Although the tight labor market is challenging their operations, the nation’s top commercial dealers are finding ways to stay ahead of changing customer needs.
“Our current largest threat is finding good people to work for us,” says Barry Schroeder, commercial director for Purcell Tire & Rubber Co., echoing a concern voiced by many respondents to Modern Tire Dealer’s annual survey.
Purcell Tire remains focused on improving its competitiveness. “We have invested in new equipment and service vehicles in most of our markets. We’ve updated and remodeled 30% of our locations and have four brand new relocations in the works now,” says Schroeder.
“We have also made many of our locations ‘blended’ stores. Our footprint of ‘just commercial’ locations has been greatly reduced and will continue through 2019.” Potosi, Mo.-based Purcell Tire holds the No. 5 spot in the Top 25 Commercial Tire Dealers ranking.
McCarthy Tire Service Inc. also cites employee recruitment and retention as a significant headwind. But the Wilkes-Barre, Pa.-based company continues to grow, adding outlets in Mount Joy, Pa., Philadelphia, Pa., and Albany, N.Y. In Horseheads, N.Y., the company moved commercial truck operations to a new facility less than a mile away and renovated an existing building into a retread plant. McCarthy Tire holds the No. 7 spot.
Deliver more value
Greensboro, N.C., based-Piedmont Truck Tires Inc. added a small truck service facility in Burlington, N.C., and a 67,000-square-foot commercial service center, showroom and retread plant in Murfreesboro, Tenn. The company purchased part of the assets of the former American Tire Co. retread plant in Murfreesboro in early 2018 as well as the building housing the plant and the service center. “It is one of the best-looking commercial centers out there,” says Dan Rice, president.
The Murfreesboro location is a full-service automotive repair, truck repair, and tire store. Six-drive through bays are each 100 feet long.
“We have to be able to deliver more value for the dollar. Everybody around us is getting better, so if we don’t get better we won’t make it,” says Rice.
The retread plant has six employees and produces 40 medium truck tire retreads a day with capacity for 200 retreads a day. The company also has a retread plant in Graham, N.C. Piedmont Truck Tires is a part of Continental Tire the Americas LLC’s ContiLifeCycle dealership network and carries Continental, General and Ameristeel truck tire brands.
Commercial sales represent 90% of business at the company’s 12 outlets. “Every good dealer out there is trying to drive out costs so they can be more competitive,” says Rice, who employs about 200 people. “In a world where health costs and everything else are going crazy, we have to be able to offer value to our customers and employees.”
Better visibility to customers
Tredroc Tire Services Inc. is concentrating on its core markets of Illinois and Michigan, the states where most of its stores are located, according to Larry Jeffries, chief executive officer. The company also has outlets in Ohio, Indiana and Kentucky.
Jeffries was promoted from chief operation officer to CEO on Oct. 1, 2018, succeeding John Boynton, who had been Tredroc’s CEO since Sept. 1, 2016. Under Boynton, Tredroc Tire Services merged with Belle Tire Distributors Inc.’s commercial division and Belleroc Tire Services, a joint venture of Belle Tire and Tredroc.
When the merger was completed at the end of 2016, the “new” Tredroc had 25 locations and served a larger geographic area. The company extended its service promise to customers whose fleets travel outside its geographic footprint by joining the Tire Service Solutions (TSS) network in early 2017. TSS is made up of 11 commercial dealers who have banded together to provide service and product to all customers within an eight-state area. TSS was organized by Gary Van Blaricom, president and CEO of Eastern Iowa Tire Inc.
In January 2018, Tredroc closed outlets in markets where growth opportunities were limited or the areas could be served from nearby locations. The closures brought the store count to 21. At the same time, the company restructured its operations into east and west regions.
In September 2018, the company modified its sales structure, going from five to three commercial sales regions and from two to one OTR (off-the-road) sales region. Under the new sales structure, the regional operations managers and regional sales managers will report to Jeffries. “We removed two layers of management, which gives us better visibility to our teammates and customers. This allows us to operate more efficiently and respond quicker to the business dynamics.”
Jeffries sees tremendous opportunity in the Chicagoland and Detroit freight markets. New service offerings are part of the company’s plans to grow business in its current footprint.
“With the increasing margin compression and product commoditization, we are looking at adding complementary products and services,” says Jeffries. The company also sees opportunities for its OTR business. “With a revitalized infrastructure bill on the horizon, we think OTR is a space that has a lot of growth potential.” Jeffries says Tredroc is anxiously awaiting the impact of tariffs on the retread market.
Last January, Tredroc downsized its Toledo, Ohio, facility with the intention to relocate it. Because the process of securing a new site is taking longer than expected, the company is revitalizing the existing location until another facility can be secured. Jeffries expects the Toledo facility to be fully operational by the end of 2018. Tredroc, which is based in Elk Grove Village, Ill., is in the No. 12 spot.
Opportunities in wholesale
Black’s Tire Service Inc. of Whiteville, N.C., is growing its commercial and retreading business, according to Rick Benton, vice president. The company is a member of the Goodyear Retread Network and operates a plant in Clarkton, N.C. “We’re trying to grow that. It looks like a new tire coming out of that retread plant, they’re that good,” says Benton.
The changes in wholesale distribution since the beginning of 2018 have given a big boost to the company’s wholesale division, BTS Tire & Wheel Distributors. “We are diversified, and it sure creates a lot opportunities,” says Benton.
Four distribution centers serve customers in North Carolina, South Carolina and southern Virginia. The company also stores extra inventory at several stores (called satellite wholesale locations) for wholesale customers. The BTS Partner Dealers wholesale program for independent tire dealers and car dealerships has been expanded as well.
“They just need quality service and a personal touch,” says Benton. “When December rolls around, we’ll be getting into our 90th year of business. Service has what kept us around. We’re all about families doing business with families so that’s why we support the independent tire dealers and dealerships.”
In addition to tires, BTS offers equipment, supplies and training to its partner dealers. Training topics range from computer software and shop equipment to passenger and commercial tire safety. Safety training is led by Joe Humphrey, a Tire Industry Association-certified instructor. A training center is located at the company’s headquarters in Whiteville, N.C. The company is ranked No. 20 on the Top 25 Commercial Tire Dealers list. ■
See the Top 25 list here.