New CEO and President Gaetano "Guy" Mannino has his work cut out for him at Pirelli Tire North America Inc. Three years ago, Pirelli handed over its sales responsibilities in the United States to Cooper Tire & Rubber Co. But on July 1 of this year, that partnership officially ended, leaving Pirelli with the unenviable task of re-creating its sales force.
In addition, Pirelli is aggressively pursuing original equipment contracts in Detroit. Its recent deal to supply Ford Motor Co. with tires for the 2003 Lincoln Continental, Ford Crown Victoria and Mercury Grand Marquis is its first in the U.S.
A racing enthusiast, Mannino may have to pick up the pace if he is to position Pirelli as a highly profitable, high-end domestic tire manufacturer -- something his predecessors in the U.S. failed to do, at least to the parent company's satisfaction.
MTD: When will your MIRS (Modular Integrated Robotized System) plant in Rome, Ga., be up and running? What type of tires will it manufacture? Will it supply tires to both the OE and replacement markets?
Mannino: We will start production in the fourth quarter. We had an official opening of the plant on August 17th with the presence of Georgia's governor. We will make products for the U.S. market both for replacement and selected OE tires. We will announce the specific product lines later this year. Our current plan foresees about a 50-50 split between replacement and OE products.
MTD: Is Cooper still manufacturing some product for you? Will that continue?
Mannino: Cooper is still making a line for us. We are reviewing future cooperations.
MTD: In a recent trip to Pirelli SpA headquarters in Milan, Italy, I was told you had relatively few salespeople canvassing the entire U.S. Will you be expanding your sales force?
Mannino: When we spoke in Italy we had five regions. We quickly found five regions were not enough to cover the U.S. efficiently, so we have added a sixth region. We are currently monitoring the effectiveness of our sales force and we will adjust it to our target of effective coverage of our dealer network.
MTD: In Italy, you said success in the U.S. depended on domestic OE presence.
What is your OE presence in the U.S.? What import vehicles are coming into the U.S. with Pirelli tires on them? Who are you talking with in Detroit or among the overseas transplants here in the states?
Mannino: In one of the slides of our presentation in Italy we showed 500,000 Pirelli tires on imported vehicles (like Jaguar, BMW, Mercedes-Benz, Porsche, Volvo, Saab and Audi) coming into the U.S. At this moment, we are talking to all of the Detroit companies and most of the transplants.
MTD: Will you be offering your Eufori@ run-flat to the independent tire dealer network? Is the Eufori@ associated in any way with Michelin's PAX run-flat system? After all, you are partnering with Michelin on the project.
Mannino: As you know, Eufori@ fits the Mini Cooper S with a 17-inch tire. Some of these cars are (coming) to the U.S., so we are bringing in sufficient
inventory, which will be offered through our dealer network for their
replacement requirements.
Eufori@ is not associated with the PAX run-flat system. It was developed in our R&D department in Milan. We also will be able to make Eufori@ in Rome, Ga.
MTD: In Milan, both you and Francesco Gori, general manager of Pirelli SpA's tire division, said Pirelli Tire North America is focused on the independent tire dealer distribution channel. Do you sell tires through any other distribution channels?
Mannino: We are focusing our efforts on the independent dealer channel. Sears still has the opportunity to special order Pirelli tires, although this activity is marginal. We do not have any relationship with the warehouse clubs or other mass merchandisers.
MTD: Where will your growth come from?
Mannino: Our growth is based on: 1). OE presence, both in domestic and imported high performance/luxurious cars. Our Detroit office, with the help of our R&D in Rome, Ga., and Milan, is working very effectively to position Pirelli in the OE market. 2). New Products will be continuously launched to maintain our leadership in the high-end segments of car and SUV tires.
3). MIRS will be a key element of our strategy. We are going to make HP/UHP product specific to the U.S. market, and we will exploit the flexibility and the quality coming out of this production system. 4). Communication. We will continue our advertising campaign supporting our brand with... a renewed commitment to racing, having signed recently a sponsorship contract with Road Atlanta and Don Panoz.
MTD: What are you doing to help independent tire dealers?
Mannino: The dealers who are associated and the ones that are going to be associated with us will be able to offer to their customers superior products and a brand with a very high awareness. Recently, this has become a very important feature.
Last but not least, our dealers make money selling Pirelli. To make sure that our dealers are up-to-date in our product offerings, we are making product training a priority.
MTD: Thank you, Guy.
