilege to serve on the Cooper board. This is truly a quality organization with solid leadership. I am proud of my affiliation with Cooper and the time I invested here.”
Standard & Poor’s has said it may cut its rating on Goodyear Tire & Rubber Co. deeper into junk territory, following the company’s announcement on Wednesday of possible accounting problems in Europe. “The announcement raises potential accounting concerns in a Goodyear operation that has been seen as solidly profitable,” S&P credit analyst Martin King said in a release. “Ratings could be lowered if the investigation results in material accounting adjustments, leading to substantial financial reporting delays, or has a negative impact on the company’s prospective liquidity and access to capital,” he said. S&P said it may cut Akron, Ohio-based Goodyear’s corporate credit rating of “BB-minus”, its third-highest junk rating.
Yokohama Rubber Co aims to open a new plant in Thailand, planning to roll out tyres in April 2005. It plans to set up a company there in January to make radial tyres for trucks and buses. The company plans to spend 5.5 billion yen to build a plant in Rayong that will have an annual production capacity of 300,000 tyres in its initial phase. In the second phase annual production is scheduled to double to 600,000. Its main product will be 22.5-inch tyres, and they will be exported to markets around the world. Yokohama Rubber plans to acquire a site of up to 225,000 square metres in Rayong’s Amata City industrial park for the new plant. The plant will employ a “small-batch” production system, which is designed to maximises cost efficiency even on a relatively small production scale, Yokohama Rubber said. The company adds that it may build more tyre plants in Thailand in the future.
The stocks prices of tyre companies have gone skyrocketed in the last few months following the auto boom. Share prices of tyre manufacturer Apollo Tyres increased from Rs 193.00 to Rs 259.85, Ceat appreciated from Rs 44.85 to Rs 63.85 and JK Industries moved up from Rs 38.90 to Rs 86.20. Vikrant Tyre gained from Rs 18.05 to Rs 75.30, Falcon Tyres increased from Rs 23.80 to Rs 26.75 and Goodyear Industries appreciated from Rs 33.70 to Rs 50.30. Govind Rubber gained from Rs 8.49 to Rs 16.32, MRF jumped from Rs 1418.45 to Rs 2097.35, while Premier Tyre increased from Rs 9.15 to Rs 12.38 and Krypton Industries appreciated from Rs 11.21 to Rs 18.00. Making local tyres available at fair prices would emerge as the key factor to Indian rubber goods manufactures taking advantage of the auto boom.
Goodyear Tire & Rubber Co. has revealed that its accounting troubles are ongoing. Goodyear said after the close of regular stock trading that an internal investigation has identified possible improper accounting issues in Europe. The company said an amended filing it expected to submit to the Securities and Exchange Commission detailing its finances will be delayed until next year so that it can complete a review of its accounting. The United Steelworkers of America (USWA) announced today it will closely monitor the circumstances surrounding Goodyear Tire and Rubber Company’s announcement that it will be necessary to delay the filing of its 2002 Form 10-K/A with the U.S. Securities and Exchange Commission. “We are hopeful that the problems in Europe are not significant,” stated USWA International vice president Andrew V. Palm. “We expect that the company will quickly resolve this situation and move on to complete their financing commitments in the near future.”
India’s outsourcing boom is likely to have little impact on the tyre industry that has huge potential. The tyre industry needs to source rubber at global prices. Availability of rubber at par with international majors like Continental, Pirelli or Yokohama would lead to development of India as a base for manufacturing, according to Anil Sampat, an industry analyst and former rubber industry insider. India’s largest player MRF is still one fifth in size of global companies. The only way the Indian tyre industry can grow and reach global scale is to attract investments from international tyre majors as the industry is capital intensive. The small size of Indian companies is a source of worry, says Sampat. With tyre industry expected to grow only by 2 per cent, “real growth can come only when India offers world class manufacturing facilities for global players,” he points out.
The near 90 years old tyre manufacturer Cooper, has so far always been noticeable with two digit operational profits, has held its ground even after the rather difficult economic conditions in the United Stated after “September 11”. Whilst Cooper has been more or less in the doldrums during the first six months of the current year, the company again gathered way under the guidance of CEO Thomas A. Dattilo. Cooper could convince the market of the fact that this tyre and rubber company will find the way back to its old earning power. In the fourth quarter of 2002 there have been preferred sales because of announced price increases for 2003, so that the manufacturer was inevitably lagging behind its sales figures during the first months of this year. Since September however Cooper progresses again relatively steeply with light truck tyres. In particular, the last quarter showed strong upward tendencies. While the market grew by around four per cent, Cooper in turn created a growth of nine per cent by special arrangements with customers, so that up to the end of the year many arrears can be caught up. This at least is what Tom Dattilo explained to T&A in an interview at the SEMA show in Las Vegas.
The Yokohama Rubber Co., Ltd., announced its consolidated results for the first half of fiscal 2004. The high value of the yen and sluggishness in the market for replacement tyres in Japan led to an overall decline in Yokohama’s tyre sales, but sales of hydraulic hoses and golf products increased. Sales of the tyre group amounted to 960.3 million Euro, a 0.8 per cent slide, and operating income decreased 27.5 per cent, to 15.1 million Euro. Demand in the Japanese market fell considerably, as both unit- and value-based sales of replacement tyres contracted. Sales of tyres on an original equipment basis were basically unchanged. Reflecting the current operating environment and these results, in fiscal 2004 Yokohama forecasts consolidated net sales of 3.02 billion Euro, a 0.1 per cent decrease, and net income of 75.6 million Euro, a 1.4 per cent decrease.
For the second time in two weeks, Michelin has announced that a major racing team will switch to its tyres. The announcement that three-time GTS class-winning Corvette Racing will switch from Goodyear to Michelin racing slicks in the American Le Mans Series follows the confirmation that Formula One team BAR-Honda will run on Michelin rubber in 2004. The No. 3 and No. 4 Chevrolet Corvette C5-Rs will begin Michelin tire tests this week in preparation for the nine-race ALMS schedule and the 24 Hours of Le Mans. Michelin-shod teams took the top ten positions and won all four classes at the world-famous endurance race in 2003, which also marked the company’s sixth consecutive overall win.
The Indian tyre industry is gearing up for 3 per cent to 5 per cent price hike starting in December.
The Goodyear Tire & Rubber Company has appointed Robert A. Novotny to the position of vice president, Global Engineering & Manufacturing Technology. In this role, Novotny will report to Joseph M. Gingo, executive vice president, Quality Systems & chief technical officer, and Chris W. Clark, senior vice president, Global Sourcing. Novotny, 48, replaces Ernest J. Rodia, who is retiring after 37 years with Goodyear. Rodia, 60, had served as the group’s vice president since February
2001.
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