Staying ahead of the curve: Retreading is a vital part of Central Tire's success. And Terry Westhafer plans to keep it that way
Central Tire Corp. President Terry Westhafer likes to stay ahead of the retreading curve. He manufactures stock truck tire retreads during the slow winter months so he has inventory to service fleet customers during the busy summer months.
He produces precure and mold cure retreads in order to take advantage of both processes. He also wholesales 50% of his unit volume to commercial tire dealers.
Westhafer's retread plant in Verona, Va., manufactures 161 truck tire retreads a day, five days a week. Although he also offers Goodyear and Dunlop new truck tires and commercial service, "a lot of our commercial growth has been based upon the retreads that we offer."
On their own terms
"We buy casings heavily during the winter months to produce stock cap and casings for sale in the summer," says Westhafer, who joined his father, Gus, in the business full-time in 1969. "It keeps the cost per tire down by leveling out production. We literally stay busy year round."
Casing supply is not a problem -- at least for now, he says. "We anticipate our orders well in advance. We have two suppliers who we've dealt with for many years, one of them (Central Marketing Inc. in Colonial Heights, Va.) for almost 20 years. They know what we will take and what we won't.
"We're very picky. They know our levels of acceptance." (R.W. Smith Import/Export Inc. in Harrisburg, Pa., is the other primary casing supplier.) Central Tire is a Goodyear authorized precure retreader and, since 1993, an AcuTread mold cure retreader. "We consider the AcuTread to be our premium process." Westhafer has the capacity to mix his own tread rubber; however, it's more economical to buy rubber mixed to his specifications from Goodyear. "You can't get the raw materials anymore. They're just not available in the form we need to buy them."
To be competitive, Westhafer believes in differentiation and niche marketing. "When you manufacture the product yourself, you can differentiate it," he says. "We can make whatever we want as far as retread designs and special widths."
One LTL account, Wilson Trucking, is very particular about its retreads. "They are meticulous with maintenance, and we actually deliver tires by brand and tread design in matched sets. They have fewer problems than any fleet I've ever seen. When their casings come to me, the quality is suburb because of their maintenance."
Another account buys 400 size 245/70R19.5 precure retreads a year. Because of the long run, Westhafer is trying to switch the account over to mold cure retreads, in part to help the fleet save money. "We are looking for niches we can capitalize on all the time."
Conservative by nature, Westhafer nonetheless continues to add presses, molds and products. He recently opened a second commercial branch in Richmond, Va., which has increased his marketing reach. "I was a bit anal about running an operation I couldn't see," he says. "It's a learning experience."
Thanks to the new truck tire shortage, high fuel costs and escalating insurance and other operating costs, the retread market looks to be strong in the near future, according to Westhafer. "We see retreading coming back, probably starting with trailer positions because trailer tires are the (scarcest) of new tires.
"If you can't get new tires, retreads become an option."
Retreading's future: Westhafer weighs in on four key issues
In 1969, there were more than 10,000 active retread plants in the United States. In 2004, there were less than 1,000, according to Modern Tire Dealer.
What will happen to retreading in the 21st century? And what can retreaders do to remain profitable? At the 2004 Clemson University Tire Industry Conference, Terry Westhafer, president of Central Tire Corp., addressed some of the issues affecting the retreading industry. Here are some of his insights excerpted from that presentation.
1. National account business: "National account programs will become more prevalent as the tire manufacturers seek to gain more control over the channels of distribution."
There are two essential elements that Westhafer said must be mastered if retreaders expect to be successful with national account business. "First, retread production and distribution costs must be as low as possible. And second, retreaders must maintain levels of product quality and service reliability that are expected by the national account customer."
2. Low-priced new tires: "(Imported) low-priced new tires will continue to increase their share of the price-sensitive segment of the market normally occupied by retreads and low-priced new tires. While this poses a long-term threat to retreading, the dynamics of supply and demand should provide some relief by lowering the market value of retreadable casings."
3. ISO Certification for retread plants: "Bandag is an advocate of ISO Certification and is aggressively encouraging their retreaders to become certified. Bandag's success in affecting change to bid specifications and purchasing preferences will determine whether or when the rest of the retread industry follows their lead."
4. Government testing: "NHTSA (National Highway Traffic Safety Administration)... initiated a program to assess the performance and safety levels of retreaded truck tires. An unfair, inaccurate, or misinterpreted test on a laboratory test wheel could do irreparable harm to the image of retreading. The seriousness of the issue and the perceived lack of knowledge of those responsible for setting the test parameters cause this to be the most significant threat facing the retread industry at this time."