“Cleveland: You Gotta Be Tough.” It’s more than a cynical slogan that appeared on t-shirts and bumper stickers after the northeast Ohio city’s manufacturing-based economy started to tank more than 25 years ago.
It’s a way of life for Cleveland’s independent tire dealers, who are fighting to stay profitable while the city undergoes a massive shift from factories and smokestacks to -- well, nobody is quite sure yet.
Cleveland is still recovering from the late 1970s, when its economy bottomed out and the city declared bankruptcy. Since then, Cleveland’s powers-that-be have spruced up the city’s once-desolate downtown with a sparkling new ballpark and multi-million dollar entertainment district. And officials are working to attract new businesses to the area, many of them white-collar enterprises.
But drive several blocks east, west or south and you’ll still find neighborhoods that have seen better days and hard-working people who are struggling to make ends meet. The ensuing squeeze is being felt by businesses like department stores, restaurants, taverns and tire shops.
Nobody can deny that Cleveland is one tough city. But fortunately, so are its independent tire dealers.
Long-term presence
Few people know the Cleveland tire market better than Gary Adamic, president of Safeway Tire Co., a dealership directly east of the city’s downtown business district. “Everyone thinks they can make a million dollars (in Cleveland), but unless you have a strong business plan and good people, it’s not gonna work.”
Gary’s father, Ernie Adamic, founded Safeway in 1949 as a gas station. Since then, the company has grown into one of Cleveland’s most prosperous tire dealerships, employing more than 80 people at three buildings within a stone’s throw of each other.
Retail tire sales and automotive service comprise roughly 50% of Safeway’s total revenue; wholesaling -- mainly to other tire dealerships in and around Cleveland -- makes up the rest. “We have a 13-truck fleet that’s constantly on the move. We try to get a tire in a dealer’s hand within two hours. It’s not uncommon for major competitors to fill their inventories with our tires.”
Efficiency is a Safeway hallmark. Adamic promises retail tire buyers their vehicles will be in and out of his shop within 30 minutes. “We’re a labor-intensive facility. People who don’t want their vehicles sitting for a long time come here.” He doesn’t take appointments; business is 100% roll-in. “Nobody gets turned away.”
To streamline operations, Safeway splits tire and auto repair work between two color-coded facilities: its main store, or “blue building,” which only handles tire-related jobs, and the “red building,” a 28-bay garage next door that’s devoted to undercar, front end, suspension and engine work.
Changes in Cleveland “occur slowly over time,” says Adamic, who had five brothers in the business at one point (his sisters, Lynn and Peg, still work for the dealership, as does his brother-in-law, Mark Yagour.) “Rarely do you have massive changes.” But some have been more pronounced than others.
“You get people who’ll come in here and drop money like it’s nothing, which you never saw years ago, and you have people who are legitimately struggling -- I’m seeing more of that, too.
“It’s not common anymore for someone to walk into my office and say, ‘I want the tire that will give me the most service and the best safety.’ You might get that one out of 40 times, but nine out of 10 times you’ll hear, ‘I want the cheapest thing you’ve got.’
“The business also is not as fun as it used to be. There’s a lot more incivility. People believe they can come into a store and behave in any fashion they choose without repercussion.”
Some things stay the same, however. “We’re still a family business. We have loyalty to our employees. Nobody at Safeway, even in the worst of times, has been laid off, unlike what you get in corporate America today.”
Adamic maintains his dad’s long-standing tradition of hiring newly arrived immigrants, many from Central and Eastern Europe. Several years ago, he started putting ex-cons to work through an arrangement with the State of Ohio.
“I have a lot of friends who think I’m crazy for what I do,” says the straight-talking dealer, who logs an average of 55 hours a week at the shop. But he still enjoys the business. “Even though Cleveland is a big city, it’s still like a small town. I took care of fellas when I first started (30 years ago) who were probably in their 40s then, and as time passed, I’ve gotten their sons, and their sons. We’re doing something right.”
Old-world loyalty
Return customers form the backbone of many Cleveland dealers’ businesses. But price is becoming more of a factor in the market, says Ray Adamowicz, executive director of the Greater Cleveland Tire Dealers Association (GCTDA) for the last two decades. (Adamowicz also sold equipment to Cleveland dealers with Akron, Ohio-based Myers Tire Supply for 40 years.) “Before, you might do business with Joe because your dad did business with Joe. But here comes the kid, who’ll switch (dealers) for two cents.”
However, older buyers tend to be more loyal, he says. He knows some customers who have driven from one end of town to the other because they liked a certain dealer.
Cleveland’s ethnic customers are particularly loyal to dealers who share their nationality, he says. “They all go to the same churches, the same social clubs -- they’re a tight-knit bunch.”
One beneficiary of this old-world parochialism is Paul Stefanac, owner of P.S. Tire Inc. on the city’s far east side. Stefanac, 52, came to the United States from Croatia in 1975 at the age of 25, following an older brother who had immigrated to America several years earlier to work in a factory. He started working at Safeway as a tire changer and graduated to road service work within several months. In 1985, he opened his own tire shop with Paul Smolic, a fellow Safeway employee he had known since childhood.
Ninety-percent of Stefanac’s customers are of Croatian or Slovenian descent. Stefanac and employee Mika Pavlek, who immigrated to the U.S. three years ago, are just as likely to speak to customers in their native tongue as they are in English. “We understand all languages from the former Yugoslavia,” says Pavlek, who works in the dealership’s modest-sized garage. Stefanac also knows some German.
He markets directly to his customer base by running ads on a local short-wave AM radio station that specializes in Eastern European-style music like polkas. Most of his spots air on the weekend when more people are listening. Stefanac says the plugs have pulled more customers into his shop than coupons or Yellow Page ads.
A big man with a powerful grip, he turns wrenches as often as his employees. “No boss here,” he says with a grin. “Work is boss!"
When he started the business, he just sold tires. Now the company provides a wide range of services like brake jobs, front end work, alignments, tune-ups, and air conditioning.
Last July was the company’s best month ever, which Stefanac credits to extra traffic generated by the opening of several new businesses across the street, including a Home Depot outlet and a Honda dealership. It’s not always smooth sailing, though.
Unemployment in the neighborhood is high, Stefanac says. Auto parts manufacturer TRW Inc. closed a factory just six miles from his outlet last year. Though most residents around his shop are long-term, younger ones are moving out of the city and into the suburbs.
Stefanac has diversified by selling tires to new and used car lots and performing alignments for local body shops. “When you do a good job, people talk.”
In with the new
Cleveland has traditionally been a mom-and-pop tire market comprised of homegrown companies.
Riviera Beach, Fla.-based Tire Kingdom Inc.’s entry into the market through its unexpected acquisition of long-time local chain Mueller Tire & Brake Inc. last February not only turned heads but also sent shock waves rippling throughout the local tire-selling community.
Mueller Tire had been a Cleveland fixture since 1919 when company founder Walter J. Mueller began selling Model T tires out of a downtown, dirt-floor building and delivering them via trolley car.
Over the following decades, the dealership, first under Walter’s leadership and, later, under the direction of his son, Walter D. Mueller, and grandsons, Scott and Dean Mueller, developed into a prosperous, multi-store chain that differentiated itself with great success by marketing high-end tires and service instead of price.
Tire Kingdom has taken the opposite approach. Not long after buying Mueller Tire, the TBC Corp.-owned company began running radio commercials throughout northeast Ohio touting “four tires for $76” (most of Mueller Tire’s former stores are located in Cleveland’s suburbs). Later spots advertised sets of 40,000-mile tires for $59.99 and deep discounts on flag brand products.
Many of Cleveland’s independent tire dealers were up in arms. One dealer accused Tire Kingdom of trying to “whore out” the market. Another called the chain’s pricing “predatory.”
Tire Kingdom -- the third largest independent tire store chain in North America with more than 200 outlets -- calls it business as usual.
“We didn’t buy (Mueller Tire) to market the way they did business,” says Tire Kingdom CEO and President Orland Wolford. “We don’t dictate what pricing is; the customer dictates what pricing is."
Other dealerships in Cleveland advertise “entry-level or traffic-building” tires and services, he says. “Other than our entry-level pricing program, we’re not what you’d call cheap.
“We have a marketing program that works well for us. We receive a very satisfactory recovery.”
Wolford declined to comment on how the Mueller sale came about other than to say “we became aware that there was an intent on their part to sell. Long-term, we had planned to go to Ohio. Mueller became available and we felt it was a good place to start.”
Cleveland appealed to Tire Kingdom for other reasons. The city “is more vibrant than 10 years ago,” Wolford says. Many of its suburbs are relatively affluent. “All are in high-growth areas.”
Merging the company’s corporate culture with that of Mueller Tire wasn’t difficult, according to Wolford. “We’ve brought Mueller people down (to company headquarters) and have sent them through our training school. When we first bought the company, we sent Tire Kingdom (personnel) to Cleveland stores to train and develop the people.”
The chain does not plan to change its brand mix in Cleveland. Tire Kingdom sells Michelin (a Mueller mainstay), Continental, General, Pirelli, Toyo, Dunlop and Sigma label products. Since buying Mueller Tire, the company has opened two more outlets in the greater Cleveland area -- a former Firestone store and an old independent tire shop -- bringing its total store count there to 19. (Tire Kingdom also has four stores in Columbus, Ohio -- the state’s capitol -- more than 100 miles southwest of Cleveland.) Company officials have identified sites for more shops.
Tire Kingdom’s first challenge in Cleveland is to “merchandise ourselves to let customers know who we are... to establish word-of-mouth and build customer confidence," Wolford says. “Our objective is to be the number-one tire and auto service retailer in Cleveland.”
Tire Kingdom enjoys 20% market share in its home state, according to Wolford, and wants to achieve the same percentage in Cleveland. “For the short time we’ve been in Cleveland we’ve seen some good movement. We’re pleased with the steady progress we’ve observed.”
Dean and Scott Mueller continue to wholesale tires to auto dealerships throughout the country under the Dealer Tire banner.
They were unable to comment on Tire Kingdom’s buy-out and the Cleveland market itself due to an agreement with Tire Kingdom. They also declined to comment on their current enterprise.
Strategically aggressive
Shortly after buying Mueller Tire, Tire Kingdom announced its “marriage” to the Cleveland chain by advertising extremely low prices on the radio.
Almost immediately, west side-based Conrad’s Tire Service Inc. began running commercials “welcoming” Mueller Tire customers into its 23 stores around town.
Conrad’s wasn’t taking a shot at Tire Kingdom with the spots, says company President and CEO John Turk -- just addressing potential business opportunities created by the sale.
“We choose our opportunities to be aggressive -- when it’s smart, when it makes good sense,” says Turk, who became the company’s top officer in 1989. “Otherwise, we’re a meat-and-potatoes company.
“If you go out and look at the landscape -- the national chains and other independents -- we like the position we’re in. We’re homegrown but a little larger. We can bring certain things to the party because of our size and the number of locations we have.”
The chain, which focuses exclusively on retail tire sales and automotive service, covers a wide geographical area, with 21 stores located in Cleveland’s suburbs. “We can offer the (amenities) of 23 outlets but we can do it in a hometown way. And we’re probably the only ones who can do that with Mueller leaving.”
Cleveland always has been a strong independent market, he says, thanks, in part, to auto manufacturing plants that have operated in and around the city over the years.
Turk says the market’s dynamics haven’t changed dramatically since he started with Conrad’s in the mid-1980s. “It’s a small- or no-growth market. Population in Cleveland has declined for many years” (the city’s population has fallen to around 500,000).
Consolidation hasn’t been a major factor in Cleveland, according to Turk. “Our market doesn’t rationalize very well. The only time you see rationalization is when a person has to sell.”
The city’s stagnant economy remains an issue. “In the '80s, it was down. The aftershock of the oil embargo and those issues kind of caught up with the steel industry (decline). The city took a step backwards.” Cleveland rebounded a bit thanks to the revitalization of its downtown area during the 1990s, “but as a whole, our economy is pretty flat.”
Turk credits much of Conrad’s success to the strategic location of its outlets. “We have stores from one social demographic end to the other. It works OK; you just have to take care of the customer.”
Switching to a multi-brand retail approach has paid off, as well. For years, the chain sold only Goodyear brand products, but realized over time that offering only one label “can be somewhat limiting. With a multi-brand strategy, we’re looking to attract new customers.
“But it only serves us if we can make it incremental. If I’m doing 'x' tires a day, bring in another brand and am still doing 'x' amount a day -- and now have a different mix -- I’ve just split my loyalties and have lost my opportunity to have a bigger voice with the manufacturer. It has to be add-on for us.”
Conrad’s biggest problem has been finding correctly zoned land at an affordable price. “It’s been difficult. The area is fairly mature.” Turk has no plans at the moment to expand beyond the greater Cleveland region. “We feel we still have a job to finish here. I think the day will come when we’ll stretch the organization into other markets, but we aren’t going anywhere. We’re committed to this marketplace because it’s our home and what we love.”
Wait and see
Lady at counter: “Did you find something wrong with my car?”
George Birsic, winking back at her: “No, but we can find something wrong if we keep looking!”
That’s the kind of easy rapport Birsic, owner of Lakewood Firestone, has with his customers, which keeps them coming back year after year.
Birsic bought the dealership, a local fixture for 50-plus years, in 1987 after a long stint working for Sun Oil Corp. as a salesman. “We’ve grown our business in all aspects because of our ethics,” says Rich Birsic, 35, George’s son (that's George and Rich Birsic in the photo accompanying this article). “We provide a good value. We don’t sell anything that someone doesn’t need.”
But recent years haven’t exactly been a boom time for Lakewood Firestone. The Birsics, who play-up their Firestone affiliation, say they lost more than $100,000 the first year after the August 2000 Firestone recall.
Firestone sales have since rebounded; in fact, the Birsics sell more Firestone units than any other brand. But overall tire sales are still off “due to the economy,” Rich says. “People don’t have any spare cash right now.”
Lakewood is a bustling community adjacent to Cleveland’s west side. Most of the Birsics' customers are middle-class. “We see a lot of everyday, blue-collar cars.”
Eighty-five percent of Lakewood Firestone’s customers live in the surrounding neighborhood; 10% live in Cleveland and adjacent suburbs; and the rest drive in from up to 15 miles away. “We have an older clientele,” Rich says, which provides its own set of challenges. “They don’t trust young people. I had a hard time when I started working at the counter at 25, 26 years old. They always wanted to see my dad: ‘Where’s the older guy?’”
Many elderly customers are on fixed incomes and carefully scrutinize every purchase. “You have to explain things more to them.” The Birsics are toying with ideas to draw younger buyers, including opening an on-site detail shop and expanding into body work.
Selling tires in Cleveland used to be more seasonal, according to Rich. Snow tires are disappearing for a variety of reasons, he says, including milder winters, more SUVs on the road and the proliferation of all-season tires. “I normally sell 150 to 200 snow tires a year; the past three years, I’ve sold 40.”
The Birsics have considered expansion, “but the economy will have to improve before we do anything with it,” says Rich. “I hate to use the old cliche, ‘It’ll get worse before it gets better,’ but maybe that’s the case.”
City life
Few new independent tire dealerships have opened in Cleveland during recent years, according to GCTDA estimates. Cleveland Tire & Wheel is one of the exceptions. Owner Donnie Schilling opened his single-location shop a year-and-a-half ago to little fanfare, but has built the company into one of the city’s premier high performance tire/custom wheel destinations. “We went from doing $180,000 during the first eight months of 2001 to $600,000 by the end of July this year,” he says. Prior to going into business for himself, Schilling worked for several tire dealerships, including Tire Centers LLC in Akron.
Custom wheels “are a huge part of our business,” he says. He stocks six different wheel brands, including Epic, American Racing and Limited Alloys. “It’s fun to do.”
Cleveland Tire & Wheel’s advertising is extremely limited. Schilling runs ads in local papers and auto trader magazines and has sponsored cruise-ins.
The dealership’s typical tire/wheel package sells for $2,500. “During the hot season, we’ll sell 16 to 20 sets per month.” Cleveland’s wheel season starts in February, he says. “March gets better and April goes through the roof.” May and June are good, but rim sales start to drop off in early July.
Many non-traditional outlets like car audio centers and body shops sell custom wheels in Cleveland, “none of which know much about wheels or have any equipment to solve problems.”
Customers who buy rims from such operations often bring them to Schilling for mounting.
Doing business in the inner-city isn’t always easy, he admits. When he started, his biggest problem was “finding employees who, number one, would show up for work, and number two, wouldn’t steal from me.” But he also likes working with customers there. “They’re a lot more understanding than customers in suburban communities. It’s inevitable that once a month you’ll strip a lug nut or something like that. Here, it’s like, ‘Stuff happens.’ We’ll take care of it and it’ll be no problem.
“In the suburbs, God forbid that something goes wrong. People in the city roll with it a lot easier.”
Schilling also does well selling used tires -- a bright yellow placard out front proclaims “Four Tires Installed for $80” -- and he’d like to wholesale more performance tires and wheels. He also plans to move into a bigger facility within the next six months. “Customers are loyal here. They won’t chop me off at the knees.”
Shrinking margins
“It’s tough to make a really good buck” selling commercial truck tires in Cleveland, according to Safeway Tire’s Gary Adamic, whose company has moved away from the segment. “That’s one of the businesses that’s been prostituted over time. Everybody wants to get into it. There are a lot of national accounts -- everybody’s trying to beat each other up.”
Lack of wheel positions is another hindrance, says Marc Blum, vice president of Victor Bodie Tire Co., one of the city’s oldest truck tire dealerships. “There aren’t as many large trucking companies based here.” Years ago, “we had a lot more terminals. Most of the companies now are regional or national. They buy national accounts and do all of their purchasing out of their home offices. A lot of them don’t even repair tires here!”
Blum’s dad, Mort Blum, bought Victor Bodie Tire in 1959 as an existing dealership, and he still works at the company. Both Blums lament shrinking profit margins on truck tires, and Marc says manufacturers are partially to blame. “Why do they make tires that last 300,000 miles on the road? All they’re doing is cutting their resale. When I started, I’d guess a road tractor got 70,000 miles on a lug-type steer tire. Now steer tires are getting 80,000 to 125,000 miles, no problem, and drive tires (get) anywhere from 225,000 to 300,000 miles or more.
“The end price to the user does not reflect the mileage and quality they’re getting these days. And (manufacturers) still want to increase the mileage!”
Victor Bodie Tire’s roster of commercial clients has stayed about the same over the years. “They come and go between going out of business and selling out,” Marc says.
The company makes a tidy profit retreading truck tires, though its output fell last year. “When the economy slows, you think it’d be good for retreading, but there aren’t as many trucks running. Local trucking companies have taken a big hit.”
During a good year, Victor Bodie Tire retreads around 2,500 truck tires using Vulcan precure equipment with two employees (the dealership employs six people). “I’m not after high-volume. I’m more interested in giving customers a quality product that’s not going to fail.”
In a market where some customers interpret bigger as better, there are certain advantages to staying small, according to Blum. “I don’t have a big, fancy building. I try to watch the overhead. I can keep a closer eye on customers and take better care of them.”
However, Victor Bodie Tire’s small size makes absorbing escalating costs like those for insurance premiums more difficult, he says. The single-store company’s insurance rates rose 19% this year. “How are you supposed to pass on the cost? Every time we sell, we gotta add a dollar on over our normal cost.”
Blum is not direct with any manufacturer. He predicts that more trucking companies in Cleveland will do business with major tiremakers on a national account basis, freezing smaller dealers like him out of the picture. Staying truly independent “is tougher and tougher,” he says. “But I like calling my own shots. I don’t like someone dictating to me. If I’m gonna own a business, I want to run it the way I see fit.”
Industrial changes
John Cupedro, president of Economy Tire Service Co. (ETS), another commercial dealership, has made an art out of adapting. Years ago, ETS supplied tires and service to Cleveland steel mills and intermodal yards, but both industries “have deteriorated,” says Cupedro, who bought the dealership from his father and company founder, John Cupedro Sr., two years ago. “A lot of companies have gone by the wayside.” (Cleveland is the nation’s 10th largest industrial market with nearly 280,000 workers, according to the Greater Cleveland Growth Association.)
Cupedro has recovered by seeking out and servicing customers in other fields like construction, excavation and sanitation. “We look at industries, not just particular clients.”
Cupedro and his sales force ask prospective clients to fill out “Fact Finder” sheets that ask for information about their operations. Questions include what industries they service, how many vehicles they have, tire sizes and brands currently being used, and types of rims they buy, among others. “We ask as many questions as possible. I don’t talk about price until at least the second time out. I’m more interested in getting as much information as I can.”
Most of Cupedro’s customers are in the Cleveland area. “Half of service is location,” he says. ETS’s headquarters, shop and warehouse are strategically located just a few blocks from I-77, a major interstate that slices through Cleveland north to south.
ETS offers road service as needed. “I have a 24-hour guy who does night calls, but that’s a premium service for premium customers.”
The dealership also has carved out a profitable niche re-grooving used tires and even employs a re-grooving expert. “Not too many people do it (due to) lack of know-how,” he says. The service lets him “salvage a lot of good tires at no more than what I’d sell a casing for.”
ETS moves a good number of used truck tires, which are ideal for high-impact applications, according to Cupedro. He sells them for $50 to $150 each depending on overall quality. ETS also sells passenger and light truck units to commercial tire customers with other vehicles like company cars and vans. “If you’re spending $100,000 a year on truck tires with me, why should you go somewhere else for passenger tires?”
Cupedro’s focus on developing his own business has enabled ETS to weather Cleveland’s economic downturns. The company had its best two months ever in July and August. “I don’t foresee any radical changes in the Cleveland market,” he says. “All I ask myself is, 'What portion can I get?’"
Niche focus
All-Terrain Tire Inc., an OTR tire dealership just a few blocks from ETS, also is doing well selling to industrial clients.
The 23-year-old company has “the lion’s share” of OTR wheel positions in Cleveland, according to owner Dave Oster. All-Terrain services sandpits, landfills, steel mills and general contractors around the city, plus two salt mines underneath Lake Erie.
“We keep seven to eight crane trucks busy all the time,” says Oster, who charges up to $67 an hour for service calls. All-Terrain performs an average of 100 calls a week; jobs typically last three hours each.
The company also picks up OTR tires from tire dealers throughout Ohio, Michigan, Kentucky and West Virginia, and brings them back to Cleveland for section repairs.
“We also have a tire bank of different sizes,” says Sales and Service Representative Steve Dziedziak. “We can loan a spare tire to a customer for a small fee. It keeps their machines running.”
The OTR tire business in Cleveland hasn’t changed much over the years, according to Oster. “We have less competition but there are fewer wheel positions,” which he partially attributes to the steel industry's decline. Cleveland’s once-thriving steel industry “was totally mismanaged” by company decision-makers, union officials and the city’s government, he says.
All-Terrain’s office and shop overlook LTV Steel’s old manufacturing complex. (LTV Steel declared bankruptcy in late 2000.) Part of the plant has since been taken over and reactivated by International Steel Group. “In the old days, we’d have a guy (at the LTV plant) all day long. Now we have (someone there) 15 hours a week.”
Out in the 'burbs
Dealers in Cleveland’s suburbs are just as persistent as their counterparts in the city.
After many slow years, tire sales have picked up for Parma-based Kurak’s Tire Center. Parma is a middle class community near Cleveland’s southwest side. “I’ve had a record month every month over the last couple of years,” says owner Ron Kurak.
Kurak’s Tire opened in 1979 as a repair garage. The city of Parma said he had to open some kind of retail business because of local ordinances. Auto service still comprises the overwhelming majority of the company’s total sales.
Kurak’s Tire only offers one brand, Kelly. “I originally started selling Firestones and brought Kelly in as a (less expensive) line.”
Kurak -- whose brother, Bob, and two sons, Ron Jr. and Dave, work in the business -- advertises through Yellow Pages and coupon circulars. “You try to figure out what the customer wants.”
Years ago, Kurak operated a service station in downtown Cleveland, but says he’d much rather do business in the suburbs. “You get a higher class of people as far as income goes. In the inner-city, it’s a little bit different.”
Merle Ettinger, owner of Finn Tire Co. in Bedford Heights, a more upscale town than Parma, also prefers selling tires in the suburbs, which he describes as being “more stable. The number of people who live in the City of Cleveland drops every year.”
Finn Tire's single location primarily sells passenger and light truck tires. Ettinger started working for company, which was founded by Leonard Finesilver after World War II, nearly 40 years ago. At one point, Finn Tire had four outlets.
Income levels in directly adjacent suburbs seem to be falling, he says. “But we draw a lot of people from upper-middle class communities,” adds Brian Ettinger, Finn Tire's vice president.
The Ettingers cite a local Sam’s Club outlet and a B.J’s Wholesale Club store within two miles of their shop as major competitors. “They sell a lot of tires,” Merle says. “They’re tough.” NTB also has a strong presence in the area.
To fight back, Merle and Brian promote auto service, which comprises a much bigger percentage of their sales than in the past. “We’re not a tire dealer anymore,” Merle says with a shrug. “We’re a repair garage that sells tires!”
They also sell themselves. “A lot of people like the fact that we’re the owners -- we have a vested interest in the company,” says Brian.
It’s difficult for Finn Tire to compete with the resources of large corporations, Merle admits. “We have to make sure we give the customer value for his money and make him want to come back over and over again.”
What it takes
Dealers agree that maintaining profitability in Cleveland will continue to be a challenging task. “It’s not like the bar business, where you buy a bottle of beer for 50 cents and sell it for $2.50,” says Ron Kurak Jr.
“People expect more for less,” says Lakewood Firestone’s Rich Birsic. “You sell a set of tires, they think they should get an alignment for free.”
“It’s always been tough,” says Marc Blum of Victor Bodie Tire. “You do any business you can.”
However, despite the problems they face each day, dealers say there’s no big secret to success in Cleveland.
“You come to work every day, you work hard, you market, you do a good job for the customer, and the few times you don’t do well, you make up for it,” says John Turk of Conrad’s. “A lot of times people in the tire industry think that problems with growth and margins and expenses are something unique to our industry, when the reality is, if you’re in another business, you’d probably be complaining (about the same issues).
“What we have to do is what every business has to do, and that’s diligently look for opportunity.”
Friendly competition?: Cleveland dealers react to Tire Kingdom’s local strategy
“Lots of Cleveland dealers are friendly to each other,” says Ray Adamowicz, executive director of the Greater Cleveland Tire Dealers Association. “A lot buy from each other. But when it comes to business, they’re a different breed of cat.” He’s seen Cleveland dealers sell under their cost just to beat out a competitor down the street. But when outsiders like Tire Kingdom Inc. enter the market, many put their differences aside.
“Tire Kingdom is trying to come in and grab business, but I don’t like the way they’re doing it,” says Rich Birsic, vice president of Lakewood Firestone. “Once tires sell for $7.99, people aren’t going to want to spend $50 per tire.”
Four tires for $50 “is just not realistic,” says Ruben Estremera, owner of Westown Tire Shop. “When Mueller advertised, I never heard them talk about price -- they advertised service and quality, things that customers realistically look for. Tire Kingdom is doing it completely differently.”
Other dealers take a more philosophical slant. “I assume Tire Kingdom has done a lot of research and has a whole transition plan,” says John Turk, CEO and President of Conrad’s Tire Service Inc. “When our organization has done acquisitions, we try to extract value on a long-term basis. And the way you do that is to change as little as you can in the short-term, particularly if the model’s not broken.”
“I can remember when National Tire Warehouse came around, and later NTB, and people said, ‘That’s not going to last. They’re doing it all wrong,’” says Merle Ettinger, owner of Finn Tire Co. “But you know what? They’re still here.”
Cleveland at a glance: City has come a long way from humble beginning
Cleveland, Ohio, was founded in 1796 on the shore of Lake Erie by Moses Cleaveland, a surveyor from the Connecticut Land Co. Originally a frontier village, Cleveland is now the 30th largest city in the United States with a population of nearly 500,000. Nearly three million people live in and around Cleveland, making it the nation’s 16th largest metropolitan area. The city’s median household income is nearly $40,000.
* Cleveland is headquarters to more than 100 companies with revenues of $100 million or more, according to the city’s Convention & Visitors Bureau. Major players include banks like National City Corp. and KeyCorp., auto parts manufacturers TRW Inc. and Parker Hannifan Corp., Sherwin Williams Co., OfficeMax and others. Fortune magazine once rated Cleveland as one of the top cities for business in North America.
* Greater Cleveland is home to nearly 140,000 students in 21 colleges including Case Western Reserve University, John Carroll University and Cleveland State University. Nearly 25% of the population is college-educated.
* The top-ranked Cleveland Clinic draws patients from all over the world.
* Cleveland boasts world-class cultural institutions such as the internationally recognized Cleveland Orchestra and the historic Playhouse Square district.
* Cleveland “firsts” include the nation’s first African-American newspaper (1853); free home delivery of mail (1862); electric streetlight and streetcar (1879); indoor shopping center (1890); modern golf ball (1899); American diesel engine (1913); automatic windshield wiper (1921); municipal airport (1925); African-American mayor, major city (1965); and NFL “Monday Night Football” game (1970).
* Famous people from or who have lived in Cleveland include the 20th U.S. president James Garfield; Standard Oil founder John D. Rockefeller; actors Bob Hope, Paul Newman, Jim Backus, Burgess Meredith and Drew Carey; athletes Jesse Owens, Bob Feller, Jim Brown and Don Shula; law enforcement legend Elliott Ness; composer Henry Mancini; musician Frankie Yankovic (“The Polka King”); radio DJ Alan Freed, who ushered the term “rock and roll” into America’s popular vocabulary; talk show host Mike Douglas; boxing promoter Don King; and Superman, who was created in the 1930s by residents Jerry Siegel and Joe Shuster.
* Three major sports franchises call Cleveland their home: the Cleveland Indians (baseball), the Cleveland Browns (football), and the Cleveland Cavaliers (basketball). Cleveland also has pro hockey and soccer teams.
Great Lakes melting pot: Many nationalities comprise Cleveland’s cultural fabric
Cleveland has long been a melting pot for dozens of nationalities, particularly those of Central and Eastern European origin. The city contains the fourth largest population of Croats in the United States, and at one point boasted the largest number of Slovenes in the world outside of the small Slavic country itself. Tens of thousands of Slavs -- including Poles, Slovaks, Serbs, Hungarians, Russians, Ukrainians and others -- immigrated to Cleveland from the late 1800s through the mid-20th century to work in the city’s steel mills, factories and rail yards. Before them, waves of Irish, English, Germans and Italians immigrated to Cleveland seeking a better life for themselves and their families.
Before the emergence of suburbia, most of Cleveland’s ethnic groups lived in their own, self-contained neighborhoods, and many still do.
Cleveland’s 10 largest ethnic groups break down, in descending order, as follows, according to statistics published by the Cleveland Convention & Visitors Bureau: German, African-American, Irish, Italian, English, Polish, Hungarian, Slovak, French and Hispanic. Cleveland’s Asian and Arabic populations are on the rise.
