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Short GM strike will have minimal impact on tire industry, says Ludwig

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Some 73,000 members of the United Auto Workers at 80 General Motors Corp. plants throughout the U.S. went on strike yesterday. How much of an impact will the strike have on GM's tire suppliers? Not much if the strike only lasts for a couple of weeks, says tire industry analyst and long-time Modern Tire Dealer contributor Saul Ludwig.

"If the strike is short, I don’t think that will have much of a notable impact," says Ludwig.

"However, if it becomes a protracted strike, the industry will begin to build excess capacity and when there is excess capacity, it could threaten the strong pricing environment that manufacturers have enjoyed. But the strike would have to go on for quite some time – (more than) four weeks,” he estimates.

Goodyear Tire & Rubber Co. is GM's largest light vehicle tire supplier with 30% share for its Goodyear brand, according to Modern Tire Dealer data.

The Bridgestone brand can be found on 27% of GM's light vehicles straight out of the factory. Continental Tire North America Inc.'s Continental and General brands make up 16% and 8%, respectively.

Six percent of GM light vehicles come with Firestone brand tires, while 5% are outfitted with BFGoodrich brand tires. Three percent come with Michelin products, 2% with Pirelli, another 2% with Uniroyal and 1% with Hankook.

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