September 13, 2010
Stay with Bandag or switch to Michelin?
John Snider made the toughest decision of his career in 2009. He explains what led to his decision, and its repercussions
By: Mike Manges
Switching suppliers "was the right thing to do for our business," says John Snider. "At no time did I question the decision." Snider Tire's five Michelin retread plants together produce 2,000 units per day.
In 2009, John Snider made what he calls the hardest decision of his career: switching from long-time supplier Bridgestone Bandag Tire Solutions (BBTS) to a new supplier, Michelin North America Inc.
Snider Tire Inc. had been a Bridgestone new truck tire dealer since 1980 and a Bandag retreader since 1985.
By switching to Michelin, Snider Tire also became a Michelin Retread Technologies Inc. (MRTI) retread franchisee. In this exclusive interview, John Snider explains why he made the move.
MTD: What led to your decision to switch from BBTS to Michelin? What was the scenario?
Snider: Our industry is evolving. Goodyear has been in the retreading business and when Michelin got into the retreading business over 10 years ago, it started to change the dynamics of our industry. You had Bandag, which was an independent company, and you had Bridgestone, which did not have a retread process that was widely in use in the U.S.
I think most dealers felt that ultimately Bridgestone would buy Bandag. It seemed like a logical thing. But as long as Bandag was an independent company, the choice to renew your (Bandag) franchise was a pretty easy choice because you retained access to all the (new truck tire) brands and you really weren’t tied to anybody. For example, if I was doing business with Michelin, that was my only tie to them — that they were selling me new tires. If they didn’t want to do business with me or I didn’t want to do business with them, I could find somebody else, but I still had my Bandag plants.
Bandag was a free spot on the bingo card. They kind of helped us maintain our independence.
When Bridgestone bought Bandag (in 2007), I think from my perspective the decision to renew the franchise became a different decision.
It became “Do you want to align yourself with Michelin, Bridgestone or Goodyear?” I could give you a case for or against all three, so there is no perfect answer.
MTD: Were you being courted by Michelin at the time?
Snider: There aren’t a lot of secrets in our industry. They know when people’s franchises are expiring, so I wouldn’t say we were courted. But they were aware of the situation — that we would be coming up to a franchise renewal — so they started some conversations. It evolved over many months.
As the opportunity was presented to me, it became clear that in the case of Snider Tire, it was the right business decision. I wasn’t mad at Bridgestone or Bandag. I have tremendous respect for them. I also have a lot of respect for Goodyear. It wasn’t that I was unhappy with anybody.
This was a game changer for us. For us to make the decision to move from a long-term relationship with Bandag and a long-term relationship with Bridgestone to a closely aligned relationship with Michelin... it was a very difficult decision. It was not made without tremendous analysis and soul searching. But we were presented with an opportunity because of where we are and it made sense to Michelin. We have less in-line competition over our footprint than we had before, and it just made sense to move in that direction.
MTD: Did BBTS make any overtures to convince you to stay with them?
Snider: I was having conversations with them, as well. They are great people. They treated me well personally and they treated Snider Tire well. It just came down to what the opportunity was for Snider Tire to stay the course we were on versus going a different course. I made the decision that we were going to take the different course. I felt that was the better opportunity for our company.
MTD: In an earlier conversation with MTD, you mentioned that there was “no way to anticipate what we went through” converting from BBTS to Michelin. Can you elaborate?
Snider: We communicated our decision to BBTS toward the end of our franchise period. Our franchise was running out. They elected — and certainly it was their right — to terminate our franchise on its termination date. We had eight Bandag plants and in 45 days we were going to have two MRTI plants, and we had a lot of tires to retread. We asked ourselves, “How are we going to manage all of this?” We used other dealers — other MRTI retreaders — to retread tires for us. We had to tremendously ramp up production at the two plants we were acquiring.
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