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 USA, Michelin is to introduce a new Uniroyal light truck/SUV tyre this September, which carries a 60,000 mile treadwear warranty. Called the Laredo Cross Country, the new tyre will be available in 14 sizes to fit both US-made and imported vehicles.
The National Highway Traffic Safety Administration has revealed details of the new tests that tyres for passenger cars and light trucks will have to undergo by 2007. The program includes speed and endurance tests, plus a test with the tyre under-inflated. The NHTSA reckons that most tyres will reach the new standards, with something between five and eleven per cent of tyres having to be re-designed. These are the first new standards since 1967 and were prompted by the Firestone recall. The NHTSA estimates that the cost to manufacturers will be $31.6 million.
Goodyear’s Eagle F1 GS D3 performance radial has performed well in a survey of customers conducted by US mail order company Tire Rack. The tyre scored 9.4 out of 10 in the “repurchase” category, compared to the next highest score of 8.6. Tire Rack also tested the tyres against Michelin and Bridgestone in both wet and dry conditions and found that, although dry performance was comparable, the Goodyear tyre achieved the best lap times in the wet.
GM is to fund its pension fund deficit by raising $10 billion in the bond market by selling debt, replacing short term pensions obligations with long-term debt payments. Some analysts are sceptical about the move, though GM shares rose 2.6 per cent when the news was announced. Last year, GM’s US pension fund was underfunded to the tune of $19.3 billion.
Pirelli has picked up a prestigious advertising award in the USA for its “Fist” campaign, where four tyres are shown merging into a fist. The accolade is a gold “ADDY” award for international consumer press advertising and was given at the recent American Advertising Federation (AAF) awards presentation. With 60,000 entries, the competition claims to be the world’s largest and this year was opened up to international entries for the first time.
There are reports that Michelin North America is spending $56 million on expanding its factory in Oklahoma and has earmarked an additional $144 million, to be spent over the next two years.
Next week Fiat will announce details of its restructuring plans, which are expected to see worldwide job cuts of 10,000, many of which are likely to be in the US operations of Case New Holland. 1,000 jobs will go in Italy, through early retirement. Fiat chief executive Giuseppe Morchio will announce detailed plans on Thursday 26th and it is said that greater emphasis will be placed on R&D in the future.
It is better to be a tyre manufacturer in Western Europe rather than the USA, say analysts from the Deutsche Bank. The main reason is that raw material prices, billed in US$, have risen 20 per cent in Dollar terms, but only 3 or 4 per cent in Euro terms. Another advantage is in the performance of the respective tyre markets, with the European replacement truck tyre market in the first four months up 5 per cent (US market up 2 per cent) and the car tyre market in Europe rising 8 per cent, against a 5 per cent decline in the USA.
SmarTire Systems Inc. the leading developer of tyre pressure and temperature monitoring technology, has announced results for the third fiscal quarter ended April 30, 2003. Gross revenue for the third quarter totalled 638,323 US Dollars, an increase of 234,393 US Dollars or 172% over the same quarter in 2002. Year-to-date revenues for 2003 of 1,182,674 US Dollars represent an increase of 52% over 2002 revenues of 779,687 US Dollars. SmarTire recorded a quarterly net loss of 1.54 million US Dollars or loss per share of 0.06 US Dollars compared to a net loss of 1.51 million US Dollars or loss per share of 0.09 US Dollars for the same quarter last year. ”The positive revenue results achieved during the third fiscal quarter reflect SmarTire’s continued success in establishing a distribution network that penetrates global markets at the original equipment manufacturing (OEM) and aftermarket levels with new and existing products,” says Robert Rudman, President and Chief Executive Officer of SmarTire Systems.
In the USA, Bridgestone/Firestone has turned more than 200 of the company’s trailers into mobile billboards, featuring images of tyres and vehicles. One side of the trailer features Bridgestone tyres fitted to an Enzo Ferrari, motorcycle, 18-wheeler and stylised Grand Prix racing car. The other side pictures Firestone agricultural and racing tyres, with pictures of a tractor and an Indy Car. The brand’s heritage is emphasised by a picture of Harvey Firestone.
Kumho Industrial, until recently the owner of Kumho Tire, has been trying to find a new investor for the tyre division. An investor that would allow the incumbent management and strategies to remain in place, albeit in an enhanced form. The new arrangement is such that the Tire Business Unit has been acquired, with a 50 per cent share being taken by the Military Mutual Aid Association, a military pension fund. Kumho retains a 30 per cent share, and the balance is made up from a number of smaller investors. This establishes a new joint venture with an initial value of 1.2 billion US Dollars. T&A visited J. M. Kim, managing director of Kumho UK, to get a first hand reaction to the new joint venture.
Indian tyre manufacturer JK Tyre has said that it will invest 105 crore Rupees US$ 22.45 million) over the next three years to increase capacity at its radial truck tyre plant in Mysore and to increase the number of service and tyre care centres. $16 million would go towards increasing annual capacity from 240,000 tyres to 350,000 units while the remainder would be spent on increasing the number of tyre care centres to 100 and adding five more service centres.
Hayes Lemmerz International, Inc. has emerged from its voluntary Chapter 11 reorganisation. Hayes Lemmerz, substantially all its U.S. subsidiaries and one Mexican subsidiary successfully concluded its reorganisation after completing all required actions and satisfying all remaining conditions to its Plan of Reorganisation. The Company now has a more manageable capital structure and a reduced level of debt. The Company’s current total financing package is valued at 800 million US Dollars and includes: a 100 million US Dollar senior secured revolving credit facility maturing in 5 years; a 450 million US Dollars senior secured term loan facility maturing in 6 years; and 250 million US Dollars of senior unsecured notes, maturing in 7 years. Curtis J. Clawson, CEO said, “Now with the Chapter 11 behind us, we not only have significantly reduced the Company’s debt level, but have also improved our capital structure in a way that allows for our future growth. We have improved the operating structure and practices of the business and effectively transformed it into a healthier company. We are re-energised and will continue to aggressively pursue our goals of satisfying our customers, becoming a low-cost producer and having the best people.”
DaimlerChrysler (DCX) management has said that the company expects the Chrysler division to lose 1 billion Euros in the second quarter – industry analysts had been predicting a 200 million Euros profit. Lower revenues from vehicle sales and continuing high incentives in the US market were cited as two of the main reasons. Analysts have changed their full-year forecast for Chrysler from a 700 million Euros profit to a 336 million Euros loss.
Yokohama Rubber Co. has released its results for the fiscal year 2003, ending 31 March. Net sales rose 0.2 per cent to 400,448 million Yen (3.38 bn US$). Operating income was up 2.1 per cent to 23,184 million Yen ( $ 195.6 m), while net income rose sharply (by 37.8 per cent) to a record 10,144 million Yen ($ 85.6 m). Sales of the Tire Group accounted for 71.7 per cent of net sales and were up 1 per cent to 286,987 million Yen ($ 2.4 bn), with operating income up 10.8 per cent to 17,264 million Yen ($ 145.6 m).
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