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OTR Outlook -- Manufacturers Expect Demand in the U.S. Will Be Flat

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OTR Outlook --  Manufacturers Expect Demand in the U.S. Will Be Flat

Guarded best describes the outlook of four companies with large off-the-road (OTR) tire plants in the U.S. Michelin North America Inc., Bridgestone Americas Inc., Titan International Inc., and Goodyear Tire and Rubber Co. all expect demand for large OTR tires to be flat in 2016.

The perspectives on the large OTR marketplace for 2016 are from:

  • Jamey Fish, director of marketing, Michelin Earthmover North America;
  • Michelle Lane, director of off-the-road marketing, Bridgestone;
  • Cary Budzinski, general manager, OTR North America, Goodyear, and
  • Johni Francis, global product manager, Titan.

MTD: What is your outlook for the large OTR replacement market in the U.S. in 2016?

Lane, Bridgestone: Bridgestone is forecasting 2016 large OTR demand to remain flat to slightly up compared to 2015. Aggregates have shown growth in 2015 despite much documented reductions in production have occurred in the oil and mining industries. Bridgestone does not expect a large enough change in production or pricing in large OTR tire applications to affect 2016 large OTR tire demand.

Budzinski, Goodyear: We continue to monitor market conditions, including demand, and remain committed to the OTR business and meeting the evolving needs of our customers. We continue to see opportunities to provide our industry-leading tires and technologies – as well as best-in-class services, expertise and support – to help our customers optimize their operations.

Fish, Michelin: The global commodity market has experienced an extraordinary period since 2000. The dynamism we witnessed in the Chinese economy with respect to commodity consumption has begun to level out. This means the industry and its supporters are adjusting from the period of rapid expansion to one of stabilizing production.

Transition is always challenging. Based on current indicators, we feel that the bulk of the adjustment has been realized, and we can look forward to the homestretch leading to the “new normal” that will involve much higher commodity demand than prior to the 2000-2014 super cycle. For the tire industry, OTR customers will be increasingly focused in 2016 and beyond on the total cost of ownership and how well any given provider helps them meet their own business goals.

Michelin will suspend operations at its earthmover plant in Starr, S.C. at the end of this year. The decision to place the plant in standby mode affects about 100 employees, all of whom will be offered positions at nearby Michelin facilities. The plant and its equipment will be maintained so that operations can restart in a timely manner when market conditions improve and customer demand increases. In the meantime, we can produce the number of tires needed for our customers with existing capacity from other earthmover facilities, including the plant nearby in Lexington.

Francis, Titan: Commodity prices are a key factor in giant OTR tire demand. Mining companies are continuing to be cautious with production because of low commodity prices, and when coupled with the currently abundant supply of large OTR tires from multiple manufacturers, we anticipate demand to remain relatively flat.

MTD: Describe any trends or developments in tire technology.

Lane, Bridgestone: 2016 will be an opportunity for Bridgestone to focus on additional solutions and products which deliver value to our end users and dealers. A recent example is the launch of the TreadStat Mobile App which is a mobile companion to the cloud-based TreadStat Tire and Rim Management software. It is designed to replace the current paper-based vehicle inspection process and quickly allows you to conduct vehicle inspections online or offline, upload inspections to an online version of TreadStat, record tire pressure and tread depth, conveniently note critical exceptions that require immediate action and share inspection summary information with others via email.

Budzinski, Goodyear: Goodyear is always focused on optimizing customers’ total cost of ownership through tire performance improvement. Challenging operating conditions and the pressure for increased operational efficiency at mine sites are driving higher vehicle loads and higher vehicle operating speeds. As a result, tire temperature management as well as ensuring proper load-carrying capacity and overall tire durability will remain priorities, as our products continue to evolve in response to customer requirements.

Fish, Michelin: The trends are for increased productivity and mobile information. Owners want trucks to carry more, carry it faster and experience little or no downtime. And they want information at their fingertips on mobile devices.

Francis, Titan: Our LSW (Low Sidewall) technology is a product line we have been developing and testing. The design takes a standard assembly and increases the wheel diameter while maintaining the overall outer diameter of the tire. Similar to what we’ve seen in the passenger and light truck markets — the trend toward larger wheel diameters — what we’re doing is creating a high-performance OTR wheel and tire assembly. By reducing the sidewall of the tire, we increase machine stability and performance.

MTD: Do you plan to introduce any large OTR tire products in the U.S. market in 2016?

Lane, Bridgestone: Bridgestone is developing new products and solutions for launch at MINExpo International 2016 (Sept. 26-28 in Las Vegas) and CONEXPO 2017 (March 7-11 in Las Vegas).

Fish, Michelin: The mining industry has continued to place more demands on open-pit mine sites, specifically as it relates to the performance of machinery. Machines are required to be pushed to their maximum potential, especially in the 250T class trucks. The XDR250 50/80R57 was developed to fit Caterpillar 793F and Komatsu 830E AC haul trucks. It features greater load capacity, lower operating temperature, faster driving speed, higher level of performance for at least 24% improved productivity and longer life cycle compared to the Michelin XDR2 tire (40.00R57).

Miners who work in quarries, small surface mines, and construction areas use newer model loaders (CAT 988H and K model for example) that continue to increase in power, torque, speed, and load capacity. Users need tires that are well matched to support their uptime and cost targets. Michelin answered with the XTXL E4/L4 in three sizes: 26.5R25, 29.5R25, and 35/65R33 for above-ground and underground applications.

Francis, Titan: We’re introducing a new 875/65R29 for the Cat 982, as well as and its LSW counterpart – the 875/55/R35 LSW. We are also working on expanding our current underground mining tire line, as well as designing and testing new LSW sizes.   ■

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