Across the Atlantic they are called tires, while over here we use a “Y” and say tyres. This tag provides the latest tyre business news emanating from the United States of America (USA), whichever way you spell it.
In the US, the RMA is preparing for its fifth annual consumer education programme promoting tyre care. The National Tire Safety Week runs from 24 to 30 April and will respond to research which found that 85 per cent of motorists fail to check tyre pressures properly.
Yokohama Tire Corp. is recalling 69 Yokohama brand medium truck tyres because of shoulder area compound problems, Tire Review has reported. The company said the defective tyres contain a “non-specified compound in the shoulder area of the tyre” and “during extended running, the shoulder area of the tyre could lift, resulting in degraded ride and handling” and potentially a tread separation.
Continental AG’s most recent financial results show that the company has broken all previous records, including the one billion euro EBIT barrier. Speaking to Tyres & Accessories, Continental chairman, Manfred Wennemer, explained that the company achieved the one billion euro mark, despite the costs incurred in the partial closure of the company’s Mayfield plant.
With regard to US business, Mr Wennemer said that while the company is still in deep water, the situation is considerably better than in recent years. The Continental chairman went on to speak of his belief that this area of business will break even by the end of the year, as has been suggested before.
As far as 2005 is concerned, Mr Wennemer is confident that Continental can top this year’s impressive results. Chief financial officer, Dr Alan Hippe, demonstrated this feeling of optimism when he pointed out that company debts had dropped to less than one billion euros. The company’s share value also has the potential to increase by 40 per cent in the next two years, he added. Continental shares are currently trading at 52.50 euros.
US tyre shipments increased by 2.5 per cent in 2004, compared with 2004, according to preliminary estimates released by the RMA. The group cited strong increases in the nation’s GDP and Industrial Product Index (IPI) as being behind this growth. The positive general figure contrasts with a 2.8 per cent decline in passenger car OE sales, which fell to 53 million units. Light truck OE also decreased by 600,000 units, or 7.5 per cent, to approximately 7.4 million units in 2004.
The Malcolm Group, one of Scotland’s largest road transport companies, has signed a three year contract with Michelin for the supply of truck tyres for its fleet. The deal covers 335 tractor units and 1,000 trailers, all to be fitted with Michelin E type tyres.
Having established its new European offices on 1 January, Toyo Tire invited guests to an official opening that fused European and Asiatic cultures. Dignitaries present included Toyo president and chief executive, Yoshio Kataoka and the Herbert Napp, the Mayor of Neuss, the German city where the new offices are based.
Continental AG reportedly plans to sell its Bryan, Ohio, OTR tyre production plant, according to a German Reuters report. Other sources indicate that the company is in talks with an unknown buyer. Continental declined to make any further comment.
The Bryan plant is said to have nearly 300 employees and the capacity to produce up to 300 off-the-road tyres each day. Last October, Continental sold its worldwide agricultural division to Ceska Gumarenska Spolecnost (CGS). As part of the agreement, the Czech company continues to produce and trade Continental, Semperit, Barum and Euzkadi tyres.
Goodyear Aviation is to supply tyres and tyre maintenance to Ryanair, under a new five-year contract.
The contract with the low budget airline began on 1 January and includes the delivery of new tyres and the repair and overhaul of aviation tyres that supply the current fleet of 66 Boeing 737-800s. This will extend to a further 96 aircraft, with up to 123 options to be delivered up until 2009.
The Society of Motor Manufacturers and Traders has launched its annual publication “Motor Industry Of Great Britain – 2004 World Automotive Statistics”.
At nearly 500 pages, the report contains its usual comprehensive, in-depth examination of various aspects of the market, including detailed analysis of car and other vehicle sales. And not just vehicles, as the report contains details of numerous components, including tyres.
The executive boards of the United Steelworkers of America (USWA) and the Paper, Allied Industrial, Chemical and Energy Workers International Union (PACE) have unanimously voted to merge. According to the USWA the merger of the two organisations will create the largest industrial union in North America, with over 1.25 million active and retired members. The union also reports that it will have over 8,000 bargaining units in the US, Canada and the Caribbean.
The new union will be called the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union. PACE and USWA members will vote on the proposed merger at conventions to be held in April.
German Formula 1 star Michael Schumacher has made a cash donation of $10 million US dollars to the tsunami victims of southern Asia. The allocation of the money in the region will be undertaken by German authorities.
Magowan Tyres is a family-owned and run retail and wholesale tyre business, based in Belfast. The founder, Darryl Magowan, has been in the tyre industry for more than three decades and is still in charge of the overall direction of the company.
His son, also called Darryl, is managing director of the company and his speciality is purchasing. With the Northern Ireland market being, in his phrase, “exceptionally price conscious”, it is a distinct advantage if you can buy cleverly. Magowan is very active on the parallel market, importing around eight containers a month from Europe and the USA.
For almost 20 years, Magowan Tyres was purely a retail business, moving into wholesaling only three years ago. I put it to Darryl Magowan (Jr.) that this was an odd time to enter the wholesale sector, with rising transportation and associated costs. His response was that the company had examined the situation carefully and weighed up the pros and cons. The main reason was that there was a growing demand in the Irish market for ultra high performance tyres and a lack of wholesale supply.
The main market for Magowan Tyres is Northern Ireland, especially Belfast, where the company offers deliveries up to five or six times a day, if required. The service in the Irish Republic is less frequent, but a next-day delivery is standard. Because of the low density of population, which, apart from the major towns and cities, is very spread out, running a wholesale operation efficiently and profitably means keeping a close eye on day to day running.
Sun Capital Partners has announced that one of its affiliates has purchased Honeywell International’s Performance Fibres business unit. The terms of the transaction were not disclosed. The new business, Performance Fibers, is a global leader in high-performance industrial fibres and related materials, with operations in the US, France, Korea and China.
“We are excited about the future of this business and the many growth opportunities we see in the global market for industrial fibres and related technologies,” said Greg Rogowski, Performance Fibers’ president and chief executive officer. “We plan to continue our leadership in this industry and to grow by providing our customers with the technology innovation they require and the quality and reliability they expect.” M Steven Liff, Principal at Sun Capital Partners, Inc, a leading private investment firm specialising in leveraged buyouts added, “Performance Fibers is a global leader, and by combining our business expertise at Sun Capital with the strengths of Greg Rogowski and his management team, we expect to enhance Performance Fibers’ position in its market niche. Through our investment, the company will be able to take advantage of numerous opportunities that will strengthen its core competencies.”
The US independent tyre testing company, Smithers Scientific Services, has been awarded a $400,000 (£210,000) contract from the California Energy Commission to conduct a study of tyre characteristics in relation to rolling resistance.
The study will involve tyre rolling resistance, traction and treadwear testing, and according to the company will potentially serve as the basis for a fuel efficiency reporting system and minimum- efficiency standards.
Testing, research and consulting firm Smithers Scientific Services Inc. – with headquarters in Akron/Ohio (USA) – has confirmed that it has been awarded a $400,000 contract from the California Energy Commission to conduct a study of tire characteristics as they relate to rolling resistance. The study, funded by the Energy Commission, will involve tire rolling resistance, traction and treadwear testing, and will potentially serve as the basis for a fuel efficiency reporting system and minimum- efficiency standards. “Lower tire rolling resistance can directly lead to better vehicle fuel economy,” said David L. Schwarz, vice president of technical services and sales for Smithers. “However, as with any tire characteristic, there are potential tradeoffs. Thus, the Energy Commission study is not limited to rolling resistance testing. Additional work will be conducted to evaluate other performance attributes.” He pointed out that currently there is “really no information, in terms of tire rolling resistance or fuel economy, available to a consumer purchasing replacement tires.” The study will take about 18 months to complete. The rolling resistance testing will be conducted at Smithers’ indoor tire testing laboratories in Ravenna, Ohio.
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