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Dealer of the Year: Charlie Creighton

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Dealer of the Year: Charlie Creighton

The year was 1976 and Charlie Creighton was on a roll. Creighton, then 32, was working in the forestry equipment industry, selling machines for one of North Carolina's leading Caterpillar dealerships.

He already had established himself as one of the firm's top salesmen with a knack for closing huge deals, including a $21 million order from a single customer. Selling tires had never crossed his mind.

Thirty-one years later, Charlie Creighton is the CEO of Colony Tire Corp., one of the country's largest regional dealerships with 40 locations throughout North Carolina and Virginia and 2006 revenue in excess of $100 million. He also is Modern Tire Dealer magazine's 2007 Tire Dealer of the Year.

How Creighton went from a forestry equipment salesman to one of the most successful and widely respected tire dealers in North America is a testament to his work ethic, his uncanny ability to seize opportunities that others have missed, and a quiet, understated confidence.

"I don't think I've ever looked back," he says. The 500 individuals he employs, the thousands of customers Colony Tire has served, and the tire industry itself are all better for it.

Risk taker

"You must not have received very many entries," Creighton quipped when he was told he had been voted Tire Dealer of the Year.

He said it with a smile on his face. Beneath the self-deprecating sense of humor, say colleagues, is a man who knows he's good at what he does.

Creighton is quick to attribute Colony Tire's success to the people who work for him. But there would be no Colony Tire if he hadn't made a series of tough choices some 30 years ago.

The first decision came in late 1976, when Creighton left the Caterpillar dealership to go into business with a friend named George Wood.

The pair bought a small petroleum distributor in Edenton, N.C., now Colony Tire's home base. The business included a couple of tanks, a truck and a lot of opportunity.

"The American dream is to be in business for yourself," says Creighton. But the decision was still difficult.

"It was a big challenge to leave a good job where you were making good money and start driving a tanker truck. It took my wife 15 years to get over me quitting. I had a nice job and all of a sudden I was selling kerosene."

The new venture was called Creywood Oil Co. "We built these little dollar bill pumps across the area, usually on the edge of a cornfield. You'd drive up, stick a dollar bill in and get some gasoline.

"There were a lot of days when we were out of money. I knew how long it took for a check to go anywhere in the country! I'd send one out and then have to scramble to cover it."

Creighton and his partner kept at it, and business began to improve. They bought a second petroleum company in a nearby town in 1979.

The pair began looking for ways to diversify. In 1980, BP Oil talked them into adding Goodyear tires. Creywood Oil sold its first tire on Christmas Eve 1980. Creighton still remembers the customer: a local fisherman.

Neither Creighton or Wood, who was more of a silent partner, had experience selling tires. "There was a Goodyear store in Edenton that had closed and Goodyear wanted to rent it to us for $700 a month. We were scared to do it. So we built this little tin building onto our oil warehouse. That became our tire store."

Goodyear was Craywood Oil's only tire brand in those days. "You were required to be exclusive. It was expected."

Creighton bought out Wood's stock in 1980. Creywood continued to sell oil until 1987, when that part of the business was sold. "The oil business and the tire business have always been thought of as similar businesses, but they aren't very similar at all. You make 20%, 30% or 40% gross profit on tires and far, far less on oil. We couldn't even run the same profit and loss statement."

It was time to focus on tires.

Learning curve

Creighton admits he had a hard time adjusting to being out of the petroleum business.

"The first morning after the sale I looked over at my old oil tanks and said, 'How could they open up without me?'"

He couldn't afford to ruminate for too long. Developing the tire business required time and concentration. He already had begun to build his staff. In 1979, he hired Chauncey Krahenbill, an old friend from Virginia, and Doug Hodges, who came with the second oil company. (Both are still with the company. Krahenbill is a partner, vice president and manages Colony Tire's commercial tire division; Hodges is now an executive vice president and runs one of the company's Mighty Auto Parts franchises.)

Creighton's duties included "everything and anything -- selling, putting on tires, loading trucks, you name it. One of my biggest responsibilities was figuring out how to get enough money to cover the checks I mailed out the previous day."

Looking back, he says the learning curve was steep, "but I don't think we knew how steep it was at the time. We lived from day to day."

Within a few years the company was up to three stores. In 1982, Creighton bought his fourth store, a small tire shop in Williamston, N.C. It burned down 100 days after he bought it.

He didn't have enough insurance to cover the loss and his bank wouldn't loan him enough money to build a new outlet. "I found a savings and loan that loaned me the money to rebuild in a better location. We then built a retread plant next to our original store in Edenton."

Meanwhile, the market was changing. Customers, especially at the retail level, wanted more choices. Goodyear remained Creywood's top-shelf brand "but we made the decision that we had to have a less expensive line of tires."

Creighton added Mastercraft, manufactured by Cooper Tire & Rubber Co., as a second-tier line in the 1980s. "There are a lot of low-income people in our rural markets. We felt we needed a more economically priced tire to sell them, and it worked."

Creighton continued to add personnel. His son, Scott, joined the company in 1990. Goodyear had offered Scott a job after graduation, but he decided to work in the family business. (Scott was named president of Colony Tire last year and is another partner in the dealership. Rounding out the company's owners is Charlie's son-in-law, Andrew Bergeron, who joined Colony Tire in 1995.)

Opportunities in the form of new locations continued to present themselves, but the dealership had no "five-year plan," according to the elder Creighton.

"We've never said that on January 1 we're going to open two new stores or we're going to buy three stores next year. I'm not advocating that as the right way to do it. That's just how we've done it."

In 1991, the company changed its name to Colony Tire. Up to this point, most of the firm’s stores were in small towns or rural areas. Creighton wanted to push into larger markets. He chose Raleigh, N.C., and opened a truck tire center there in 1992.

It was another learning experience. "I thought all you had to do in Raleigh was open up and they'd be standing there waiting for you. I was wrong. It costs so much more money to do business in Raleigh. The cost of land and personnel is much higher. The cost of congestion is much higher.

"Getting in a service truck and going 15 miles to fix someone's flat is easy in Edenton; it's hard in Raleigh. It was a big struggle to turn Raleigh into a profitable area for us."

Colony Tire now has eight stores in the greater Raleigh area. "Raleigh is like another world. We had to adjust how we did everything there."

"We're a thousand times better than we used to be," says Scott. "Those stores are doing well and are making a lot of money."

The dealership also moved into larger markets like Richmond, Va., and the Chesapeake, Va., area.

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Bigger and better

On the retail side, Colony Tire has added outlets through acquisitions and new construction. Each method presents its own challenges. (Colony Tire's retail tire sales-to-automotive service ratio is roughly 50-50.)

"Some acquisitions have been good, but in some we've inherited a lot of bad will," says Creighton. "It's taken a lot of work to eliminate that.

"We bought a store just south of Raleigh with lots of traffic and a good location. There wasn't any question that the store was going to do well. But it had been operated for 10 years by a man who had a lot of bad press. I didn't think we'd ever turn it around."

But Creighton and his staff persevered and managed to restore relations with customers. "Word-of-mouth is what put that store in the hole and word-of-mouth is what pulled it out of the hole."

Building new stores is challenging due to the high cost of zoning, construction and in many cases, wading through endless red tape, especially in larger markets.

"In places like Raleigh, they have so many restrictions you almost shudder thinking about it. You need a building permit, you need a plumbing permit, you need a certificate of occupancy. One time we wanted to build a store and had a hard time getting a building permit, so we literally snuck into the building inspector's office, and when he came walking by we talked to him!

"You can build a million-dollar store and there will be another $100,000 in red tape expense," he sighs. "It's the cost of getting all of the bureaucracy to say 'yes.'"

Tire shops aren't always embraced by communities, says Creighton. "Sometimes they're not sure they want a tire store. Maybe they've had ugly stores in the past or maybe there have been used tires outside... it's a negative image."

It can take up to two years to open a store. "Smaller markets are theoretically easier," but regulations, even in small towns, are always changing.

Colony Tire relies on direct mail to lure customers to its new retail stores.

"If we're going into a brand new town where nobody has ever heard of us, we also use TV and radio. Overall, we're spending $2 million a year in advertising, $1 million of that in electronic media."

The dealership also distributes wallet cards offering discounts on transmission system flushes, coolant system flushes and other services, in addition to free oil changes, alignment checks and tire rotations.

"We sell them for $10," often to major area employers who, in turn, hand them out to their employees, says Creighton. "We've been doing it for years. Some of my store managers don't embrace the idea as much as I do, because they say all a person will do is a free oil change. I say, 'Sooner or later that customer has to do something different. What you have to do is be nice and charming during that oil change, and he or she will be back.'"

Evolution of a company

Colony Tire now has 40 locations throughout two states. Creighton's responsibilities have evolved along with his business. He does more office work than field work, but selling remains his first passion.

"I'm glad we've done what we've done, but at the same time there's nothing more fun than being behind the sales counter and meeting the customer's needs."

Scott Creighton, Bergeron, Krahenbill and others have taken on additional duties. "Scott started as a manager trainee. Chauncey started out changing tires. Andrew came in to be our financial person, but he trained in the stores for a good while before he went to the office. They've all grown into more management.

"Scott is far superior to me in a number of tire-related subjects. Andrew is far superior to me in computers and accounting. Chauncey is superior to the rest of us in OTR tire knowledge. I've been lucky in that they've brought something new to the party. They have their own ideas and positions and have made huge contributions to our growth."

By the early '90s, Colony Tire had a retail division, a commercial division and a busy retread plant. Opportunity soon beckoned again -- this time at the wholesale level.

Colony Tire began wholesaling to smaller tire dealers. "We'd go to one of our stores and somebody next door would need a tire. I thought, 'Why not sell it to him?'"

It didn't take long to figure out that wholesaling tires under the Colony Tire name would be an awkward proposition. Creighton quickly came up with a new name for his wholesale unit: Atlantic Tire Distributors. "Resellers don't want Colony Tire backing up to their doors, particularly in towns where there are Colony stores."

The wholesale business, he says, is much different than retail or commercial. "We'll gladly sell to anyone who will hopefully pay us. When you charge to resellers, some aren't as quick (as customers in other segments) to pay. It's not a fool-proof business by any means."

Atlantic Tire Distributors has three warehouses: one in Edenton (which runs nine delivery trucks), one in suburban Raleigh (five trucks), and another in Colonial Heights, Va. (two trucks).

Creighton openly admits Atlantic is still working out some kinks, but he's happy with the division's progress. Putting the right leadership in place has been critical.

"We've come a long way," says Harold Strakusek, Atlantic's general manager, who started with the unit 11 months ago. "We have something for everybody."

Sudden loss

Creighton's associates and colleagues say you would be hard-pressed to find a more astute businessman in any profession.

"He's very shrewd," says Bob Smith, former executive director of the North Carolina Tire Dealers and Retreaders Association. (Creighton was president of the group in 1989, has served on its board and remains active in the association.)

"Charlie can ask more questions than a three-year-old. He's extremely inquisitive and is always looking for ways to improve."

His ability to react quickly to market developments is another valuable attribute, according to Smith. Creighton doesn't disagree with that assessment.

"When Ford and Firestone had their first recall, we bought all of the available replacement sizes from Goodyear three days before the recall was announced."

He had been following news reports leading up to the announcement. "We guessed that it was going to happen and figured if it didn't happen, we could cancel the order. The same thing happened when the second recall occurred; we placed an order three days ahead of time."

Then the unexpected happened, he says. Goodyear canceled the order. "They found three trucks that were on their way to deliver the tires and called them back to give the tires to Ford. Ford was doing the recall and they let Ford dictate where the tires went.

"But Ford had become good friends with us during the first recall. They insisted that all the tires for our area come through us. Goodyear wanted to send the tires to their company-owned stores. Ford said, 'We're not going to get them through your company-owned stores. We want to get them through Colony.'"

Colony Tire gradually added tire brands over the years, but Goodyear remained its main line.

Its relationship with Goodyear came to an abrupt end in September 2005 when, according to Creighton, the Akron, Ohio-based tire manufacturer "canceled" them. Colony Tire, unhappy with Goodyear's retread system, had signed on with Bandag.

Creighton says he didn't know that he wouldn't be able to sell Goodyear products if he switched to another retread system. It was a tough blow -- and a surprising one.

"Goodyear was a good partner. I told them -- and I believe it to this day -- had they told us before we signed with Bandag that we would not be able to be a Goodyear dealer, then I think we would have continued making retreads with the Goodyear system or we would have just bought retreads from somewhere else."

Scott Creighton, Bergeron -- who also serves as Colony Tire's executive vice president -- and Krahenbill also were at the meeting with Goodyear, which was held at Goodyear headquarters. On the flight home, they began strategizing.

"Immediately when we got back to Edenton we lined up meetings with other suppliers and contacts, and by the end of the year, we had new programs in place," says Bergeron.

"Charlie is extremely confident. We knew the Colony name was strong enough that we could convince most of our customers to switch over to someone else." The process wasn't easy, Creighton openly admits. "We were Goodyear blue for so long it really took awhile for us to come to grips with not waking up every morning and planning to do something for Goodyear. In the past, we would need to hit numbers and we would do that even when it wasn't necessarily the best decision for Colony."

Since then, Colony Tire has worked vigorously to build its own name instead of hitching its business to any one manufacturer.

"Right here in Edenton, people used to say, 'Go to the Goodyear store.' Now everybody says, 'Go to the Colony store,'" says Bergeron. "Our primary push going forward is to be Colony Tire."

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'Full authority'

Overall, Creighton describes Colony Tire's relations with its suppliers as "excellent. We've had days where we're irritated by some of the programs they try to push on us, but we've had a 19-year marriage with Cooper that's been superb, we've had a 10-year marriage with Toyo that's been superb, and we have new love affairs going on with Michelin, Continental and various others."

Tire manufacturers often talk about what they expect from distributors and dealers, but suppliers also have obligations to their customers, he says.

This includes providing quality products at what Creighton calls "proper market prices. I don't care what I pay for a tire; I like to sell it for a profit. If I'm paying $100 for a tire from Michelin and other dealers are paying $100 and selling it for $110, that's not Michelin's fault. But if I'm paying $100 and selling it for $110 because my competitors are paying $80 and selling for $110, then Michelin has to help me."

He and his partners have discovered that discounts are harder to negotiate than in the past. "We understand that tire manufacturers need to recover the pricing they have in place because they're having plenty of struggles with raw material costs and the erosion of their volume from overseas. Therefore, getting them to discount prices is more difficult today. There used to be more room for negotiation."

The establishment of a multi-brand strategy with products segmented not just by price but by business unit has worked well for Colony Tire. "One of the things Goodyear used to preach is that having too many brands costs more in inventory and causes too much confusion at the counter. By and large, they're right. We have some brands we tend to just retail and some we tend to just wholesale."

Colony Tire sells Mastercraft, Cooper, Toyo, Michelin, BFGoodrich, Uniroyal, Falken, Continental, General, Kumho and Goodride brand tires at both the retail and wholesale levels. The Cordovan brand is its wholesale-only brand.

The dealership does not dictate prices to its retail stores. "We do not insist that our managers sell tires for $89. They sell it for whatever they want. They know what the cost is. We think the motivation to sell it for the right price is that we pay them based on net profit. So if they're selling the tire cheap, they're not making any money.

"We don't call our managers and ask why they're not following our price matrix. We call and ask them why they didn't make a profit. We empower them to run their stores with full authority; that includes selling a tire that costs $50 for $49 if that's what they think they have to do. But at the end of the month, if they haven't made a profit that's when we have face-to-face meetings."

An underperforming store can "almost always" be traced to personnel issues, says Creighton. "You might be able to find a place where the best manager in the country can't make a living, but most of the time the right management will make a store successful... pricing the tire correctly, giving the proper customer service and selling the customer everything he needs instead of half of what he needs."

Since most of his stores handle multiple types of tires, Creighton has installed separate consumer tire and commercial tire managers at many of them.

"It's very hard to find a manager who can do a good job at both," he says. "A lot of times if he's good in retail, he's not good in commercial. It's hard to understand the consumer and commercial sides of the business at the same time."

Of course, the division of labor has to make sense from an income generation standpoint. "If you're only doing $30,000 worth of consumer each month, you can't afford to have a consumer-only manager. But if you're doing $130,000 a month in consumer and $275,000 a month in commercial, you've got to have two people. I wish we could find managers who can do it all -- and in some cases we have -- but as a general rule, it takes two different individuals."

"He never wants to make his people do something," says Scott Creighton of his father. "He wants to include them in the decision-making. He's not dictatorial at all. He gives his employees an awful lot of authority, and I think that's helped him be very successful.

"He inspires people. He has a great ability to motivate the people who work under him to want to do things for him and enjoy what they're doing."

Profit opportunities

Competition in Colony Tire's markets is intensifying due to an influx of large national chains. In its early days, the company dealt primarily with other independent tire dealerships and tire manufacturer-owned stores. Now its rivals include operations like Discount Tire Co. Inc. and Goodyear-owned Just Tires.

"And every town we're in still has an excellent independent tire dealer. They're always strong competitors because they own the business themselves and do a good job."

On the commercial side, Creighton cites Greensboro, N.C.-based Snider Tire Co., Michelin-owned Tire Centers LLC and Goodyear's Wingfoot Commercial Systems LLC as particularly fierce competitors.

Following national trends, more car dealerships in Colony Tire's markets are heavily pushing passenger and light truck tires. Creighton decided his company could make more money selling to car dealerships than against them. But he concedes that car dealerships are formidable rivals.

"They have a big advantage. They make money selling the car and they make money doing warranty work on the car; then it's tires and service. They've already made money selling the car and working on the car. Finally, when the non-warranty service is available, we're competing for it. When the replacement tire sale is available, we're competing for it.

"If they had to live on the same sources of profit we live on," he continues, "they would be an entirely different kind of competitor. If I could get everyone to stop selling to the car dealer and the car dealer couldn't get a tire, then I might consider doing the same. But he can get the tire. I might as well be the one to sell it to him."

Independent tire dealerships hold several advantages over car dealerships despite the latter group's additional revenue streams, according to Creighton. Number one, he says, are advancements in tire technology that tire dealers understand and are better equipped to sell. "When we had the bias-ply 195/75R14, they didn't have much appeal. Now there's a lot of glamour associated with high performance tires and off-road tires and SUV tires.

"I think tires are a little more important than they used to be. They last longer and just have more appeal. Take a V-rated Toyo Versado; that's not a commodity - that's the real thing."

However, more tires bring more sizes, which, he admits, are hard to track and inventory. "It's a constant study process of what's been sold and how many tires we didn't sell because we didn't have them."

Colony Tire constantly phases sizes in and out. "Phasing out is what's hard," he says. "Some sizes go out of style and you're just left with them."

Commercial tires, especially giant OTR tires, remain a big revenue generator for the company, according to Krahenbill, who runs its commercial unit.

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When the shortage of large OTR tires began several years ago, "we created a new company called Global Tyres to service mines worldwide." Global Tyres sources tires from Russia and the Ukraine and ships them all over the globe.

"We also developed an OTR retread supplier in Peru. We bring casings into our yard in Edenton, we ship them to Peru, they come back to us and we ship them to our customers. We also offer tire management programs for our OTR customers." Creighton believes the only way to stay on top of changing sizes and new technologies such as tire pressure monitoring systems is through constant training.

Colony Tire has a large training center next door to its corporate headquarters. And it also employs a dedicated vice president of training, Scott Anderson, who travels from store to store.

"He's exceptionally good at consumer tire training. We're working with him to put (programs) into classroom form."

Colony Tire is aggressive when it comes to trying new software. (Its current point-of-sale software provider is ASA Tire Systems.)

Creighton says he's always "second-guessing" what he's doing. He wants his employees to be just as critical of their own performance. "I don't think anybody should decide they're doing it perfectly. Our jobs need scrutiny every day. Once you decide you're doing it perfectly, that's probably the beginning of the end."

Community pillar

At 63, Creighton jokes that he's slowing down; he only works 60 hours a week. "What I'd like to do are only the fun things."

Earlier in his career, he admits he did "a poor, poor job" of balancing his professional life with his personal life. "I've been accused of being a workaholic. Over the last five to 10 years, I've been able to do more with my family."

Creighton also is finding more time to pursue hobbies like boating and fishing. (The biggest fish he ever caught was an 80-pound tuna. "I've never caught a marlin.")

He and his wife, Susan, have a house on North Carolina's Outer Banks, where they spend weekends with family, including two grandsons and four granddaughters, ages eight months through 10 years.

Family is important to Creighton, and he attributes much of his success to Susan. "She tolerates my work schedule, she tolerates me being late for this or that -- she tolerates a lot of things other wives wouldn't tolerate. She makes it easy for me to do what I need to do. She's also a tremendous volunteer in the community."

Both are extremely active in community affairs. "I've been president of the Edenton Chamber of Commerce, the Rotary Club, and the Lion's Club. I'm involved in my church, St. Paul's Episcopal."

Creighton's philanthropy extends beyond Edenton. In early 2002, he and Susan spent a week in New York City near Ground Zero serving food to World Trade Center rescue workers. "We chose the night shift because it was a harder shift," he recalls. "It was a heck of an experience. You see these firefighters and construction workers crying... Sept. 11 was probably the worst thing that ever happened to this country."

Creighton also donated $50,000 to Hurricane Katrina relief efforts. "His nature is not to make a big to-do about his community involvement and charity participation," says Roland Vaughan, Edenton's mayor. "Charlie is a hard-driving businessman but also a very compassionate person who's always willing to reach out.

"He sees a need, and when he understands that need he's an above-average contributor to whatever the cause may be. I think that's part of his analytical nature."

Vaughan is particularly grateful for the positive economic impact Colony Tire has on Edenton, which has fewer than 6,000 residents. "Charlie could have located his headquarters in a lot of other places, probably in places more suitable than Edenton. But his heart is in this community."

As one of Edenton's top employers, "Colony Tire is a tremendous economic benefit."

Creighton plans to keep it that way. The company, he says, is in good shape. And if he has his way, he’ll get out and sell some more.

"Nothing ever happens until you sell something, and when you sell something a lot of things happen. I don't like the mean customers. I don't like customers who are unreasonable. But most of the people you deal with are wonderful folks, and if you do something for them they appreciate it.

"I've never had any illusions about the tire business being a glamorous business. When I was selling Caterpillar machines I never spent much time thinking that I wanted to be a tire dealer. When I was selling kerosene and diesel fuel I never thought I wanted to be a tire dealer."

What separates independent tire dealers from other businesspeople? "We make less money," he says with a laugh. "We work harder and get dirtier. You know, when I wasn't in the tire business it had no appeal to me. But once I got in it, I found that I loved it. It meets all of my needs.

"I don't want to be in the jewelry business. I don't want to be a lawyer. I'm not smart enough to be a doctor. The tire business has served me well and I'm delighted to be in it. I don't want to be anything else."

Creighton has been approached about selling his dealership -- in fact, several times within the last five years. Some of the offers were extremely lucrative.

"We've gone down the path with (a few interested parties) pretty far, but we didn't like their ideas and didn't go any further. We like working for ourselves."

Elite company: Creighton joins a 15-member club as Tire Dealer of the Year

Charlie Creighton is the 15th winner of Modern Tire Dealer's Tire Dealer of the Year award.

Donations totaling $1,000 have been made in Creighton's name to three charities of his choice:

The American Cancer Society, Chowan (N.C.) Hospital Foundation and Lawrence Academy, a private school near Colony Tire Corp.'s home base in Edenton, N.C. Creighton was selected by the following independent judges:

* Anne and Russ Evans of Hebron, Conn.-based tire importer/exporter Tyres 2000 Ltd.;

* Saul Ludwig, long-time author of MTD's Ludwig Report and a managing director with KeyBanc Capital Markets Inc. in Cleveland, Ohio;

* Dick Morgan, president of Morgan Marketing Solutions in Dallas, Texas.

The following is a list of past Tire Dealer of the Year award winners. All past Dealer of the Year stories can be found on www.moderntiredealer.com.

2006 -- Bill Williams, Jack Williams Tire Co.

2005 -- Paul Zurcher, Zurcher Tire Inc./Best-One Tire & Service

2004 -- Bob and Juanita Purcell, Purcell Tire & Rubber Co.

2003 -- John Marshall, Grismer Tire Co. Inc.

2002 -- Tom Raben, Raben Tire Co. Inc.

2001 -- Larry Morgan, Morgan Tire & Auto/Team Tires Plus Ltd.

2000 -- Les Schwab, Les Schwab Tire Centers

1999 -- Raynal Pearson, Pearson Tire Co.

1998 – Tom Gegax, Team Tires Plus Ltd.

1997 -- Walt Dealtrey Sr., Service Tire Truck Centers

1996 -- David Stringer, Stringer Tire Co.

1995 -- Tony Troilo, Rosson & Troilo Motor Co.

1994 -- Jerry Bauer, Bauer Built Inc.

1993 -- Barry Steinberg, Direct Tire & Auto Service

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