There are lots of lingering questions of what happens next after the creation of TireHub LLC by Bridgestone Americas Inc. and Goodyear Tire & Rubber Co. A conversation with Bridgestone’s TJ Higgins provided a few more answers.
1. Higgins says Bridgestone data shows that when it has opened a new Tire Wholesale Warehouse (TWW) location, other nearby wholesalers haven’t been hurt by the expansion. TWW is opening its 38th location this year, and it will be included in the TireHub joint venture with Goodyear.
“The data shows that as we bring a TWW to a market, we grow and many of the wholesale partners that are part of our network can also grow. We gain market share as we open a TWW. It’s more focused for our brand among the retail set, and it makes it easier for us and our wholesalers to get Bridgestone and Firestone fitments top of mind in the retailer market. The data at least has indicated that by bringing in a new location, it doesn’t necessarily mean the wholesaler in the market struggles.
“Now if they choose to not stock the full breadth of the line they may lose a few sales because our location would have the full breadth and depth. But if they’re still part of that network and they’re taking advantage of the increased focus we’re putting on any individual market, I think it gives them and us an opportunity to grow locally.”
Speaking of those wholesale partners, Modern Tire Dealer asked Higgins what happens when an established Bridgestone distributor finds a new TireHub location in its market. Is TireHub going to pursue that distributor’s retail customers?
“No, we would not look to move people from a wholesaler to TireHub specifically. Over time, we need wholesalers to continue to work with us and support our brands. Many of them are so incredibly loyal to us and we sincerely appreciate it. Many of them have been great partners for many years. We expect we’re going to grow with them.”
2. Both companies have stressed the importance of meeting the demands of “growing complexity” related to SKU proliferation, and that TireHub will provide “on-demand access to the full array of products from both companies.” MTD wondered if that might extend into each of their company-owned retail stores. Will Firestone Complete Auto Care stores offer Goodyear products, and will Goodyear Auto Service stores sell Bridgestone’s family of tires?
“No. TireHub will support the Goodyear stores with Goodyear product, the merchandise they have today, and TireHub will support the Firestone Complete Auto Care stores with our assortment as it is today. This is not a venture beyond distribution. It is not a retail activity, so there’s no change to either theirs or ours.”
3. Presuming the regulatory process doesn’t provide any hiccups, Higgins says the expectation is that TireHub will be up and running, ready to service dealers, by the middle of 2018. But there’s a lot of work to be done in Goodyear’s 45 company-owned warehouses, and Bridgestone’s 38 locations, between now and then. Will dealers be asked to pre-buy, or adjust their ordering schedules while the inventory of their local warehouses is adjusted?
“At this point in time we are not planning on doing anything different than what we would normally do to serve our dealers. We have time and we have some detailed planning. And we want to respect their wishes also.”
As of the date of our conversation (April 17, the date after the TireHub announcement), Higgins said Bridgestone hadn’t yet spoken to as many of its retail dealers yet (the initial focus was on wholesale partners, as well as original equipment manufacturers). “But as we do we’re going to listen to their feedback and adjust our plan to serve them.”
4. Peter Gibbons has been named CEO of TireHub. He comes to the joint venture from outside the tire industry, but has worked on supply chain and logistics at some big-name companies, including Mattel Inc. and Starbucks Corp.
Higgins says Goodyear and Bridgestone agreed to hire an external search firm “to scour the market” for leaders with logistics and operational supply chain capabilities. He says the companies suggested the search firm look in the tire industry, but also outside the industry, “and that’s how we found Peter.”
“He has worked in a broad range of supply chains including import supply as well as domestically produced supply. He’s supported company-owned stores in the past as well as supported retail channels that were dealer-like. His time at Glidden Paints he served both company stores and dealers, so he understood the concept of service that we wanted. His time at Starbucks gave him a very, very complex supply chain.
“And finally both teams, Goodyear and Bridgestone, interviewed Peter and felt as though he had a really great way that would work well in this industry. He had a style and vision in addition to supply chain capabilities that are so critical to support TireHub. We want a really strong person who’s going to meet our objectives and goals.”
Gibbons, who most recently worked at Mattel as executive vice president and chief supply chain officer, told the toy company on Jan. 2 that he had accepted another job opportunity, and that his last day would be Jan. 5.
5. Even with Gibbons’ experience in those other industries, Higgins acknowledges the tire industry presents some unique challenges.
“For that reason we surrounded Peter with a number of industry veterans, people who have worked at Bridgestone, people who have worked at Goodyear, people in the tire industry outside of our two companies. We’re putting together a leadership team to support Peter and TireHub that understands the companies, understands the industry, and will work together as a blended team to bring forward what’s best for dealers, what’s best for retailers, and really what’s best for the entire marketplace. (Higgins declined to name other members of the TireHub leadership team.)
“We want to build access. We want to make sure we have the right tire available at the right time that can be delivered with convenience and ease and that the customer and the consumer expect.”