'Shift to low cost production is still far from over,' says Ludwig

Dec. 14, 2006

"In the last month, we've heard about more new plants or expansions in low cost countries by Continental and Yokohama. So the trends I have written about in the past are continuing," notes Saul Ludwig in the December installment of the "Ludwig Report" in Modern Tire Dealer magazine.

"And the shift to low cost production is still far from over," he adds.

"In 1998, there were 220 million passenger tires produced in the U.S. In 2005, it had fallen to 176 million, and by 2010, the number could be down to 125 million.

"It's sad to see all those manufacturing jobs disappear, but just like in shoes, textiles, furniture and cars, the U.S. cannot compete with countries where wages are up to 90% less than ours!"

Ludwig is a managing director with KeyBanc Capital Markets, a division of McDonald Investments Inc. based in Cleveland, Ohio. Look for the full "Ludwig Report" in the December issue of Modern Tire Dealer magazine.