Despite operating in the worst climate for commercial tires in many years, Service Tire Truck Centers (STTC) is moving forward.
The 26-outlet, Bethlehem, Pa.-based commercial tire dealership (#17 on our Top 100 retreaders list) opened a new, 85,000-square-foot retread plant/service center in York, Pa., in early February.
The Michelin Retread Technologies Inc. facility represents a $2.5 million to $3 million investment, says STTC co-owner Walt Dealtrey Jr.
“The decision to do this was made before the economy faltered, but I still think it was the right thing to do in the long term.”
STTC already had a plant in York, as well as a plant in Bethlehem and another in Millville, N.J.
“We wanted another full service support facility,” says Dealtrey.
He and his management team considered expanding the York facility, “but after looking at our options and realizing we had a good work force in York, we decided to keep it there.”
However, due to rising demand for retreads, they realized they needed a bigger plant.
They found a larger building in York, moved some old equipment into it and added several new machines, including a chamber, a buffer and other items.
The new plant also gave STTC an opportunity to implement several efficiencies that the previous York facility lacked, including:
1. Motion-activated lighting. When STTC bought the new building in York, it was illuminated — barely — with old, inefficient yellow lights, says Dealtrey. STTC replaced those lights with high-efficiency, fluorescent tubes that are activated by motion sensors. “When you walk under them, they turn on, and 15 minutes later, they turn off.”
2. State-of-the-art compressors. “We needed to add capacity. Our old compressors were 75 hp and we needed 250 hp. We also installed a variable frequency drive to each compressor. When electricity costs 12 cents per kilowatt, the payback is relatively quick.”
3. Special plant floor coating. “It’s a finishing process that polishes the concrete,” Dealtrey explains. “It never loses its finish and there’s nothing to chip off.” The floor’s enhanced appearance appeals to both employees and customers who visit the shop. “There was no real need to do it, but it adds value.”
STTC encourages its salespeople to take both existing customers and prospects on plant tours. “We’re happy to show people our plants anytime.”
Hub and spoke system
Bethlehem is STTC’s largest retread producer, averaging 325 units per day and climbing to 400 on occasion. The company’s Millville plant cranks out about 150 units per day. The new plant in York has the capacity to produce 300 units per day.
STTC uses a “hub and spoke” system for retread distribution, according to Dealtrey. In other words, retreads made at each plant are destined for different geographic zones. Most of the units built at York will go to customers in Maryland and Virginia.
The retread business was “great” through last September, he says. “Then in the fourth quarter things fell off. Construction fell off, contractors parked and began selling their equipment, shipping fell off — all of those things happened.”
Dealtrey says demand for retreads is less-than-stellar at the moment, but business should rebound later in the year because “nobody’s buying new trucks. It’s just the fact there are older trucks out there.”
This shift could put STTC in an enviable position, he notes, thanks in no small part to the dealership’s additional retread capacity. The new York plant “will serve us for many, many years in the future. There’s no reason to look back.” ■
Wheel-ly resilient: Powder coating remains popular service
Among other services, Service Tire Truck Centers’ (STTC) new facility in York, Pa., offers wheel powder coating. The dealership’s system contains an automatic phosphate dip tank, a high-efficiency curing oven and other features.
Wheel refurbishing appears to be a recession-proof service, according to STTC co-owner Walt Dealtrey Jr. “Surprisingly, it hasn’t dropped off. Fleets continue to do it. Even in this down economy, they realize the value of appearance and safety inspection issues. They want to do it.”