World Tire Expo will continue in some form: Decision on format, name for 2007 event to be revealed soon
Tire Industry Association President Dick Gust called the 2005 World Tire Expo "a major educational event" for commercial dealers, retreaders and recyclers. Senior Vice President of Education and Technical Services Kevin Rohlwing simply called it "pretty successful." Immediate Past President Larry Morgan said, "We served our constituents well."
Based in part on better-than-expected attendance, the World Tire Expo (WTE) will live to see another day in some format. "The next event will be in 2007," said Dr. Roy Littlefield, executive vice president of the Tire Industry Association (TIA).
The proper format, possibly a switch to a more OTR Conference-like format, "is being talked about," said Gust. The popularity of this year's seminars "made us sit back and evaluate the exhibit area."
When asked if the event could be a regional show or series of regional shows, Rohlwing said he didn't know. A final location and date also need to be determined.
An estimated 1,541 people from 27 countries registered for the event. More than 110 companies exhibited on the trade show floor.
Seminars during the first day averaged 50 to 75 people, with standing room only in at least four of them, according to Rohlwing. Turnout for the seminars on day two of the expo was similar.
Mary Sikora, director of tire and rubber recycling for TIA, said attendance for the scrap tire seminars was "very good. We had one of the largest contingents of U.S. EPA and government officials to attend this show."
At the Summit
The first Commercial Tire Executive Summit was designed for senior management and decision makers. According to TIA figures, 105 people attended the event.
Speakers focused on the present state of the commercial tire industry and forecasts for the near future. They included the following:
1. Bob Costello, chief economist and vice president of the American Trucking Associations. In his economic update on the motor carrier industry, Costello forecasted 3% to 3.5% growth in gross domestic product (GDP) in 2005 after 4.4% growth last year. "This year it's going to slow, primarily because consumer spending is going to slow," he said. But manufacturing will be robust, which is "very good news for the trucking industry." GDP, the broadest measure of the domestic economy, will grow at an annual rate of 3.3% through 2016 after adjusting for inflation.
The average annual increase in truck freight transportation tonnage will be 2.7% over the next six years; in 2010, trucking will account for 69% of all domestic freight transportation modal tonnage. Costello said the growth trend in truckload revenue per mile also is encouraging. In January, it was up 13.1% compared to January 2004. February growth also was in double digits.
Trucking capacity is tight because demand is outpacing it. New trucks are being purchased, but most of them are replacements. The costs associated with fuel, insurance premiums ("good luck getting insurance, let alone paying for it," he said) and financing also are increasing. "We expect capacity to remain tight for a while."
Drivers' wages -- the industry's largest cost -- don't compare favorably with wages in the manufacturing and construction industries and must rise, said Costello. At the same time, he predicted that growth in the labor force will slow and "is going to get worse." In the trucking industry, the number of new truck drivers needed, especially in the long-haul truckload segment, is expected to outgrow the supply of drivers.
Diesel fuel, the second highest expense, will not only increase in price, but also may be in greater demand if SUVs with diesel engines are needed to meet CAFE (Corporate Average Fuel Economy) regulations, he added.
2. Dr. Roy Littlefield, executive vice president of the Tire Industry Association (TIA). "The role of the independent tire dealer has probably never been more important than it is today," he said. But competition has never been tougher -- not only for commercial tire dealers but also for domestic tire manufacturers.
"Whether we like it or not, all industries have had to face up to the fact that we are in a fierce and bitter battle that now spans beyond state borders and even national borders.
"The survivors will be those who can adapt to this changing environment. And that means an emphasis on re-focusing on consumers and offering the very highest quality products and services.
"This industry must be profit-driven on all levels," said Littlefield. "Dealers have learned they cannot live alone. Their well-being is dependent on the well-being of some of the world's largest companies and the well-being of distant nations.
"The greater the value that the industry creates together, the more competitive we're going to be in the marketplace."
3. Tom Dattilo, chairman, CEO and president, Cooper Tire & Rubber Co. He said the commercial tire market is changing significantly. "Imports continue to increase. About 47% of truck tires sold are imported." Seventy-five-percent of truck tires brought into the United States are shipped from Japan, China, Canada, South Korea and Germany, according to Dattilo.
"The continuing increase of imports and the challenges you have to deal with from your perspective as buyers and sellers of product ... is a big issue.
"Commercial truck tires today are undergoing the same transformation as light vehicle tires," he said. "As manufacturers continually fine-tune products, there's a trend toward more product differentiation or proliferation to optimize tire performance for specific applications. In some cases, there are new sizes but more likely, this means different tread patterns or compounds.
"Tire rolling resistance is certainly going to become a higher priority with higher fuel prices and regulatory mandates to use cleaner (truck) engines."
4. Martin Carver, chairman and CEO of Bandag Inc. Carver's comments will be covered in the June Commercial Tire Dealer section of MTD.
Finding a balance
Dealers weren't hesitant about bringing their concerns to the attention of tiremakers at the Commercial Tire Executive Summit. A panel of truck tire executives from Bridgestone Firestone North American Tire LLC (BFNT), Continental Tire North America Inc., Cooper, Goodyear Tire & Rubber Co. and Michelin North America Inc. fielded questions from dealers during the event.
Pete Gerry, president of Orange, Mass.-based Pete's Tire Barns, wondered why manufacturers don't promote truck tire and wheel balancing more.
"I'm not sure we aren't supporting the concept of a properly balanced tire," said Marc Lafferiere, director of North American sales, commercial truck and bus tires, Michelin Americas Truck Tires. "Whether or not we're going to say that tires can't be put on a truck without being systematically balanced is a different question.
"But you can prove to your customer that there's value in doing proper balancing. Most customers need to see it to believe it. I think depending on the manufacturers to solve profitability (problems) is a little bit like depending on the government to solve (an) economic downturn."
Donn Kramer, Goodyear's director of commercial tire marketing, told Gerry that more educational material about balancing from tiremakers might be beneficial.
"Profitability is a collaborative effort between the dealer and the manufacturer," said Art Campagnoni, BFNT's director of North American sales, commercial truck and bus tires.
"We can't dictate profitability as a manufacturer. But by providing as many tools as we can, we will enable our dealer base to sell (more) tires and get a representative price for them."
Fisher spells (out) TIRES
Peggy Fisher, president of Fleet Tire Consulting and incoming TIA president, used the Summit to pitch the association's new check-off program, TIRES (Tire Initiative for Research, Education & Safety). The initiative is sorely needed, she said.
The courts are swamped with product liability lawsuits because a significant number of consumers drive on under-inflated, even bald, tires. "The small independent tire dealer is fast becoming an endangered species."
Check-off programs are research and promotion programs, according to Fisher. "The industry obtains permission from legislation to charge a fee on its products that is passed on to consumers."
TIA's proposed TIRES program will not include generic consumer advertising (other check-off programs are facing constitutional challenges because they allow such advertising). It will focus on:
1. Consumer education.
2. Sales, technical and managerial training programs. "What if these training programs were free, or very little cost to you?" she asked.
3. Research and development. Information learned can be used, for example, in a consumer education campaign. It also could help the industry be pro-active in addressing the tire aging issue.
Fisher said the average price of an 11R24.5 truck tire is the same today, $300, than it was in 1974. Government statistics since 1981 say the average passenger tire price has declined 7%, while truck tire prices have plummeted 24%.
If we don't do anything, the motoring public's disregard for maintenance and disrespect for tires will be the same 30 years from now, she said. "This is an investment we are making in our industry."
Pete Gerry, president of Pete's Tire Barns, asked representatives from five tire manufacturers why they don't promote truck tire and wheel balancing more.
Supply appears tight: Dealers speak out on casing availability
Truck tire casings are in short supply, according to Norm Ball, director of franchise management services for Michelin Retread Technologies Inc.
During the Tire Retread Information Bureau (TRIB) membership meeting at the World Tire Expo, Ball told attendees it was a major problem. Searching for possible solutions, Modern Tire Dealer canvassed the WTE trade show floor, and asked independent retreaders two questions: Is casing supply a problem? If so, how do you get casings? Here are their answers.
Bob Majewski, president and COO, Sumerel Tire Service Inc., Newport, Ky.: "Yes. We get them by visiting our dealers and trucking companies that don't retread... and calling tire suppliers. We are trying to buy as many as we can. We pay a higher price and still can't get enough."
Tom Raben, president, Raben Tire Co. Inc., Evansville, Ind.: "Except for (radial) low-pro 24.5, we see the casing supply as pretty tight among the major brand casings. Michelin, Goodyear, Bridgestone -- the preference for these casings makes (them) harder to get. We have certain customers who specify major brands. We're buying casings from whatever sources are out there -- casing people, customers. We're trying to source through our stores and our customers. We're not buying (very much) from overseas."
Michael Roefs, sales manager, Ranger Tire, Long Island, N.Y.: "I haven't had that problem yet, but I expect a shortage by the end of the year. We used to buy a lot from Japan, but with the dollar going down, it's hard to get casings at a good price. We used to bring in a lot from Canada. Now the Canadians are calling us for casings."
Jeff Lecklider, owner, Gem City Tire, Dayton, Ohio: "Absolutely. What we see are a lot of people running their tires longer so the quality of casings has suffered. There's a big demand for low-profile 22.5. We lose sales every month because we can't get casings. It's tough. But over the years we've worked hard at getting reliable vendors."
Michael Coats, purchasing manager, I.T.R. Inc., Jacksonville, Ill.: "Yeah, it's a tight market right now in low-profile 22.5s. I've heard predictions that the casing market will free up over the next few months."
Tom Ridgeway, outside sales representative, Fleet Tire Retreading Inc., Pottsville, Ark.: "Certain sizes are tight, like 11R22.5 and 11R24.5. Most larger fleets are going with low-profile 22.5s. We have independent business people who bring (casings) to us. They do the legwork."
Terry Westhafer, president, Central Tire Corp., Verona, Va.: "Today, no. We anticipate our orders well in advance. We have two suppliers who we've dealt with for many years, one of them over 20 years. They know what we will take and what we won't. We're very picky. They know our levels of acceptance."
In case you need casings, check out TRIB. "We're the biggest casing clearing house in the world," said Managing Director Harvey Brodsky.