TIA president addresses controversial checkoff program: 'We believe there is a consensus this needs to be done,' says Morgan
The 2003 International Tire Expo (ITE) in Las Vegas was Larry Morgan's official coming out party. As the new president of the Tire Industry Association (TIA), Morgan will be responsible for keeping TIA's Strategic Plan moving forward.
Behind the scenes, however, Morgan has been involved in TIA business for the last few years. As chairman of the Strategic Planning Committee, he helped put together the plan, which focuses on improving training and education, increasing membership and making a difference on Capital Hill.
Perhaps his greatest challenge will be getting the industry to buy into TIA's proposed public relations or "checkoff" program. The proposal calls for tire dealers buying direct from the manufacturer to pay an additional 50 cents per passenger and light truck tire (the domestic marketing arms of overseas manufacturers will be required to pay the fee at customs, but will be reimbursed later).
The money collected -- more than $100 million annually based on projected domestic tire shipments -- would be used for public relations, educational and other industry-related activities. The fund would be controlled by an "alliance" of people representing the many segments of the industry.
Meetings with the Rubber Manufacturers Association during the ITE were positive, bringing the association one step closer to getting it passed into law.
Morgan summarized the checkoff program and its intent in his speech during the ITE's President's Breakfast.
"I'm very excited and hopeful that we can move ahead over the next year in developing, funding and implementing a coordinated, national program to promote consumer education, industry training, research and development," he said. "This program would augment existing consumer education programs by the Rubber Manufacturers Association, by the National Highway Traffic Safety Administration and TIA, and would also fund a variety of other industry programs.
"Our vision contemplates a multi-million dollar annual expenditure, without negative impact on you. Nothing of this magnitude has ever been contemplated or discussed before in our industry. Assuming our vision becomes reality, I guarantee you we will be the discussion of all industries in businesses in America."
Morgan said the association believes the tire industry needs the checkoff program to foster consumer education. "A national program would provide funding for industry efforts. It would also reflect positively on the entire industry by demonstrating the industry's commitment to ensuring safe tire use and product improvement through industry-funded research and development.
"We foresee an ongoing, multi-media campaign supported by many types of in-store communication tools backed by high-quality employee training and education. TIA's mission in this area is this: to coordinate and execute a public relations campaign dedicated to improve the public perception of the tire industry.
"Our hope is to organize a multi-year, industry-wide effort to increase the public's appreciation for tires and help the industry realize a statistical gain in consumer confidence and tire quality and value," he said. "We believe there is a consensus that this is an undertaking that needs to be done. It is also our objective to make the process as easy and cost-effective for us all to administer."
Morgan admits there are details yet to be worked out. In an exclusive interview with Morgan and TIA Executive Vice President Roy Littlefield, Modern Tire Dealer attempted to clarify the plan and the planning behind it.
Littlefield says the basic outline of the proposal, drafted by TIA, is "something to work from."
"We've tried to take this one step at a time and not worry about issues in the future that would pre-empt our efforts in the (initial stages)," says Morgan. "We wanted to make sure we had the RMA's support. We need to have industry support every step of the way."
Morgan says the creation of the "alliance" and who will manage it needs to be worked out. It also is undetermined how many people will make up "a workable board (of directors)," which will be made up of industry volunteers. He is sure of one thing: "We need complete representation across the board.... Do we hope TIA people will be on the alliance board? Absolutely."
Based on checkoff programs in other industries, the alliance has to be a newly created, "independent" group representing the entire industry. TIA, therefore, will not be involved in running the program, although it may benefit from it.
There are potential legal problems as well. Checkoff programs in the beef, dairy and pork industries are facing constitutional issues. The RMA also has had questions and problems. Littlefield said attorneys from TIA and RMA are looking over the proposal line by line. "That's a very positive thing -- to make sure we structure this so it's not challenged."
Another issue still on the table involves the proposed 50-cent fee per tire. "Is it the right number? We're not absolutely sure," said Morgan.
"Once we get everything worked out, we want to go to the industry and specifically give them the details," says Morgan. "We're not trying to railroad this through.
"If there are insurmountable objections, we will fold our cards and go home. But the potential gains are so great we (can't give up on it) without a gallant effort. Can it hurt to try it?"