©Entire Contents Copyright 2019 by Crain Communications Inc. All rights reserved. January 7, 2019 THE TIRE DEALER’S NEWSPAPER SINCE 1983 $79 per year, $4 per copy ATD emerges from Chapter 11 bankruptcy By Don Detore As part of the latest move, ATD said it is is- Under the terms of the agreement, the term- ATD CEO Stuart Schuette called it a new Tire Business Staff suing payment for all pre-petition obligations loan lenders agreed, among other things, to: beginning. due. North America’s largest tire distributor  Provide half of the $250 million in new “We are a stronger company with the nan- HUNTERSVILLE, N.C. — American Tire Distributors said it has $1 billion of nancing “arranged by nancing to support ATD’s operations; cial  exibility to build on an 80-year history of Inc. has emerged from Chapter 11 bankruptcy Wells Fargo Capital Finance to support opera-  Extend the maturity of the term loan leadership and innovation,” Mr. Schuette said. protection less than three months after initiating tions and future growth initiatives.” facility by three years; and “We are laser-focused on delivering great- the process. On Dec. 17, ATD’s voting stakeholders — in-  Participate in exit nancing upon ATD’s er value for our customers and manufacturer The announcement was made Dec. 21, two cluding 100 percent of voting term lenders and completion of the court-supervised process. partners, with differentiated capabilities based days after the U.S. Bankruptcy Court for the voting shareholders and 98 percent of voting As part of the agreement, bondholders will on advanced analytics. Our ongoing transfor- District of Delaware approved a reorganization bondholders — “overwhelmingly” approved receive 95 percent of new equity in the recap- mation means that ATD will remain the most plan that ATD said will reduce its debt by $1.1 ATD’s reorganization plan. ATD led for Chap- italized company, and existing equity holders connected and insightful automotive solutions billion and give it renewed nancial  exibility. ter 11 bankruptcy protection on Oct. 4. will receive 5 percent of the new equity. See Leaner, page 23 Top stories of the year Year in review Wholesale See pages 10-16 changes abound in 2018 By Don Detore Tire Business Staff he last 12 months seemed like an al- phabet soup full of changes in the Twholesale tire business. NTW. TBC. TCi. ATD. From January, when Michelin North America Inc. (MNA) and Sumitomo Corp. of Americas (SCOA) announced the formation of National Tire Wholesale (NTW) — a 50-50 joint venture that combines Michelin’s TCi wholesale business with the Carroll Tire whole- sale assets of TBC Corp. (an SCOA # company) — 2018 was off and running. 1 In the deal, valued at $1.52 billion, Michelin acquired a 50-percent stake in TBC with a $630 million cash payment along with its TCi as- sets. NTW now ranks as the second-largest player in the U.S. wholesale tire market, combining Mi- chelin’s 85 TCi and TBC’s 59 Carroll Tire whole- sale distribution locations. Don Byrd, president and COO of TCi since 2014, was named president and COO of NTW. The wholesale news didn’t stop until the days right before Christmas. First, American Tire Dis- tributors Inc.’s voting stakeholders “overwhelm- ingly” approved of the company’s reorganization plan. Then, two days later, the U.S. Bankruptcy Court for the District of Delaware approved its plan, paving the way for ATD to emerge from Chapter 11 bankruptcy protection. It’s been that kind of year. Those changes, and numerous others in the wholesale business, rank collectively as Tire Business’ Top Story of the Year. Within that, the story of ATD dominated. Soon Year ahead after Michelin and Sumitomo launched NTW, two other Tier 1 tire makers and competitors, See pages 17-20 See TireHub, page 10 INSIDE

Curb appeal, cleanliness among secrets Marangoni boosting tread rubber ca- DEPARTMENTS of success for Pa. service station ...... 3 pacity at Tennessee plant ...... 4 Automotive service ...... 8-9 Icahn Automotive purchases auto repair Online tire sales pioneer Welch starts Classifieds ...... 21 chain in Florida ...... 3 portal for U.S. retailers ...... 5 Editorial ...... 6 Get the latest news at Tire Business’ website: www.tirebusiness.com ALL NEW

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VISIT CONTINENTALTIRE.COM FOR COMPLETE DETAILS. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 3 Valvoline franchisee adds 31 stores in California COSTA MESA, Calif. — Valvoline Instant Oil Change recent opening of VIOC centers in Menifee, No- nounced in the past several months. centers, in Rochelle Park, N.J., and Uniondale, (VIOC) franchisee Henley Paci c LA L.L.C. has vato, San Francisco, San Rafael and Santa Rosa, Others involving franchisees include: N.Y., in converted commercial buildings. The Ro- acquired 31 Synfast Oil Change quick-lube loca- Calif. The latter four previously were 10 Minute yyPhoenix 27 L.L.C. opened a VIOC center chelle Park center — in a former 10 Minute Oil tions in Southern California and converted them Oil Change locations. in Lawrenceburg, Ky., its fth in the suburb of Change Place outlet – is Galena’s fth VIOC lo- to the VIOC brand. The Synfast chain featured Castrol-brand lu- Frankfort, Ky. cation in Bergen County, N.J., while the shop in The stores are located in cities stretching from bricants. yyIvy Lane Corp. opened a VIOC center in Uniondale — in a former Flash Lube location — Bakers eld in the north to San Diego. Financial Henley also opened a VIOC center recently Melrose Park, Ill., its 10th in the Chicago area. is the franchisee’s seventh VIOC on Long Island. terms were not disclosed. in Weymouth, Mass., and another Henley unit, yyEarl Erdmann acquired three existing yyIvy Lane Corp. acquired a Havoline Express Henley Paci c LA is an operating unit of Bos- Henley Gulf Coast L.L.C., opened its rst VIOC quick-lube stores, in Canyon, Plainview and Lube in Alsilp, Ill., and converted it to a VIOC cen- ton-based Henley Enterprises, the largest VIOC center in New Orleans, in a converted three-bay Abilene, Texas, and converted them to the Val- ter, its fth location in the Chicago market. franchise nationwide with more than 100 stores auto service outlet. Henley has stores in Dela- voline Express Care platform. The locations — Valvoline Inc. also opened a dozen compa- in California and 100-plus more in 11 Eastern ware, Florida, Massachusetts, Maryland, New previously Scott Oil Change and Kwik Kar Lube ny-owned VIOC centers in seven states: Green- Seaboard states. Hampshire, New Jersey, Pennsylvania, Rhode & Tune — expand Mr. Erdman’s holdings to 25 wood, Ind.; Kettering, Lewis Center and Plain Henley CEO Don Smith said the acquisition Island and Virginia. Express Care locations in Texas. City, Ohio; Coraopolis, Pa.; Morristown, Tenn.; makes Henley Paci c the “dominant player in Henley sold 56 VIOC stores in Michigan in yyWesley Cronheimer and Greg Price opened Houston; Johnson City and Oak Ridge, Tenn.; and this huge market.” late 2017 to Valvoline in order to concentrate on an Express Care location in Kingsville, Ontario, the Hampton, Virginia Beach and Waynesboro, Va. It expanded into California in 2012 with the its Eastern Seaboard and California operations franchisees’ rst jointly owned outlet. Each has one These latest openings push the Valvoline oil acquisition of 72 EZ Lube locations and now has The Henley Enterprises deal is one of 20-plus other wholly owned store in the Kingsville area. change center network to nearly 1,200 locations 101 locations with this latest acquisition and the involving new Valvoline oil change locations an- yyGalena Companies opened a pair of VIOC throughout the U.S. and Canada. Icahn buying Florida auto repair chain JACKSONVILLE, Fla. — Icahn Automotive Group L.L.C. is buying RPM Automo- tive Inc., a Jacksonville-based auto repair chain with 10 outlets throughout north- eastern Florida. The deal is sub- ject to customary Tri StateTri Shell photo The front of ce of Tri State Shell features a collection of memorabilia, including signs depicting iconic auto service-related companies. closing conditions but was expected to close by year-end 2018, Icahn said. Terms were not disclosed. The business traces its roots to the Curb appeal, cleanliness, collectibles 1980s when President and CEO Colley Stowell opened his rst independent Exx- on-branded service station in Jacksonville. Pa. service station offers customers more than gas, auto repair Throughout the 1980s and ’90s, Gary By Dave Zielasko Remembered” calendars by artist Ledford, Gus Shage, John Morin and Tire Business Staff Ken Zella in the men’s. Bobby Thomas came aboard and the part- The men’s room features one ners started looking at stand-alone auto MATAMORAS, Pa. — “Our business of Les’ prized possessions, a 1956 repair shops operating under a “Car Care starts all the way out by the curb.” Chevy Belair taillight mounted on with Integrity” banner. That’s one of the lessons Les the wall. Open it and you’ll nd The rst RPM Automotive location Strickler passed down to his son where owners at one time lled opened in 2001, and the business has Jeff, who now owns the full-service these vehicles with gas. grown to 10 outlets since. Seven of the out- gas station, towing service and tire Tri State Shell is a service station lets are in Jacksonville proper; the others shop his father ran for more than 40 thriving on its reputation as a unique, are in Fleming Island, Jacksonville Beach years, located just off the last exit fun, professional customer-focused and St. Johns. on I-84 East in Pennsylvania. operation in an area pocketed with “The acquisition of RPM Automotive “A lot of people forget that,” Les formidable tire and service compet- complements Icahn Automotive’s existing said. “They never clean up. They itors including Walmart Inc., Jack footprint in the region and will accelerate never do anything. Your business Williams Tire Co., Mavis Discount our growth in an important market for us,” starts from the curb, and it has to Tire and Kost Tire & Auto Care. said Icahn Automotive CEO Dan Niniva- look professional from the outside, The interesting memorabilia, ggi. He cited RPM’s “remarkable” growth from the curb all the way in.” which Les has collected and show- over the past two decades as a “testament It doesn’t take long to see that cased over the years, is one reason to the quality of its team members and ser- this philosophy has permeated Tri for its success. Cleanliness is another. vice model.”

State Shell in Matamoras. Walk Tire Business photo Dave by Zielasko South eld, Mich.-based Icahn Auto- into the small convenience store lo- Les Strickler, left, and son Jeff Strickler in front of Tri State Shell. Like father, like son motive did not say whether it will retain cated next to the three service bays, anywhere. you’ve entered a unique facility, you the RPM Automotive name or convert the and the area is spotless. Peek into the service bays and have to step into the restrooms. They Jeff, 46, bought the service sta- stores to one of its existing auto repair and Look closer and you’ll see a col- you’ll nd a traf c stoplight hanging are antiseptically clean, both men’s tion from his father four years ago, maintenance brands: Pep Boys, AAMCO lection of Danbury Mint 1/24-scale from the ceiling with the lights — and women’s, like you might nd in after working there since he was or Precision Tune Auto Care. automobiles displayed on a shelf, red, orange and green — repetitive- a ne restaurant or hotel. a teenager. He literally grew up in Icahn has eight Pep Boys outlets in historical clocks from oil com- ly going through their sequences as Not fancy, mind you, just pleas- the business. His parents took him Jacksonville. panies mounted on walls as well technicians work on vehicles below. ant, clean and tastefully decorated to work each day as a baby, keeping Icahn Automotive President Brian Kan- as signs from companies such as It’s another reminder this is not with framed puzzles, put together him in a crib in the of ce. er noted that acquisitions such as this help Goodyear and Sinclair. your usual service station. by Les, in the ladies’ room, and He said he knows Tri State Shell increase the “breadth and density” of the And there’s not a speck of dust But to really appreciate that nostalgic pictures from “America See Tri State, page 23 rm’s service center coverage. “We’re well positioned to capitalize on the growing demand for automotive service by individuals and eets as vehi- Wanli sets up U.S. unit to handle TBR sales cles become more technologically com- ONTARIO, Calif. — Wanli Tire Corp. Ltd., China’s Ontario, according to Anna Gao, the new com- Wanli’s decision to open a U.S. of ce comes plex and the vehicle population grows,” 19th largest tire maker, has established a U.S. pany’s top executive. against a backdrop of potential import duties he said. sales of ce — in partnership with Au ne Group The new company has set up a dedicated on tires of up to 25 percent as proposed by the Icahn Enterprises L.P.’s automotive seg- Co. Ltd. — in Ontario to handle sales of Wan- website — wanlitiresus.com — that outlines Trump administration. ment — comprising Pep Boys, IEH Auto li-brand truck and bus tires in the U.S., Canada the products available and provides background In 2017, the tire maker’s parent company, Parts Holding and franchise businesses — and Mexico. on Wanli Tires. The site mentions a three-year Guangzhou Vanlead Group Co. Ltd., proposed trimmed its operating loss in the quarter The new of ce, Wanli Commercial Tire warranty on “quali ed” products. investing up to $1 billion to build a plant in the ended Sept. 30 to $13 million on 4.7-per- North America Inc., coordinates shipments to Au ne Group is a Qingdao, China-based dis- U.S. It put those plans on hold inde nitely this cent higher sales of $733 million, accord- customers with either container loads directly tribution company with representative of ces past summer. ing to the company’s third-quarter 10-Q from Wanli’s factory in Hefei/Anhui, China, or in 130 countries. It markets a full range of tires With scal 2017 sales of $522 million, Wanli ling with the Securities and Exchange smaller lots from the company’s warehouse in under its own brand as well. is the 47th largest tire maker worldwide. Commission. 4 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com Marangoni expanding U.S. plant, NEWS IN BRIEF wide-base Ringtread capacity AAPEX 2018 enjoyed sell-out LAS VEGAS — The Automotive Aftermarket Prod- MADISON, Tenn. — Marangoni Tread North including 500mm widths, the workforce by 10 per- ucts Expo (AAPEX) had a sold-out trade show in America is expanding tread rubber capac- Marangoni said. cent. November with 2,511 exhibiting companies from ity at its plant in Madison to meet growing Marangoni offers four Marangoni opened the around the world displaying products and parts in demand for its products. products for the wide-base Madison plant in 2004 and 5,539 booths. The project, for which no investment sector: RDA-One and RTA- has expanded it a number Organizers of AAPEX 2018, which was held Oct. sum was disclosed, includes adding capac- One for long-haul appli- of times since, including 30-Nov. 1 at the Sands Expo in Las Vegas, said the ity to produce the company’s XP Extreme cations; RZ12 for regional a $10 million project in event drew 48,603 targeted AAPEX buyers among Performance Ringtread treads for wide- applications; and RSSY3 for 2012. 161,938 automotive aftermarket professionals who base single truck tires, Marangoni said. on/off-road applications. Marangoni Tread N.A. were in town during AAPEX and the concurrent “With unit sales up this year, production “Our primary goal, ev- is a subsidiary of Rovere- Specialty Equipment Market Association (SEMA) had to be increased right away,” Maran- ery day, is to provide our to, Italy-based Marango- Show at the Las Vegas Convention Center, which goni Tread NA President and CEO Bill customers with the best in ni S.p.A., which recently ran Oct. 30-Nov. 2. Sweatman said. “Independent retreaders’ class products at the time disclosed plans for a glob- The SEMA Show, which exhibits automotive af- business remains strong and we expect de- they need them,” said Chan- al partnership with Borra- termarket parts and accessories, off-road, racing, re- mand to continue to increase as we move thavy Vongsamphanh, vice chas Vipal S.A. of Brazil styling and collision repair equipment, featured more into 2019.” president operations. in what Marangoni said than 2,400 exhibiting manufacturing companies and The new production line, expected to be The project will boost could become the largest drew about 70,000 targeted buyers. in operation in the second quarter of 2019, the 14-year-old plant’s overall capacity by global independent player in the retread- The Global Tire Expo powered by TIA (Tire In- will produce spliceless Ringtreads up to and 20 percent, Marangoni said, and expand ing sector. dustry Association) was held at the SEMA Show. AAPEX and SEMA are trade-only events and not open to the general public. Goodyear to boost Slovenia plant capacity 25% AAPEX is co-owned by the Auto Care Associa- tion and the Automotive Aftermarket Suppliers As- KRANJ, Slovenia — Goodyear is planning to expand capacity at its more than 130 million tires there. sociation, the light vehicle aftermarket division of plant in Kranj by about 25 percent by 2022 with the addition of The factory itself was built in 1956 by the Yugoslav state- the Motor & Equipment Manufacturers Association. equipment for building larger-rim-diameter tires. owned company operating under the Sava name. Starting in the AAPEX 2019 will be held Nov. 5-7 at the Sands The expansion, valued at $107 million, will add more than late 1960s it was partnered with the Austrian tire maker Semperit Expo, while the SEMA Show will be held Nov. 5-8 58,000 square feet to the factory that Goodyear has owned since and then later with Continental A.G. after Conti purchased Sem- at the Las Vegas Convention Center. 1998. The expansion will boost capacity by 1.8 million units a perit. year and create up to 160 jobs, Goodyear said. That relationship lasted into the 1990s, when Goodyear opened AWRS buys Midwest franchise Henry Dumortier, vice president consumer, Europe, said the talks with local management and then took a 60-percent share- expansion will help Goodyear keep pace with growing demand holding in 1998. It secured 100-percent control in 2004. NORCROSS, Ga. — Alloy Wheel Repair Specialists for premium larger-rim-diameter tires throughout Europe, the L.L.C. (AWRS) has acquired AWRS Midwest, a Middle East and Africa. franchisee with operations in Arkansas, Louisiana, Production will focus on replacement tires with 17- to 19-inch Missouri, Kansas, Oklahoma and Texas. rim diameters, Goodyear said. Current annual capacity is listed at The acquisition, for which nancial terms were about 8 million units with 1,600 employees. not disclosed, will grow the AWRS footprint sig- The rst phase of construction will begin in January, Goodyear ni cantly, both geographically and nancially, Nor- said, with additional phases planned for 2020 and 2021 to reach cross-based AWRS said, thereby expanding upon full capacity. AWRS Midwest’s successes and exploring more in- The decision to invest in the Kranj plant “reects the compa- depth capabilities. ny’s trust and con dence in our local team’s high-quality produc- AWRS Midwest COO Mike Riley will continue tion and is a great recognition of our performance over the last 20 to oversee daily operations of the Independence, years,” said Matej Zavrl, managing director of Goodyear Dunlop Mo.-based operation.

Sava Tires d.o.o. photo Goodyear This acquisition ts into the AWRS growth strat- Since buying into Sava Tires in 1998, Goodyear has invested Goodyear is planning to expand capacity at its tire plant in Kranj, egy espoused following its purchase in November more than $300 million to develop the Kranj facility and produce Slovenia. 2015 by Soundcore Capital Partners L.L.C., a New York-based private equity rm. Dunn Tire to move AirBoss boosts mixing capacities

Buffalo-area store NEWMARKET, Ontario — AirBoss of America Corp. is expanding custom-mixing capabilities at its facili- to larger location ties in North Carolina and Ontario in response to growing demand from customers. AMHERST, N.Y. — Dunn Tire L.L.C. has start- New tire manufacturing and retreading are two of ed renovation work on an existing commer- the industries AirBoss serves. cial structure in Amherst, a suburb of Buffa- The rm plans to double capacity at its 150,000-sq.- lo, that will replace an existing, smaller store ft. Scotland Neck, N.C., facility with a new rubber a mile away when it opens this summer. compounding line. AirBoss said it expects the expan-

Community Wholesale Tire Inc. photo Inc. Tire Wholesale Community Dunn Tire led plans for the store in May sion to be fully operational by July. Community Wholesale Tire Inc. has opened a warehouse in Peoria, Ill. 2017, but construction on the store renovation The rm received a performance-based grant val- began only recently. The renovation costs are ued at $125,000 from One North Carolina Fund to estimated at $1.5 million, according to the help facilitate the expansion. Community Wholesale Tire ling. AirBoss intends to add dedicated white and col- The structure, which sits on a site of slight- or rubber mixing lines at its 1-million-sq.-ft. site in ly less than one acre, occupies 10,500 square Kitchener, Ontario, to help it increase its market opens 1st warehouse in Ill. feet, large enough to accommodate 10 ser- penetration in these key areas. The lines are expect- PEORIA, Ill. — Community Wholesale Tire Inc. has opened a fourth warehouse, vice bays for vehicles, Dunn said in its 2017 ed to be fully operational by March. a 77,000-sq.-ft. facility in Peoria the company said will allow it “to better ling with the Town of Amherst. That’s about The moves are part of AirBoss’ overall strategy to service our existing northern and central Illinois and Iowa customers and 50-percent larger than the existing store. build greater regional capacity in the U.S. The rm expand our overall marketing area.” The property owner of the existing store said its overall processing capacity is 400 million According to company President Andy Berra, Community Wholesale Tire on Sheridan Road is clearing the land there pounds of rubber annually. purchased the building from LexisNexis Group and made “signi cant up- to make way for a Whole Foods store and re- grades” to the warehouse, including electricity, lighting and re systems prior lated retail, Dunn Tire said. to opening the facility in early December. Amherst is considered an “inner ring”- Volume 36, No. 20—Tire Business (ISSN 0746-9071) is published suburb of Buffalo with a population of about biweekly except the last issue in December by Crain Communications Total cost of the investment is $3.2 million. The new facility will have 15 Inc. at 1725 Merriman Road, Suite 300, Akron, Ohio 44313. Periodicals employees, including 12 new hires. 122,000. postage paid at Akron and additional mailing offices. Postmaster: Send address changes to: Tire Business, Circulation Dept., 1155 Gratiot Ave., Family-owned Community Wholesale, which operates three warehouses The Sheridan Drive store is one of 10 Dunn Tire stores in the greater Buffalo area and one Detroit, Mich. 48207-2912. in Missouri (Kansas City, Spring eld and St. Louis), now has nearly 600,000 of 26 in New York. Dunn Tire also has three Subscription rates: U.S., $79—one year; $148—2 years; group rates combined square feet of warehouse space. retail stores in the Erie, Pa., area. available. Surface delivery—to Canada, 1 year—$107 (includes GST); to Community Wholesale distributes tires to 3,500 tire dealers in Missouri, all other countries, $119 per year. Four weeks notice required for change Dunn Tire is among the 35 largest inde- of address. Single copy—$4. Canadian Post International Publications Iowa, Indiana, Kansas, Kentucky, Nebraska, Arkansas and Oklahoma, offer- pendent retail tire dealerships in the U.S., ac- Mail Product (Canadian Distribution) Sales Agreement #40012850, GST ing an inventory of more than $30 million. #136760444. Canadian return address: 4960-2 Walker Road, Windsor, cording to Tire Business research. ON N9A6J3. Printed in U.S.A. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 5 Online tire sales pioneer starts portal for U.S. retailers MIAMI — Mike Welch, founder of the Blackcir- Tirescanner.com on Christmas Day and invit- line, Mr. Welch said his experience has shown cles.com online tire-buying service acquired by ed U.S. retailers to sign up before then to be him that it’s the combination of price and ser- Group Michelin in 2015, is bringing his “click part of the launch. vice that seals the deal, not price alone. and t” style of online tire sourcing Tirescanner.com likely will launch with “Tirescanner is here to preserve value for to the U.S. with the establishment of more than 60,000 tire sizes, 3 million pric- the retailer and deliver value to the custom- Tirescanner.com. es, 60 retailers and a handful of key manu- online sales sector, Mr. Welch said, “It is im- ers,” he said. Mr. Welch, who was a strategic facturer partners, Mr. Welch said. portant that the brick-and-mortar retailers are “(Being) great online is not about driving adviser to online tire retailer Simple- “Our goal is to deliver an easy- able to keep hold of the tire margin as well as down price — any fool can do that — it is Tire L.L.C. during the second half of to-use whole-of-market platform for the installation fee … about reinforcing and showcasing to custom- 2017, claims Tirescanner.com will be customers and a low-cost high-per- “The ‘pure play’ operators are farming out ers the value propositions of our partners.” North America’s rst “online portal formance solution for retailers to en- the tire installation to the brick-and-mortar guys Mr. Welch has extensive experience in the on- for brick-and-mortar tire retailers.” sure they protect and grow their share and keeping control of the tire buying,” he said. line tire business, launching his rst effort in the “Tirescanner is a platform that cel- of the market in the face of growing “That means they can control sell-out prices, sector in 1995 in Liverpool, England, at the age of ebrates and showcases the very best of online competition,” Mr. Welch said. which ultimately results in prices going down.” 17. He sold that business to United Kingdom-based the brick-and-mortar retail stores the Welch Retailers who use the platform will The net effect of eroding prices is the brick-and- fast t chain Kwik-Fit and joined them before leav- United States has to offer,” Mr. Welch be charged a few dollars per transac- mortar dealers then need to follow suit with their ing in 2002 to launch Blackcircles.com. said, calling his new platform a “real strength-in- tion, Mr. Welch said, adding that dealers pay in-store prices, he said, noting the irony of the situ- He built that business to the point it was numbers opportunity for the traditional retailers.” only for quali ed leads. ation in that traditional retailers enabled the “pure generating more than $30 million annually Mr. Welch, who sold Blackcircles.com to Noting that tire makers and large whole- players” to get into that position in the rst place. by 2013, before Michelin offered to buy the Michelin for $75.5 million, planned to launch salers alike are becoming more active in the As for the issue of posting tire prices on- business. Michelin works on transitioning Scottish factory European Rubber Journal COUNT ON PROVEN EXCELLENCE. DUNDEE, Scotland — Group Michelin and Scottish authorities have agreed to a plan concerning the future of the tire maker’s Dundee factory after the 845-employee plant ceases operations COUNT ON SUMITOMO. in 2020. Under terms of an agreement signed Dec. 17, the French tire maker will collaborate with Scottish Enterprise, Dundee City Council and other stake- holders on a site-transformation plan designed to help turn the facility into a location for new economic and em- ployment opportunities, according to Scottish Enterprise, Scotland’s main economic development agency and a non-departmental public body of the Scottish government. The strategic partnership, called the Michelin-Scotland Alliance, will de- velop the Michelin-Scotland Innovation Parc, which will open opportunities in manufacturing and remanufacturing. A “program of ce” already has been established to help drive the rst phase of Michelin-Scotland Alliance projects forward, in cooperation with local, re- gional and national organizations. Dereck Mackay, Scotland’s economy secretary, welcomed “Michelin’s for- mal commitment to work in partnership to develop the next phase of their pres- ence in Scotland, including the skills and the capacity of their workforce and the transformation of the site.” The Scottish government will “sup- port the repurposing of the site, which will become a key location for manu- facturing, remanufacturing, recycling and low carbon transport in Scot- land,” Mr. Mackay said. Michelin Secretary General Remi de Verdilhac said the alliance would help ensure the “best possible out- Becoming an outstanding commercial tire brand requires excellence in all areas, not just one. come for all those affected by the in- tended closure of Michelin’s tire man- Sumitomo’s product quality, application coverage and ll rate were ranked in the Top 3 by ufacturing operations in the city.” nearly 600 dealers in the last 3 Tire Review annual surveys.* Count on proven excellence, The Michelin executive went on to highlight how the Dundee site work- count on Sumitomo. Learn more at SumitomoTruckTires.com. force had “reacted with great dignity and professionalism” following the *Survey conducted by Marketplace Insights on behalf of Tire Review news of the tire plant’s closure. for its 2018 Brand Study (August 2018 Sourcebook issue). “Their future is our priority,” Mr. de Verdilhac said, adding that the Mi- chelin-Scotland Innovation Parc would “leverage the strengths of the local economy to pave the way for a vibrant, innovation-led future for Dundee.” Michelin told employees at the Dundee For what drives you. plant the week of Nov. 5 it intends to close the factory by mid-2020. 6 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com Opinion

Brennan Lafferty 2019 promises to be another good year V.P./group publisher [email protected] • 313-446-6768 ndependent tire dealers should the speed of change today that annually. Dealers can ill afford wholesaler, entered and exited EDITORIAL STAFF nd 2019 similar in many is making it dif cult not only for to let their suppliers and other bankruptcy protection. Few ex- 330-836-9180 FAX: 330-836-2831 David E. Zielasko Iways to the year that just ended. them but also for all businesses online competitors take business pected such rapid and monumen- V.P./publisher, Editorial director Talking with industry experts in what has be- from them. Creat- tal happenings, which sent the [email protected] • 330-865-6131 Donald J. Detore and tire dealers about the com- come an increas- ing their own on- industry into a frenzy. Editor ing year, Tire Business found the ingly disruptive line strategy and In reviewing and analyzing [email protected] • 330-865-6126 general consensus is the economy business and con- presence is one their supplier situation, dealers Bruce Davis Special projects reporter will remain strong, unemploy- sumer world. way dealers can might consider a concern voiced [email protected] • 330-865-6145 ment low, vehicle miles driven Here are some OUR VIEW take advantage of by Mathew Riechers, manager of Miles D. Moore Senior Washington reporter will grow — albeit slowly — and of the challenges this new way of Riechers Tire & Auto in Wash- [email protected] • 703-256-9275 the sweet spot for independent and opportunities tire dealers are tire selling. ington, Mo.: What happens “if Kathy McCarron repair shops (i.e., vehicles out of likely to face this year: C&D Tire, with ve locations the wholesalers like TireHub and Reporter [email protected] • 330-865-6127 manufacturers’ warranties) will • Find a way to communicate in Tennessee, is doing just that. Amazon start funneling tires to Michael McCrady continue to expand. with two very different consum- It recently launched a program company-owned stores or in- Art director/page designer Sounds like 2019 has the mak- er groups — baby boomers, who that provides real-time pricing to  uencing where these tires are [email protected] • 330-865-6148 ings of a good year for indepen- are retiring in increasing num- consumers. “Our hope is that this delivered for installation? Inde- INTERNET STAFF Erin Pustay Beaven dent tire dealers and auto service bers and whose peak driving program will allow consumers to pendent tire dealers are going to Online content editor shops. years are behind them, and mil- compare and decide quickly on suffer,” he said. Being prepared [email protected] • 330-865-6106 Mark McCarron But like the year that just end- lennials, who are just entering tires from the computer or mo- for any and all potential situa- Digital coordinator ed, dealers will face signi cant their peak driving years. Baby bile device and speed up the buy- tions is the name of the game. [email protected] • 330-865-6123 challenges as more baby boom- boomers prefer face-to-face and ing process,” said Sales Manager • Make sure your sales team PRODUCTION/IT STAFF ers retire and millennials become traditional service and market- David Ogle. What might work at understands the products and Scott Merryweather Media services manager the largest consumer-buying seg- ing communications, while mil- your dealership? services you’re offering. Today’s [email protected] • 330-865-6104 ment, more new vehicle technol- lennials prefer communicating • Take time to study the im- consumers research tires online Anthony DiPonio online. Dealers who develop a pact that consolidation is having before coming to the dealer- Chief information of cer ogy is introduced, auto makers [email protected] • 313-446-1605 shift production to more CUVs strategy to market and commu- on wholesale tire distribution ship to purchase them. Once in SALES STAFF and SUVs and away from tradi- nicate effectively to both groups and develop a strategy that pro- the store, they tend to ask many 330-836-9180 FAX: 330-836-1005 tional sedans, and marketing and should do well. tects your dealership. In 2018 questions. Store personnel must Patrick Cannon Group sales director communication via social media • Develop an online strategy alone, two huge wholesalers be knowledgeable to service cus- [email protected] • 313-916 -1625 and smartphones become more to take advantage of tire man- were formed — Goodyear and tomers properly and provide the Christine Zernick Sales director prevalent in the tire and auto ser- ufacturers and other online Bridgestone Americas got to- correct tires. This will build trust [email protected] • 330-865-6108 vice world. tire sellers, such as Amazon. gether to create TireHub while and enhance the dealership’s rep- Bruce Miller Michelin North America and utation as a knowledgeable tire Regional Sales manager While tire dealers historically com, which have introduced di- [email protected] • 313-373-6665 have been able to adapt and ad- rect-to-consumer sales programs Sumitomo Corp. of America cre- location. John Hickey just to evolving competitive envi- that bypass the traditional retail- ating National Tire Wholesale — • Consider what the aging U.S. Sales manager auto parc means to your auto re- [email protected] • 260-437-8502 ronments (and there’s no reason er. While online tire sales remain and American Tire Distributors Peter Bianchi to think that has changed), it’s relatively small, they are growing Inc., North America’s largest tire pair operation and how to take Sales manager advantage of this. In 2018, there [email protected] • 312-265-6484 Brooke Stender were 69 million vehicles aged 16 Classi ed sales representative years and older in the U.S. By [email protected] •330-865-6117 Lori DiFrancesco 2023 that number is expected to Sales and conference coordinator reach 84 million. Repair oppor- [email protected] • 330-865-6121 tunities change as vehicles get MARKETING & EVENTS STAFF older, according to Mark Seng Sarah Arnold Marketing & events manager of IHS Markit, and shops may be [email protected] • 330-865-6169 dealing with the second or third Sally Dietz Assistant trade show manager owner of an older vehicle who [email protected] • 330-865-6112 might not want to spend as much AUDIENCE DEVELOPMENT on repairs and maintenance. Jennifer Mosley Knowing this, he recommended Group director, Audience development [email protected] • 312-649-5312 independent repair shops con- For new subscriptions or change sider introducing “good-better- of address write to: best” repair options for these Circulation Department, Tire Business 1155 Gratiot Ave. owners. Detroit, Mich. 48207-2912 or call 877-320-1716 (U.S. and If 2018 is any guide, 2019 will Canada only) or 313-446-0450. be a good year for independent FAX: 313-446-6777 tire dealers and repair shops, es- email: [email protected] For single copy sales: pecially those that take time to email: [email protected] study how the tire industry, auto Reprints: service, consumers and technol- Lauren Melesio [email protected] • 212-210 - 0707 ogy are changing, then react ac- EXECUTIVE OFFICES cordingly. 1725 Merriman Road, Suite 300, Akron, Ohio 44313-5283 330-836-9180 Letters to the Editor FAX: 330-836-2831 CRAIN COMMUNICATIONS INC Tire Business encourages letters to the edi- tor on any subject of interest to independent Keith E. Crain Mary Kay Crain tire dealers. Send a letter to: Editor, Tire Chairman Vice chairman Business, 1725 Merriman Road, Suite 300, KC Crain Chris Crain President Senior executive vice Akron, Ohio 44313-5283. Letters also can be Lexie Crain president emailed to [email protected]. Armstrong Robert Recchia Letters must be signed and may be edited Secretary Chief nancial of cer for length and clarity. Please include a day- G.D. Crain Jr. Gertrude R. Crain time phone number for veri cation purposes. Founder (1885-1973) Chairman (1911-1996) Letters also may be published on TB’s web- site: www.tirebusiness.com. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 7 Toyo reorganizing structure, changing name HYOGO, Japan — Toyo Tire & Rubber Co. Ltd. is duction engineering headquarters” will be dis- of division general manager, Americas Business set to launch a major reorganization and man- solved and the production engineering division Development. agement reshufe in 2019, which will coincide will be transferred to the new production HQ. In addition, James Hawk has concluded with the previously announced change in the As part of the revamp, Toyo will dissolve its his role as chairman of Toyo Tire Holdings of corporate name to Toyo Tire Corp. “business strategy division” and create a new Americas, giving way to Iori Suzuki, CEO and The reorganization will focus on the reinforce- supply-chain management (SCM) division with- president of the same entity. Bellissimo Duda ment of the headquarters function and strengthen in its business headquarters. Mr. Hawk has vacated his roles as CEO of the company’s technological capabilities. In terms of R&D, the company will dissolve Toyo Automotive Parts (USA) Inc. and chairman It also coincides with Toyo’s recent decision its “R&D Division No. 1” and “R&D Division of Toyo Tire North America OE Sales L.L.C., Goodyear to establish a “strategic partnership” with Jap- No. 2” and replace them with three divisions of and has become a senior adviser to Toyo Tire. anese conglomerate Mitsubishi Corp., one Toyo advanced process development, technology de- Mr. Suzuki, CEO and president of Toyo Tire said will enhance its global distribution assets, velopment and product development. Holdings since January 2018, succeeds Mr. Hawk promotes 2 help it compete more effectively in the evolving Also, a production method development de- as chairman while also keeping his current duties. mobility sector and fund capacity expansions. partment will be established under the advanced Kiyohito Hasumi was appointed executive vice The new organization layout will include a corpo- process development division. president and chief nancial of cer of Toyo Tire executives rate headquarters and a business HQ, an R&D HQ, a Among the executive changes, Kiyohito Hasumi, Holdings of Americas. Mr. Hasumi was the unit’s AKRON — Goodyear has promoted Jon production HQ as well as a sales HQ, Toyo said. senior vice president, Toyo Tire Holdings of Amer- senior vice president and held positions previously Bellissimo to senior vice president, Additionally, the company’s “fundamental pro- icas Inc., will take on the additional responsibility at Toyo Tire Canada Inc. and Nitto Tire Canada Inc. global operations and technology, and Laura Duda to senior vice president, global communications, and chief communications of cer. Both appointments were effective Jan. 1. Mr. Bellissimo, previously vice pres- ident, Americas product development and head of Goodyear Chemical, will provide executive leadership for Goodyear’s global engineering, qual- ity, procurement, manufacturing and environmental, health, safety and sus- tainability, sales and operations plan- ning and project management duties, the tire maker said. He succeeds Joe Zekoski, who will retire after nearly 40 years at Good- year. Mr. Bellissimo brings 40-plus years of experience in the design, develop- ment and manufacturing of Goodyear products, having served in a variety of roles at the regional and global levels. He also was director of Goodyear’s › Since 1983 Innovation Center in Akron and has played a role in manufacturing plant startups around the world. Under his leadership, the tire mak- er said, “Goodyear North America developed, industrialized and manu- Blackburn is the cornerstone factured some of the most successful tires in its history, including the As- for all of your OEM wheel, surance WeatherReady.” Ms. Duda, vice president, Amer- hubcap and center cap icas communications since 2016, will succeed Paul Fitzhenry, who plans to leave Goodyear after the rst needs. We continue to quarter. Mr. Fitzhenry is returning to the stand the test of time. East Coast to join his family, Goodyear said. He joined Goodyear in 2012. In her new role, Ms. Duda will • Access the most complete lead all aspects of Goodyear’s global communications, including media online inventory of relations, associate communications, corporate reputation, philanthropy, OEM wheels community relations and the com- pany’s eet of airships. Ms. Duda joined Goodyear in • Immediate shipping 2016 after almost 20 years of experi- nationwide ence in strategic communications in the energy industry. Before joining Goodyear, she led corporate, utility and commercial communications for Chicago-based Exelon Corp. Both leaders will report directly to Richard Kramer, chairman, CEO and president. Mr. Kramer called Mr. Bellissimo OEM Wheel Solutions and Ms. Duda “proven leaders who will bring both innovative thinking and deep industry knowledge that will position Goodyear for the fu- ture.” He thanked Messrs. Zekoski and Fitzhenry for “their tireless work and commitment to Goodyear,” which he said “has had a lasting impact on our Free, Sign Up Today! blackburnswheelfinder.com associates and helped position our company for ongoing success.” 800-981-8321 8 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com

AUTOMOTIVE SERVICE A look at new shop tools for auto aftermarket The following are among new tools 83124 1,000 Lumen Rechargeable port for charging other devices. • Gearwrench 86996 Kneel Pad released during Automotive Aftermar- Area Light with 500 or 1,000 lumens. The Ultra-Thin Flex-Head Work for working on hard or rough oors ket Industry Week, held recently in Both feature COB technology, a re- Lights come in two sizes: the 83135 features a built-in grab handle, three Las Vegas: chargeable lithium-ion battery provid- 500/250 lumen model and the 83134 layers of high-density solvent-resistant ing up 10 hours of run time and a USB 150/75 lumen model. Both feature foam for cushioning and a magnetized Shop aids fold-away hooks for hanging and a recess to hold spare parts. magnetic base for positioning. For more information, visit www. Apex Tool Group L.L.C. is offering The 83138 Rechargeable Work gearwrench.com. several accessories to help auto shop Light features a front-facing dual plastic copolyester casters, a concave technicians in the service bay, including: 500/250 lumen LED with COB tech- custom-molded composite tub and eth- A/C recovery • Gearwrench Professional Re- nology and an additional 150 lumen ylene-vinyl acetate padding for comfort. chargeable Lighting with ve differ- top inspection light. • Gearwrench 86994 Work Seat and Mahle Service Solutions has intro- ent lighting options: The 83139 3,000 • Gearwrench 86995 Mechanics 86992 Shop Stool are air shock height duced its next generation lineup of Arc- Lumen Rechargeable Area Light with Creeper which provides access to any adjustable and made to stand up to the ticPRO A/C handling systems to pro- ve levels of illumination ranging low-clearance overhead work ap- hard demands of auto shop environ- cess R134a and R1234yf refrigerants. from 600 to 3,000 lumens and the plication. It features six offset thermo- ments. The newly designed machines in- clude four units (ACX2180, ACX2180H, ACX2150 and ACX2120H) to recover, recycle and recharge vehicles equipped with R134a refrigerant. Two new units (ACX2280 and BETTER VALUE. ACX2250) are available to service SMARTER CHOICE. vehicles that are factory lled with the new R1234yf refrigerant. “These sleek, newly designed high-performance units are smaller in PREMIUM AG TIRES size than previous models taking up 10-YEAR WARRANTY The only thing better than selling tough, reliable tires is knowing they’re backed by a warranty that’s as aggressive as they are. That’s why Alliance Tire Americas, Inc. (ATA) is backing you up with a 10-year workmanship and materials warranty on our steel -belted farm tires. Ten years. A whole decade. less space in automotive repair shops,” Plus, our standard farm line is covered for 7 years. Our rugged industrial, construction, forestry and said Rich Wolf, Mahle general manager. Mahle offers a 7-inch capacitive LCD earthmover tires are covered for 5 years. That’s more than 2,000 different Alliance, Galaxy and Primex touch screen and an intuitive user inter- tires with an unbeatable warranty—and the extra convenience of fast, easy claims through the free ATG face so technicians can navigate menus. Warranty Wizard app. Each unit is fully automatic, so the ma- chine can run virtually unattended to Talk to your Alliance Tire Americas rep for details, call (800) 343-3276, or visit www.atgtire.com. allow technicians extra time to perform other duties, the company said. An LED indicator light at the top of the unit comes on when the service is completed. An IOS- and Android-capable phone app allows technicians to re- motely mirror A/C service sessions and other advanced functions, like push noti cations Wi-Fi capability ensures that the software on each unit is up-to-date with all the latest functional software enhancements available, the company said. A remote technician feature al- lows Mahle’s technical support team access to a unit over Wi-Fi for ad- vanced troubleshooting and support. For shops that need data manage- ment and reporting metrics, the new ACX models can log and monitor ser- vices allowing for analytics for proac- tive service reminders, refrigerant use optimization and warranty reporting. A built-in refrigerant identi er to en- sure that the proper refrigerant is being serviced is standard on the ACX2280, while an internal identi er with a sep- arate sample hose is available on the ACX2250. Both units service R1234yf vehicles. Several models have an oil system management function to provide au- tomatic weighing of recovered oil, al- lowing replenishment of oil removed during service. Built-in network print- ing allows full-page service reports for customers. Optionally, built in thermal printers are also available. For more information, visit www. servicesolutions.mahle.com. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 9

AUTOMOTIVE SERVICE Careless maneuver damages car’s door-lock assembly By Don Marinucci Experience shows that dry lubricants containing careless step during a rou- Te on do a ne job of rejuvenating balky automotive tine lubrication could dam- Aage a customer’s door-lock locks — especially on vehicles in the snow belt. assembly. Here’s how to avoid this potentially costly mistake. repair this lock assembly, the fellow and care save time, money and ag- The red lubricant tube is caught inside Readers probably would agree had to replace it. gravation. the door lock opening. Lightly hold the that lubricating a common automo- Mind you, this brief summation can- tube with one hand. Very gently slide tive door lock doesn’t require great not and should not be a comprehensive Dan can be reached via e-mail the tip of a pick (shown here) or paper technical skill. treatise on automotive door locks. at [email protected]. His clip alongside the plastic tube with Nonetheless, I have watched an On the other hand, it’s a rm re- previous columns are available at your other hand to release the tube. experienced but impatient techni- minder that old-fashioned patience www.tirebusiness.com. cian permanently damage a door lock assembly. Patience is the key to performing this valuable little ser- vice without incident.

Dan Marinucci is a freelance automotive service writer and former editor of two automotive service magazines.

Some tire deal- ers and service shop operators add value to a job by lubricating a balky or sticking door lock on a cus- tomer’s vehicle. ASSOCIATE DEALER PROGRAM One technique is treating the lock with a type of aerosol product called “dry lube,” which lubricates without leaving a wet residue. (Reportedly, the wetter the lubricant’s residue, the more readily it attracts and holds dirt.) A Powerful new Program to ACCELERATE Profits What’s more, experience shows that dry lubricants containing Te on With the Maxxis Accelerate program working for you, your business will gain a do a ne job of rejuvenating balky strong competitive edge in a marketplace that rewards value. A brand born of automotive locks — especially on vehicles in the snow belt. performance, Maxxis supports your ability to build profit with a product line An aerosol can of lubricant usu- ally comes with a thin, plastic tube you can be proud to offer. that snaps into its spray nozzle. The tube directs or aims spray lubricant As a Maxxis Accelerate dealer, you will have unlimited access to the support of into the desired place — in this in- stance, the door lock. a Global Tire Manufacturing leader. Sign up and accelerate your success today! Typically, sliding this plastic tube about one-eighth inch or so into the lock assembly is adequate. Usually, • Dealer Locator two squirts into the lock and repeat- edly operating that lock with the key • Monthly and Quarterly Retail Promotions does the job. • Maxxis Branded Point of Sale materials I have seen people ram this tube • Quarterly and Annual Bonus rewards into a door lock and then struggle to extract it. In my experience, a small, • Maxxis Wearables and promotional Items hinged ap in the lock has snagged the tube. Usually, you can disengage this www.maxxisaccelerate.com ap — releasing the plastic tube — by cautiously slipping the proper tool into the lock alongside the tube. Gently sliding the tip of a seal pick or a straightened paper clip into the lock assembly usually releases the hinged ap, enabling you to re- move the plastic tube harmlessly. Remember: Only slide the pick or paper clip in just deep enough to free the plastic tube. One time, I saw a tech jam one of these lube tubes in a door lock as- sembly. When the tube didn’t come 0000 0000 0000 0000 out easily, he yanked it out with a pair of pliers. Maxxis Authorized Dealer Afterward, the key would not slide completely into the door lock. Because a local locksmith couldn’t 10 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com

TireHub among wholesale shakeups Import duties debated Continued from page 1 With the year just beyond its half- Inc. banner, before Millwood, N.Y.- mport duties — both antidump- appealed, but a CIT judge agreed Bridgestone Americans Inc. and Good- way point, ATD announced a major re- based Mavis Discount Tire acquired ing and countervailing — im- with Commerce that Zhongce had year, announced the formation of their organization plan. About 100 positions Kauffman’s retail assets in January. Iposed by the U.S. government failed to exhaust its administrative own 50/50 JV, TireHub L.L.C., to dis- were eliminated, 40 others were added,  Tire and auto parts wholesal- grabbed headlines in 2018. remedies before  ling for an injunc- tribute Bridgestone, Goodyear and their and a renewed emphasis was made on er U.S. AutoForce, a division of U.S. The biggest news came in early tion against the agency. respective associate brand tires through increasing the number of franchises Venture Inc., bought Tire’s Warehouse November, when the U.S. Court of Meanwhile, the ITC is set to hear 80-plus distribution centers nation- that are part of ATD’s Tire Pros pro- Inc. (TWI) in June, expanding west- International Trade (CIT) remanded a case on Jan. 8 on proposed anti- wide. gram. ATD said the moves would ward into Arizona, California and to the International Trade Commis- dumping and countervailing import TireHub, a $600 million stand-alone save $20 million annually. Nevada. The deal includes TWI’s sion (ITC) its February 2017 negative duties on certain steel commercial company based in Atlanta, began oper- Less than two months later, # eight warehouses in California injury determination on truck and bus vehicle wheels from China. ations on July 3. CEO Peter Gibbons, a ATD reached an agreement in and Nevada. U.S. AutoForce op- tires from China. The Commerce Department pro- veteran business and supply chain ex- principle with holders of 75 per- 1 erates 24 warehouse distribution The ITC now must reconsider posed antidumping duties ranging cent of its bonds on terms of a re- centers in 10 states. its decision that Chinese truck up to 231.7 percent and coun- capitalization transaction, which would  K&M Tire Inc. opened its 27th and bus tire imports were not # tervailing duties ranging from reduce the company’s debt by up to $1.1 distribution center in June, a 21,000-sq.- causing material injury to the 3 48.75 to 172.51 percent on on- billion. ft. structure in Milwaukee. The com- U.S. tire industry. the-road steel wheels, discs and The low point, however, came in ear- pany also broke ground in July on a The reversal was prompted by an rims for tubeless tires with nominal ly October when ATD  led for Chapter 15,000-sq.-ft. distribution center in appeal lodged by the United Steelwork- rim diameters of 22.5 and 24.5 inch- 11 bankruptcy protection, a court-su- Beresford, S.D. ers union, which originally petitioned es, regardless of width. pervised process that was the next logi-  Atlantic Tire Distributors added the ITC in January 2016 for counter- The Commerce investigation into cal step toward reducing debt. ATD said D/Cs in High Point, N.C., and Lynch- vailing and antidumping duties against this category is in response to a pe- it had secured a commitment for $250 burg, Va., with combined capacity of Chinese truck and bus tires. tition brought in April by Accuride million in new  nancing to fund the 105,000 square feet, expanding the The CIT ruled the commission Corp. of Evansville, Ind., and Max- process. Colony Tire subsidiary’s network to erred in  nding neither price dampen- ion Wheels Akron L.L.C. of Akron. Through it all, Mr. Schuette main- six warehouses. ing nor threats to U.S. tire production. Such wheels generally are used on tained it was “business as usual,” for  Wholesale Tire Distributors opened Advocacy group Retread Instead ap- Class 6, 7, and 8 commercial vehi- ecutive, was named to lead the new JV. ATD, its employees and customers. a D/C in Grand Prairie, Texas. plauded the remand as well, arguing that cles. including tractors, semi-trail- “It’s critical for U.S. tire dealers “ATD is — and will continue to be  Community Wholesale Tire cheap Chinese truck tires that are both ers, dump trucks and buses. and retailers to be able to get the right — the leader in the replacement tire opened a D/C in Peoria, Ill., its fourth non-retreadable and cheaper than re- Commerce also is scheduled to re- tires on time to meet the needs and business because of our commitment warehouse. treads threaten the U.S. retread industry. lease in early January a preliminary expectations of their customers,” said to focusing on innovation to deliver the  Monro Inc. expanded its whole- In addition, CIT granted the U.S. determination on imports of 12- to TJ Higgins, president, integrated con- very best experience for our customers,” sale business in May with the acquisition Department of Commerce’s motion 16.5-inch steel wheels for trailers sumer tire group, U.S. and Canada, Mr. Schuette said. of Johnson City, Tenn.-based Free Ser- to dismiss a case brought against it by from China, in a case  led by Dex- Bridgestone Americas. “We know we can achieve that through vice Tire, whose holdings included four Zhongce Rubber Group Co. Ltd. star Wheel Co. Ltd., an Elkhart, Ind.- “With the ability to deliver the full the continued dedication of our associ- wholesale distribution centers, 12 retail Commerce levied a 119.46-per- based steel wheel manufacturer. portfolio of Goodyear products and ates. We can’t wait for tomorrow.” stores and one retread plant. It operates as cent countervailing duty rate against (For more on the top litigations of a dedicated focus on driving logistics ATD, he maintained, is stronger to- part of Monro’s Tires Now business unit. Zhongce in March 2018. Zhongce 2018, see story on page 16.) and customer service excellence, Tire- day than it was a year ago.  Tire Distributors of Georgia add- Hub creates a winning proposition for “And we’ll be stronger a year from ed a D/C in Statesboro, Ga., its third us, our customers, Goodyear’s compa- now than we are today,” he said. “ATD warehouse. ny-owned retail outlets and consum- embarked on a journey of transforma-  ATD opened a 1-million-sq.-ft. Michelin strengthens OTR biz ers ... ,” Goodyear Americas President tion 20 months ago. We’re leading mixing warehouse in Blakesle, Pa., he big man with the rolls — oth- or more, putting Bibendum in a posi- Steve McClellan said. change in the industry and will con- designed to supply other ATD ware- erwise known as Bibendum, or tion to challenge Bridgestone Corp.’s It wasn’t long afterward when Bridge- tinue to do so. I have no reason to be houses in the northeast and mid-At- Tthe Michelin man — got bigger 10-year reign at the top of the global stone and Goodyear said they would be anything but optimistic as we contin- lantic U.S. as well as eastern Can- in 2018. And who knows what might tire rankings. ending supply ties with ATD, eliminat- ue on this journey.” ada. happen in 2019. In addition to creating National Tire ing two of the wholesaler’s largest suppli- Some of the other changes in the Meanwhile, the Canadian wholesale Group Michelin made two major Wholesale (see story on page 1), Mi- ers. Goodyear accounted for 12 percent wholesale market — many of which market was disrupted in November when acquisitions in the past year, both with chelin in 2018 also: of ATD sales, according to ATD CEO would have been big news items them- Montreal-based Groupe Touchette Inc. huge implications for the OTR sector.  Announced that Florent Men- Stuart Schuette. selves in any other year — include: acquired Atlas Tire Wholesale Inc. The First, the French tire maker ac- egaux, senior executive vice pres- The moves jolted the Huntersville,  Max Finkelstein Inc. and Tread- acquisition gives Groupe Touchette, Cana- quired conveyor belt and polymer ident and chief operating of cer, N.C.-based tire distributor, which had maxx Tire Distributors Inc. formed a da’s largest tire distributor, extended reach, goods maker Fenner P.L.C. in a # will succeed Jean-Dominique estimated sales of $5.2 billion in 2017. wholesale buying group, Tire Distribu- particularly in Ontario, where Atlas op- cash deal worth about $1.7 billion. 4 Senard as CEO when Mr. Sen- In a matter of weeks, Moody’s Inves- tors of the Americas L.L.C. Finkelstein erates three distribution centers and Fenner, a producer of conveyor ard’s term expires in 2019; tor Services delivered another blow and Treadmaxx said the new company has a fourth under construction. belt and reinforced polymer products  Resumed production of giant to ATD, downgrading the company’s is structured as a “strategic member- With both companies privately owned, for the mining and general industrial mining tires at its 5-year-old earth- ratings and telling investors “the mag- ship group,” which provides opportu-  nancial details were not released. markets, posted revenues of more than mover tire plant in Starr, S.C., which nitude of the associated earnings and nities for additional members to join. Groupe Touchette only said it acquired $900 million for its most recent  scal was suspended in late 2015 because of cash ow decline will compound an The partners will continue to operate “the totality” of Atlas shares. The deal will year ended Aug. 31, 2017. slowing global sales; already levered  nancial risk pro le, independently in the marketplace. boost Groupe Touchette’s sales revenue to Fenner operates two divisions: Engi-  Unveiled a high-performance rendering a pre-emptive debt restruc- Atlanta-based Treadmaxx former- between $420 million and $500 million neered Conveyor Solutions (ECS) and resin adhesive that will replace resor- turing increasingly likely.” ly traded under the Kauffman Tire annually. Advanced Engineered Products (AEP). cinol as its material of choice for bond- ECS is a producer of heavy conveyor ing textiles to rubber; belts and AEP is a producer of diversi-  Stopped production at its 49-year- Trade, tariffs affect tire industry  ed polymer-engineered products. old truck tire plant in Ballymena, North- With the ink barely dry on that deal, ern Ireland, two months ahead of the t was a year fraught with trade and tariff tribulations Michelin announced in July that it was factory’s scheduled closing; across most every industry, including the tire and au- purchasing OTR/industrial tire and  Partnered with the World Wild- Itomotive service industry. wheel producer Camso Ltd. life Fund program as part of a cam- True to his campaign promise to end the 24-year- The $1.45 billion deal closed in late paign to reinvigorate the Uniroyal tire old North America Free Trade Agreement December, allowing Michelin to begin brand that aims to double the number (NAFTA), U.S. President Donald Trump joined the process of melding its own OTR tire of tigers in the wild by 2022; Canadian Prime Minister Justin Trudeau and # activities (farm, earthmover, off-road  Began a campaign, under #the- outgoing Mexican President Enrique Pena 2 truck, etc.) with Camso’s into a new di- truthaboutworntires, that it hopes sparks Nieto in signing a new agreement, called the vision to be based in Quebec that will a dialogue among tire companies to U.S.-Mexico-Canada Agreement (USMCA). oversee a global business with 26 plants, provide consumers with more informa- The agreement, reached on Nov. 30, will need con- roughly 12,000 employees and annual tion about how tires will perform over gressional approval before it goes into effect. sales exceeding $2 billion. time; Meanwhile, the Trump administration initiated its  rst from China worth $50 billion. More could follow in the Michelin said it has identi ed sig-  Set tire-recycling targets for the round of import tariffs on solar panels and washing ma- year ahead, predicated on the outcome of negotiations ni cant opportunities to increase sales next three decades, including a 2048 chines last January, then imposed tariffs on steel and alu- between China and the U.S. for a trade agreement. and reduce costs, thereby unlocking up deadline to manufacture tires using 80 minum from most countries. Most in the industry have praised the USMCA to $55 million in synergies by 2021. percent recycled materials; and In June, tariffs were extended on the European agreement and criticized the tariffs, while others are By acquiring Camso, among the top  Acquired Tablet Inc., an on- Union, Canada and Mexico. skeptical of both. three players in the construction mar- line travel agency that specializes in Mr. Trump then took aim at China in July, setting a (For more on the year in political news, see story ket in track and tire solutions for small offering “unforgettable and original tariff of 25 percent on 818 categories of goods imported on page 16.) heavy equipment, Michelin’s annual experiences” at boutique and luxury sales could increase by $900 million hotels. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 11

BKT expansion heads plant activity t certainly didn’t have the panache of 2017, when China’s cated near Rocky Mount, N.C. The Chinese tire maker Triangle Group Co. Ltd. announced it was building a plant expects both phases of the passenger and light truck tire Iin the U.S. and Nokian Tyres P.L.C. broke ground on its facility to be operational by 2023. rst North American plant, but 2018 did have its moments for Meanwhile, in mid-year, it was learned that China’s tire manufacturers revealing plans regarding new plants. Guangzhou Vanlead Group Co. Ltd. had put on hold The biggest reveal came in Las Vegas on the evening of inde nitely plans it announced a year ago to invest $1 Oct. 29, when Balkrishna Industries Ltd. (BKT) Chairman billion in a tire plant in South Carolina. Guangzhou Van- and Managing Director Arvind Poddar — as part of his ac- lead, a China state-owned entity that controls Wanli Tire ceptance speech for being named to the Tire Industry As- Group, had proposed building a tire plant in Orangeburg sociation Hall of Fame — announced his company was County, S.C., capable of producing 6 million consumer making plans to build its rst North American plant. # tires annually in the eight-year project’s rst phase. The new factory, which will be a $100 million 6 Sources at the Orangeburg County Development investment, will be the off-road tire manufacturer’s Commission (OCDC) con rmed the project is in Big year for mergers rst factory outside of India and fth tire plant overall. “neutral,” although the OCDC hasn’t ruled out com- BKT is India’s fth largest tire maker and No. 39 world- pletely that it may still come to fruition. A Wanli source By Bruce Davis Tire retail stores in January, it merged wide, based on scal 2017-18 sales of $692 million. in China said the company is evaluating alternative lo- Tire Business Staff with Express Oil/Tire Engineers in As part of the plan, BKT will establish a new sub- cations in Southeast Asia and Middle/Eastern Europe. February, adding the Birmingham, sidiary in the U.S., whose rst task will be to select an In the meantime, Wanli — in partnership with Au ne erger-and-acquisition ac- Ala.-based company’s 400-plus com- appropriate site for the plant and acquire the land. Group Co. Ltd. — has established a business of ce in tivity soared to unprec- pany-run and franchised locations to The company expects the plant to open in the rst half Ontario, Calif., to handle sales of Wanli-brand truck and Medented heights in 2018, its ledger. of 2021 with a capacity of 20,000 metric tons per year. bus tires in the U.S., Canada and Mexico. especially in the North American It also acquired Sun Tire & Automo- That’s smaller than any of the company’s four plants in While work continued on Nokian’s plant in Dayton, Tenn., wholesale and retail sectors. tive Service of Jacksonville, Fla., and India. By comparison, the company’s newest factory, in the Finnish tire maker relocated its North American head- Among wholesalers, M&A affected a handful of smaller dealerships that Bhuj, Gujarat, India, is rated at 130,000 tons per year. quarters closer to the facility, opening an of ce in Nashville, nearly half of the 15 largest U.S. whole- added up to more than 300 new points At the same time, BKT is investing more than $200 Tenn. Nokian is still maintaining some operations in Col- salers, from perennial No. 1 American of sale, increasing its reach to nearly million to upgrade and expand capacity for tires and car- chester, Vt., where its headquarters was located previously. Tire Distributors Inc. (ATD) on down. 650 stores, plus 118 more Express Oil/ bon black at its plants in India. Specialty tire manufacturer Global Rubber Industries Pvt. ATD made headlines throughout Tire Engineers franchised locations. As for Triangle, workers were in the last stages of site Ltd. of cially opened its state-of-the-art manufacturing plant the year, but not for reasons ATD man- Monro Inc., the industry’s M&A preparation in late September as the company moved in Badalgama, Sri Lanka, the rst facility in the country to agement had much in uence over. leader of the past several years, closer to breaking ground on its $580 million plant, lo- produce pneumatic agricultural tires. Here’s the 30-second eleva- and Icahn Enterprises L.P. tor pitch version of what hap- # (Pep Boys) were active in the pened: 5 acquisitions arena as well, al- Two of the biggest competitors beit at a slower pace than in pre- in the market — Goodyear and Bridge- vious years. stone Americas — agreed to form Monro added 43 locations in 13 a wholesale distribution partnership, separate transactions, including: TireHub L.L.C., a deal that allowed  Seven Appalachian Tire retail them both to end distribution agree- stores in Kentucky, Ohio, Virginia ments with ATD. TireHub opened and West Virginia were rebranded for business in July with more than as Mr. Tire Auto Service Centers, 80 warehouses under its wing. representing roughly $7 million in Parallel to the ATD/Goodyear/ annualized sales. Bridgestone news, Michelin North  Jeff Pohlman Tire & Auto America Inc. and Sumitomo Corp. of Service Inc., a five-store chain Americas formed their own distribu- with $5 million in annual sales, lo- tion partnership, National Tire Whole- cated in southwest Ohio that Mon- sale (NTW), combining Michelin’s ro is converting to its Car-X and TCi Tire Centers wholesale distribution Mr. Tire names. activities with the Carroll Tire whole-  Steele-Guiltner Inc., four sale assets of TBC Corp. stores, in Arkansas and Tennessee, In unrelated dealings: since converted to Car-X outlets. A “new” wholesaler — Tread-  Quality Tire & Auto Inc. in maxx Tire Distributors Inc. — ar- Willowbrook, Ill., and C&R Auto rived on the scene early in the year, Service Inc. of Illinois (since con- the result of an acquisition in the verted to Car-X outlets); and Wal- retail sector: Mavis Tire Supply of ton’s Automotive L.L.C. in Colum- Millwood, N.Y., bought Kauffman bia, S.C. (now Treadquarters). Tire Co.’s 69 retail stores in Flori- Icahn added 35 locations in 14 trans- da and Georgia in January, leaving actions, the largest of which were its Kauffman’s Treadmaxx wholesale purchases of Elliott Tire & Automo- activities as a stand-alone business. tive Service Inc., a Seattle-based inde- A group of Coker Group executives, pendent dealership with 10 stores in led by President and CEO Wade Ka- Washington, and RPM Automotive, wasaki and with backing from Irving a Jacksonville-based auto repair chain Place Capital, acquired the supplier with 10 outlets in northeastern Florida. of collector car and motorcycle tires GB Auto Service, a unit of Green- and wheels. The acquisition includes briar Equity L.P., emerged on the U.S. Coker Tire Co. Inc., Wheel Vintiques, tire retailing scene with a trio of acqui- Universal Vintage Tire, Phoenix Race sitions — Ramona Tire Inc. of Hemet, Tires, Specialty Wheel and Roadster Calif. (17 locations), Tire Works Total Wire Wheel brands. Car Care of Las Vegas (15 stores) and Meanwhile China’s Sailun Jinyu Brake Max Car Care Centers of Tuc- Tyre Co. Ltd. took over wholesaler son, Ariz. (14 locations). Dynamic Tire Inc. and converted Dy- Nevada Tire Holdings, which namic’s Husky Tire Corp. af liate to operates as Superior Tire & Rubber Sailun Jinyu International and moved Co. in the Las Vegas area, acquired it to separate quarters in Brampton, most of the assets of Miracle Tire Ontario. The revamped distributor & Auto Care in Boise, Idaho, and handles the Blacklion, RoadX and converted the dealership’s four lo- Ironhead brands, sourced from Sailun cations to its Superior Tire brand, Jinyu factories in China and Vietnam. raising the total to 17 stores. More Among retailers: deals are in the works. Mavis Tire Supply of Millwood, Leeds West Groups expanded N.Y., set the pace this past year. In its holdings to 100 stores with the addition to buying the Kauffman See Growth, page 22 THANKS FOR VOTING OUR

CONSUMER TIRES #1 FOR PROFITABILITY There are plenty of tires to choose from, but

there’s only one that can keep your business—

and customers—moving forward. Sumitomo tires

don’t just perform well, they rank well, too. For

the third year in a row, our consumer tires were

ranked #1 for dealer pro tability.* But don’t take

our word for it, believe your bottom line.

See why at SumitomoTire.com.

*Survey conducted by Marketplace Insights on behalf of Tire Review for its 2018 Brand Study (August 2018 Sourcebook issue).

For what drives you. THANKS FOR VOTING OUR

CONSUMER TIRES #1 FOR PROFITABILITY There are plenty of tires to choose from, but

there’s only one that can keep your business—

and customers—moving forward. Sumitomo tires

don’t just perform well, they rank well, too. For

the third year in a row, our consumer tires were

ranked #1 for dealer pro tability.* But don’t take

our word for it, believe your bottom line.

See why at SumitomoTire.com.

*Survey conducted by Marketplace Insights on behalf of Tire Review for its 2018 Brand Study (August 2018 Sourcebook issue).

For what drives you. 14 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com

Dealers survive effects of hurricanes Advances in technology hile hurricanes this past ach year, it seems, something  Politicians continued to debate year failed to cause severe new, something different, the merits of the industry-supported Wdamage as Hurricanes Esomething innovative shakes AV START act, which calls for the Harvey, Irma and Maria did in 2017, up an industry in some way or another. establishment of a technology-neutral the tire industry still had to grapple While nothing such as the develop- regulatory framework to advance au- with several natural disasters in 2018. ment of the pneumatic tire, radial tire tonomous vehicle research and devel- Tire dealers and manufacturers in or the tire pressure monitoring system opment; some parts of Virginia and North Car- (TPMS) hit the market in 2018, plenty  NASA scientists aboard the olina faced the wrath of Hurricane Flor- of innovations did. International Space Station conduct- ence, which caused massive ooding. In one special mid-year issue alone ed experiments on Goodyear’s behalf Here’s how John Allen of Hughes Hester Tire Pros photo called “Tech4Tomorrow,” Tire Busi- to see how the station’s microgravity Bros. Inc. in Wilmington, N.C., de- Flood waters inundate Bladenboro, N.C., after Hurricane Florence hit ness highlighted a number of im- environment might affect the forma- scribed the aftermath of the mid-Sep- the state in mid-September. pending industry changes, not the tion of silica particles. Goodyear said tember disaster: “This town looks “We were right in the path of the Josue Correa, president of Correa least of which is the rush to produce it hopes the experiments will help its like a bomb went off.” storm,” Rick Benton, vice presi- Tire Distributors in San Juan, said a non-pneumatic tire that offers pneu- engineers and scientists “determine if One of Mr. Allen’s two tire dent of Black’s Tire, said of the a boon in business had been offset matic-based properties such as com- further investigation of unique forms stores in Wilmington lost part # dealership’s four stores in Wilm- by frustrations over delayed product fort, load-bearing capacity and of precipitated silica should be of its roof during the storm 7 ington, two in Jacksonville, deliveries, unreliable electric service braking/handling/grip. Such a # considered in tires;” and suffered water damage. The north of Wilmington, and one each and stalled scrap tire disposal. tire could reduce, if not elimi-  Retread industry supplier shop was closed for eight days as em- in New Bern and Lumberton. High winds and rains damaged nate, the pneumatic tire’s Achil- 9 Marangoni S.p.A. is collaborat- ployees tried to dry out and clean up “We’re not even in ood zones,” buildings and equipment, forcing les heel: Pressure loss. ing with fellow Italian  rm Directa the facilities; the other store wasn’t Mr. Benton said, noting that this some small tire shops to shutter per- While that development seems to be Plus S.p.A. on developing a range of damaged but was closed for three storm was “absolutely worse” than manently. Others were operating but a long way off, some of the innovative graphene-based rubber compounds for days due to power outages. the ooding from Hurricane Mat- still waiting for insurance money to changes in the industry that occurred truck and bus tread rubber, working Hughes Bros. was one of the un- thew two years ago. make repairs. in 2018 include: together to develop a propriety version lucky dealerships in the hurricane’s Several tire manufacturers and “It’s a different Puerto Rico,” said  Group Michelin entered into an of Directa’s Graphene Plus (G+) tech- path. Fortunately, several tire dealer- large tire chains survived the hurri- Primo J. Delgado, owner and presi- agreement with the Hyundai Motor nology to improve the performance of ships contacted by Tire Business re- cane and subsequent ooding. dent of World Wide Tires Inc., a tire Corp. to develop tires for electric and Marangoni’s retreading compounds; ported minimal or no damage due to Nearly all in the affected areas retailer and wholesaler. luxury vehicles;  Bridgestone Americas Inc. being located away from the ooding were slammed with at tire repairs “We lost long-time shops, mom-  Goodyear participated in au- formed a strategic partnership with Ital- rivers or on high ground. traced primarily to roo ng nails and-pop tire shops. They closed tonomous vehicle and intelligent tire ian polymer producer Versalis S.p.A. to Black’s Tire Service, which oper- from shingles blown off houses and down, never to open again. testing at Mcity, a University of Mich- develop technology to commercialize ates more than 45 stores in North and buildings in their areas. “There are a lot of small business- igan-led public-private partnership guayule in the agricultural, sustainable South Carolina, said eight of its stores Meanwhile, dealerships in Puerto es down on the island that just went designed to advance connected and rubber and renewable chemical sectors, in North Carolina suffered structural Rico, leveled by Hurricane Maria on away and some of them they just automated vehicles and supportive combining Bridgestone’s knowledge damage during the storm and some Sept. 20, 2017, were still struggling to closed because they didn’t have any technologies; in guayule agricultural and production were ooded. get back to normal last year. power and they moved to the states.”  Continental A.G. developed a technologies with Versalis’ expertise in wheel concept to meet speci cations commercial-scale process engineering for electric vehicles (EVs), consist- and market development for renew- Convenience, mobility motivate market ing of two aluminum parts, an inner ables; and aluminum carrier with an aluminum  Bridgestone Corp. adopted a s more customers demand Dealer Tire, said. service bays — address consumers’ brake disc and an outer aluminum rim Global Sustainable Procurement Poli- convenience from tire dealers, “We’ve built our business by con- shopping preferences such as simplici- well with the tire; cy that will apply to all of the tire mak- Amore companies are taking sistently driving innovation in the tire ty, convenience and exibility, qualities  Tire manufacturers report sig- er’s purchased materials and services, steps to react to that trend — whether distribution business and by providing many of today’s consumers seek when ni cant upgrades to the radio frequen- as well as to its suppliers globally, with that involves buying and/or installing automotive dealers with the tools and making purchases. The idea is to give cy identi cation (RFID) technology three goals: help identify and evaluate tires or servicing vehicles. services they need to be successful buyers the opportunity to control the that some say could alter the tire in- quali ed suppliers; promote best prac- Over the last 12 months, sev- selling tires.” tire-buying process from start to  nish. dustry by supporting improvement of tices; and serve as a communication eral companies made moves to SimpleTire’s national partners • In a mid-year decision that some the overall quality and gather reams of and improvement tool for the tire in- leverage the convenience of on- # include Pep Boys, Monro and say will help to level the playing  eld data for future improvement; dustry. line tire buying and mobile tire 8 Mavis Discount Tire. somewhat for brick-and-mortar stores, installation and service, either • Icahn Automotive Group the Supreme Court ruled, in a 5-4 through collaborations or new ini- L.L.C. and TBC Corp. announced decision, that states have the right to tiatives. initiatives to go after the larger corpo- require Internet businesses to collect Demise of the sedan The largest online entity of them all, rate/ eet business, which are in addi- sales taxes on all sales within the state, he landscape of the auto- Buick LaCrosse luxury sedans; the Amazon.com Inc., has been a prime tion to a mobile tire-installation pro- even if the businesses have no physical motive aftermarket and tire Chevrolet Cruze; and the Chevrolet example. gram being tested by Goodyear along presence there. Tindustry promises to change Impala. This year, Amazon forged agree- with dozens of independents active The National Governors Associa- in the coming two decades, thanks The auto maker also announced ments with three automotive service across the country. tion, as well as trade groups such as the to decisions that two of the Big it was reducing 15 percent of its providers — Sears Holding Co.’s Icahn Automotive rolled out its Tire Industry Association, Auto Care Three domestic auto makers 54,000 North American sala- Sears Auto Centers, Icahn Automotive Pep Boys Mobile Crew rig, a 28-foot, Association and National Retail Fed- made in 2018. # ried jobs, including a quarter Group’s Pep Boys retail network and dual-axle trailer with a service bay eration, said the decision has restored With the unprecedented 10 of its global executives, and Monro Inc. — to provide installation equipped with mobile lifts, tire-chang- fairness to retail sales. surge in sales of light trucks, close two unidenti ed plants in and balancing at those brick-and-mor- ing and diagnostic tools and equip- • Late in the year, Hankook Tire Co. SUVs and CUVs, Ford Motor Co. the world by the end of next year. tar retailers for customers who pur- ment and staffed by ASE-certi ed Inc. said it was revamping its global and General Motors Co. both an- GM did not say de nitively it chased tires on Amazon.com. automotive technicians. corporate structure to enhance com- nounced they were discontinuing would close three North Ameri- Sears Auto Centers in all 50 states — TBC initiated a mobile tire-instal- petitiveness, a process that will include production of most of their sedans can plants — in Oshawa, Ontario; nearly 300 stories nationwide — now lation service in early October in the efforts to accelerate the company’s in 2019. Lordstown, Ohio; and Hamtramck, install tires from Amazon, as do nearly Dallas and West Palm Beach, Fla., digital transformation. By 2020, almost 90 percent of Mich. — but rather that it would end 1,000 Pep Boy locations. Monro ex- areas through its NTB Tire & Service The restructuring took effect Jan. Ford’s North American model line- production there and not designate panded its collaboration with Amazon. Centers and Tire Kingdom Service 1 and includes the creation of an IT up will consist of trucks, SUVs, them any new vehicles to build. com to provide online customers tire Centers, respectively. Strategy Department and a “Car Life CUVs and commercial vehicles. Meanwhile, Fiat Chrysler Au- installation services at its automotive TBC also launched TireAmerica. Business” headquarters. The IT Strat- Ford will discontinue  ve key tomobiles N.V., which announced service locations in 10 Eastern states. com, a direct-to-consumer online egy Department will oversee efforts models: the Fiesta, C-MAX, Focus, in late 2016 that it no longer would Among the other big news in the platform that leverages the company’s to accelerate the company’s digital Fusion and Taurus. By 2020, the make the Chrysler 200 and Dodge online/mobile tire buying services in wholesale and retail assets. transformation, including developing a auto maker will sell just two sedans Dart, said its U.S. plants will be fo- 2018 were: • Goodyear launched its “Roll by group IT policy function. in North America: the Mustang, a cusing entirely on pickups and SUVs • Dealer Tire L.L.C., an indepen- Goodyear” retail tire concept at four • Bridgestone Corp. acquired a mi- high-performance pony car, and the for the Ram and Jeep brands. dent replacement tire distributor for car locations in the Washington, D.C., area. nority ownership stake in the holding forthcoming Focus Active, which Other sedans will be made abroad. dealerships, invested in SimpleTire, a The concept brings a retail tire show- company for the Pitstop auto service has a higher ground clearance than While the aftermarket  gures to business that links independent tire dis- room to vibrant lifestyle areas, such as chain active in Germany as part of a the current Ford Focus, similar to a continue to produce parts for those tributors across the country in an e-com- outdoor malls, where consumers can plan to expand its cooperation with crossover. discontinued models for the foresee- merce network that includes more than stop in to purchase tires and schedule Pitstop. GM, meanwhile, will cut produc- able future, it stands to reason that 3,000 independent supply points. appointments to have them mounted • Nitto Tire U.S.A. expanded its fo- tion of the Chevrolet Volt, the auto the percentage of trucks, SUVs and “The business of selling tires con- and balanced at their convenience. cus on customers’ digital experiences, maker’s  rst plug-in EV hybrid; the CUVs needing service will continue tinues to evolve,” Scott Mueller, part- The new stores — which in most cas- adopting a policy to be more respon- Cadillac CT6; the Cadillac XTS and to increase. ner and CEO of Cleveland-based es offer no tire services on site nor have sive to social media. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 15

A look at top Other 2018 highlights executive changes Other signi cant stories of 2018 in- a less redundant product portfolio. clude: • Cooper Tire & Rubber Co. and in 2018 • Discount Tire/America’s Tire Sailun Vietnam Co. Ltd. agreed to ere are some of the executive changes that oc- Hankook Tire Co. Inc. opened its 1,000th retail store, a fa- set up a joint venture in Vietnam curred in the tire and automotive service indus- Soo Il Lee to president and CEO; was executive vice cility in northern Phoenix, 58 years to oversee construction of a radial Htries during the past year: president and COO of its China operations. after its late founder, Bruce Halle, truck/bus tire plant rated at more opened the dealership’s rst store than 2 million units annually. Alliance Tire Americas Inc. Kumho Tire USA Inc. in Ann Arbor, Mich. The new store, • Jose and Luis Lopez, father and Dhaval Nanavati to president, succeeding James Samuel Choi to CEO, succeeding Hai Eok Choi; was opened in the fall, was built about 20 son owners of Lopez Tires L.L.C. in Clark, who left the rm; was vice president of aftermar- head of Kumho Mexico. miles northwest of the rm’s head- Salt Lake City, are beaten in what ket sales and president of South American sales. Shawn Denlein to executive vice president of sales and quarters in Scottsdale, Ariz. authorities believe may have been a Seth Walters to vice president of aftermarket sales, East. marketing; was senior vice president of tire merchandising • ATV Inc. opened three Ameri- racially motivated assault. Allen Lyons to vice president of aftermarket sales, for Monro Inc. can Tire Depot locations in July, in • U.S. tire shipments are expect- West and Canada; was director of sales and marketing, Tulare, Hollywood and West Covina, ed to increase 2.7 percent over 2017, fuel systems, for Cummins Inc. Les Schwab Tire Centers Calif., expanding the independent 1.7 percent higher than the U.S. Tire Jack Cuniff to CEO, succeeding Dick Borgman, who re- tire dealership chain to 107 locations Manufacturers Association forecast Bridgestone Americas Tire Operations tired; was CFO. throughout Southern California. in mid-year. Truck-bus tire ship- Amber Holm to vice president, marketing, consumer and • TBC Corp. converted its remain- ments increased 7.8 percent. customer engagement, U.S. and Canada; was vice presi- Monro Inc. ing 46 Merchant’s Tire & Auto stores • Formula One Management ap- dent, consumer brand marketing, U.S. and Canada. Deborah Brundage to senior vice president of marketing to its NTB Tire & Service Centers proved Pirelli Tyre as the designated Dave Nientimp to vice president of marketing and mer- and merchandising; was with Procter & Gamble Co. brand and announced plans to open tire supplier for the FIA Formula 1 chandising for Bridgestone Retail Operations, succeeding Evan Naylor to COO; was vice president of sales and 20 more NTB locations throughout World Championship for the 2020- Jeffrey Lack, who was promoted to vice president, market- operations at Murphy USA Inc. 2018 and into early 2019. TBC op- 23 seasons. ing, consumer tire, U.S. and Canada. Jerry Alessia to senior vice president of tire merchandis- erates roughly 740 NTB and Tire • Ohio approved a bill that makes it Eric Higgs to president of truck, bus and retread tires, ing, succeeding Shawn Denlein, who left for Kumho Tire Kingdom stores in 24 states. illegal to mount unsafe used tires on U.S. and Canada, succeeding Joseph Saoud who was USA; was general manager of multi-category retailers and • Belle Tire Distributors Inc. tar- vehicles within the state, becoming the named president of BATO Latin America; was vice presi- business development at Goodyear. geted Indiana for growth, with plans third state to do so, after Colorado and dent of marketing, commercial group. to open 20 stores there through year- New Jersey. A similar bill in Indiana Steve Sutherland to vice president of marketing, commer- Myers Industries Inc. end 2019. was voted down by the state senate. cial group, succeeding Eric Higgs; was executive director, Kevin Brackman to CFO and executive vice president, • VIP Tires & Service opened its • Oriente Tire USA, a new inde- sales, distribution and global accounts, Firestone Ag. succeeding Matteo Anversa who left the company; was rst retail store in Vermont, expand- pendent company created by tire in- chief accounting of cer. ing the dealership’s network to 58 dustry veterans Gus Lima and Mar- BKT USA Inc. retail locations throughout Northern co Zigni, became the exclusive U.S. Doug Kershaw to vice president; was associate vice pres- Pirelli & C. S.p.A. New England. distributor for tires manufactured by ident. Ning Gaoning to chairman, in addition to chairman of China • TravelCenters of America L.L.C. Turkey’s Petlas Tire Corp. National Chemical Corp., succeeding Ren Jianxin, who retired. added retreading to its portfolio, • Prometeon Tyre Group S.r.L said Carlisle Companies L.L.C. Marco Crola to CEO of the NAFTA region, succeeding converting an idled retread plant in it will invest $115 million over the Mike Arnold to vice president/general manager of Accella Pierluigi Dinelli who left the company; was senior vice Bowling Green, Ohio, to an autho- next two years to upgrade capacity at Performance Materials’ tire ll systems division; was head president of global OE and prestige business. rized Goodyear Retread Network its truck, bus, agricultural and OTR of global sales for Accella Tire Fill Systems. plant. tire plant in Izmit, Turkey. Prinx Chengshan Tire Co. Ltd. • Bridgestone Americas Inc. un- • After  irting with a move to Carlstar Group L.L.C. John Aben to president, Prinx Chengshan North Ameri- veiled its Retail Showroom Program, nearby Cleveland, Myers Industries Jacob Thomas to CEO, succeeding John Salvatore, who ca Inc.; formerly with Giti Tire (USA) Ltd. and Nexen Tire designed to help af liated retail deal- Inc. decides to keep its headquarters retired; was group president of Clarcor Air Filtration Prod- America Inc. ers improve their showroom design in Akron. ucts’ engine mobile ltration business. and the in-store shopping experience. • Shandong Linglong Tire Co. Prometeon Tyre Group • Shaesta Waiz, the youngest fe- Ltd., China’s third largest tire mak- Continental Tire the Americas Murilo Fonseca to CEO of the Americas region; was COO. male pilot to complete a solo  ight er, committed $1.7 billion to build Pavel Prouza to head of sales and marketing for the com- around the world in a single-engine two plants, one each in China and in mercial specialty tires unit, succeeding Federico Jimenez, Smithers Rapra aircraft, christened Goodyear’s new- Serbia, which will boost Linglong’s who was named a key account manager for the unit’s Eu- Brad Wurst to tire engineering consultant; formerly with est blimp, Wingfoot Three, at its production capacity by 50 percent. rope, Middle East and Africa region; was head of controlling Bridgestone Americas and Cooper Tire & Rubber Co. Ohio hangar. • Jiffy Lube International expand- for commercial specialty tires. • The Tire Industry Association ed further into vehicle maintenance, Toyo Tire & Rubber Co. Ltd. (TIA) introduced a new health-care launching Jiffy Lube Multicare, a Cooper Tire & Rubber Co. Iori Suzuki to CEO of Toyo Tire Holdings of Americas insurance bene t during the Special- franchise option that adds brake ser- Phil Kortokrax to senior vice president, global operations; Inc. in addition to president; succeeding Jim Hawk, who ty Equipment Market Association vice and automotive diagnostics to was senior vice president and president of North America continues as chairman. show, addressing one of the mem- the Jiffy Lube portfolio. Tire Operations. Tomoshige Mizutani to president and CEO of Toyo Tire bership’s top concerns. • Aftermarket giant Tenneco Inc. Christopher Ball to senior vice president and president of North America OE Sales L.L.C., in addition to chairman • Japanese conglomerates Mitsub- acquired Federal-Mogul L.L.C. North America Tire Operations, succeeding Mr. Kortokrax; of Toyo Tire U.S.A. Corp. and chairman and CEO of Nitto ishi Corp. and Toyo Tire & Rubber • Fairmount Tire & Rubber Inc. was global vice president for Whirpool Corp.’s KitchenAid Tire U.S.A. Inc. Co. Ltd. established a wide-ranging celebrated its 60th anniversary. business. Donald Bunn to CEO of Toyo Tire North America Man- strategic partnership that will en- • Cooper Tire relaunched a Coop- Todd Pickens to vice president, sales, Mickey Thompson ufacturing Inc., in addition to president. hance Toyo’s global distribution as- er-brand truck and bus tire line, 11 Tires & Wheels; formerly with Goodyear’s consumer re- sets, fund capacity expansions and years after phasing it out and mak- placement sales organization. Triangle Tire Co. Ltd. help Toyo compete more effectively ing the Roadmaster brand its sole Ding Mu to chairman, succeeding his father Ding Yuhua, in the mobility sector. truck/bus product. Giti Tire Group who died June 13. • Most tire manufacturers an- • Conti launched its rst two stan- Tim Fulton to COO of Giti Tire (USA) Ltd.; was vice nounced North America price hikes dard ag tires, the Tractor 70 and 85, president of BFGoodrich global operations at Group Mi- Yokohama Rubber Co. Ltd. — in some cases, two prices increases a little more than two years after the chelin. Jeff Barna to president of Yokohama Tire Corp. (YTC), within months — up to 8 percent in tire maker re-entered the farm tire Jim May eld to senior executive vice president of sales was COO. some cases. market. and marketing; was executive vice president of sales and Hideto Katsuragawa to chairman of YTC, in addition to • Continental A.G. announced • ATD’s Tire Pros launched sev- marketing at Kumho Tire USA Inc. president and CEO of Yokohama Corp. of North America. plans to reorganize into a holding eral initiatives, including a Tire Pros Lou Monico to vice president of sales and marketing Shinichi Takimoto to CEO of YTC, Yokohama Tire (Can- company by 2020, with three busi- marketing campaign with a simple for Canada; was national sales manager, Canada. ada) Inc. and Yokohama Tire Mexico S de R.L. de C.V. ness sectors, rubber, automotive and message: “Hassle Free. Guaranteed.” Humberto Gomez to president of Yokohama Tire Mexico, powertrain, with powertrain being • Bridgestone adopted a global Global Rubber Industries Pvt. Ltd. succeeding Gary Nash, who retired; was director general. set up as an independent, publicly sustainable procurement policy that Gary Stevens to president of sales, materials-handling held company. will apply to all of the tire maker’s tires, in the U.S. Zafco International • Continental Tire the Americas’ purchased materials and services, as Mahesha Ranasoma to CEO; was managing director Chris Tolbert to vice president of sales, East Zone, North Best Drive L.L.C. opened two com- well as to its global suppliers. of Dipped Products P.L.C. America; was director of business development, automotive, mercial vehicle service locations in • Light truck tire retreader Tread- Harris Premaratne to chairman. for American Kenda Rubber. Texas, with plans to open in seven Wright Inc. upgraded manufactur- more states before year-end 2019. ing at its Houston plant, supporting Goodyear Zhongce Rubber Group Co. • Kumho announced plans to a shift in production to 100-percent Darren Wells to CFO, succeeding Laura Thompson, who Craige McFerrin to vice president of sales for the Arisun streamline its sales strategy in 2019, bead-to-bead as part of its “Ameri- retired; was executive in residence and MBA coach at Uni- brand at ZC Rubber Americas Inc.; was East U.S. sales man- focusing on independent dealers and ca Made” marketing message. versity of South Florida’s Muma College of Business. ager with ZC Americas. 16 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com

Renegotiated, renamed trade agreement highlights year By Miles Moore process to reform NAFTA.” makers, which were disappointed when the USM- always, gured prominently in 2018. Senior Washington Reporter According to fact sheets from the Of ce of CA did not exempt Canada and Mexico from them. On Nov. 1, the U.S. Court of Internation- the U.S. Trade Representative, the USMCA will The announcement of the new U.S.-Chi- al Trade (CIT) remanded to the International WASHINGTON — Tariffs and trade dominated the require that 75 percent of a vehicle be manufac- na trade talks, including the tariff suspension, Trade Commission (ITC) its February 2017 de- political news in 2018, especially for tires and tured in USMCA-member countries to receive briey excited nancial markets, but their en- termination that there was no material injury to the automotive aftermarket. duty-free status, up from the 62.5 percent re- thusiasm faded when details of the deal weren’t the U.S. truck and bus tire industry because of The year ended with two major trade devel- quired by NAFTA. forthcoming. The Dow Jones Industrial Average Chinese imports. opments — the revamped North American Free It also requires that 40 to 45 percent of a ve- was down nearly 800 points, or by more than 3 The USW union, which had petitioned the Trade Agreement (NAFTA) and the promise of hicle must be assembled by workers making $16 percent, on Dec. 4, three days after the agree- ITC in 2016 for countervailing and antidumping renewed trade talks between the U.S. and China. or more per hour. ment was announced. duties on truck/bus tires from China, appealed On Nov. 30, U.S. President Donald Trump, Ca- Even more controversial within many U.S. With Washington concentrating on trade and the determination to the CIT. Interested parties nadian Prime Minister Justin Trudeau and outgo- industries, including tires and the auto after- elections, legislation was a relatively small part had until Dec. 11 to comment on the matter. ing Mexican President Enrique Pena Nieto signed market, were the steep tariffs instituted by the of the federal government year. The AV START In another, related matter, the U.S. Depart- the United States-Mexico-Canada Agreement Trump administration throughout 2018. Act (S. 1885), which would have created a ment of Commerce proposed antidumping du- (USMCA), the NAFTA successor pact. In March, citing threats to national security framework for regulating autonomous vehicles ties of up to 231.7 percent and countervailing One day later, the White House announced under Section 232 of the Trade Expansion Act on public roadways, languished in the Senate in duties of 48.75 to 172.51 percent against Chinese that Mr. Trump and Chinese President Xi Jin- of 1982, the Trump administration announced 2018 despite a similar bill, H.R. 3388, having on-the-road steel commercial vehicle wheels, ping had agreed to suspend all new tariffs on tariffs of 25 percent against imported steel and passed the House of Representatives by voice rims and discs for tubeless tires with diameters goods traded between the countries for 90 days 10 percent against imported aluminum. vote in 2017. of 22.5 to 24.5 inches. pending the results of new trade talks. The domestic steel industry and the USW “The AV START Act … would protect The ITC scheduled a hearing on the issue for The U.S. agreed to postpone raising tariffs were enthusiastic at news of the tariffs. Howev- against an unworkable patchwork of state and Jan. 8. on some $200 billion worth of Chinese goods, er, organizations such as the USTMA and the federal laws and regulations that could stie The tire retailing and retreading industries including tires, rubber and rubber chemicals, to Association of International Automobile Deal- innovation, job growth and the development of increased their lobbying of Capitol Hill in 2018, 25 percent from 10 percent. In return, China re- ers condemned the tariffs as harmful to their safety technologies,” the Alliance of Automo- concerned over key issues such as import duties, portedly agreed to buy unspeci ed amounts of industries. bile Manufacturers said in September. health care, right-to-repair, infrastructure fund- U.S. goods in the energy, agricultural, industrial USTMA members faced special problems Some congressional Democrats, however, ing, scrap tires and the estate tax. and other sectors. from the steel tariffs. The grade of steel needed said the AV START Act gave the auto industry On June 20, the Tire Industry Association Though Mr. Trump touted the USMCA as the for making reinforcing steel cord is not manu- too much leeway to ignore basic safety stan- hosted TIA Federal Lobby Day, during which biggest trade deal in history, some of the exact factured in the U.S., and the USTMA argued dards in the face of unproven technology. TIA members spoke to elected of cials and details of the agreement were unclear at the time that tariffs on such imports would only serve to Among tire-related state legislation, the most their staff members about issues important to of signing, and some opponents of the president punish domestic tire manufacturers. notable was passage of Ohio Senate Bill 223, tire retailers and retreaders. expressed doubt as to whether the USMCA The U.S. Department of Commerce later es- which sets penalties of $1,000 per violation for Among the congressional of ces TIA members would protect domestic jobs, labor rights and the tablished procedures for U.S. companies to ap- installing bald, damaged or otherwise unsafe visited included those of Sens. Lamar Alexander, environment as much as he said it would. ply for exemptions from the tariffs, and in May used tires on vehicles. R-Tenn.; Rand Paul, R-Ky.; Robert Menendez, The legislatures of the three nations must rati- the administration granted permanent exemp- With this action, Ohio became the third state D-N.J.; Marco Rubio, R-Fla.; Chris Van Hollen, fy the agreement before it can take effect. tions from the tariffs for steel and aluminum to enact USTMA-backed used tire legislation, D-Md.; Kirsten Gillibrand, D-N.Y.; and Tim The U.S. Tire Manufacturers Association imports from several countries. after Colorado and New Jersey. Arizona has its Kaine, D-Va., as well as those of Reps. Eleanor (USTMA) said the USMCA “recon rms the These countries included Brazil, which ac- own used tire law not devised by the USTMA. Holmes Norton, D-D.C.; Andy Harris, R-Md.; importance of free and fair trade among the counts for 56 percent of the tire-grade steel The Texas legislature passed the USTMA Bill Johnson, R-Ohio; and Dave Brat, R-Va. three countries.” imported to the U.S., and South Korea, which bill, but Gov. Greg Abbott vetoed it, and a bill Eight of the attendees represented Retread In- However, the United Steelworkers (USW) accounts for 8 percent. passed by the Indiana state legislature failed in stead, an organization devoted to advancing the union, which also organizes tire workers, said However, the existence of the steel and alumi- that state’s senate. message that retreading is a reliable, economical the new agreement “is only another step in the num tariffs still caused concern among U.S. auto Antidumping and countervailing duties, as and environmentally responsible technology. Goodyear case among ongoing litigation Halle among notable By Miles Moore Senior Washington Reporter deaths in tire industry WASHINGTON — As in most years, litigation Among tire industry veterans who died in 2018 were, in was a constant for the tire industry in 2018. chronological order: Government court actions on trade and Bruce Halle, founder and chairman of Discount Tire/ product quality vied for industry attention America’s Tire, Scottsdale, Ariz. with lawsuits involving product liability, Don Blythe, former president and executive director of alleged trademark violations and alleged the Western Canada Tire Dealers association. patent infringement. Joyce Newton, co-founder of Hoosier Racing Tire Corp. One of the biggest court-related stories Sheldon D. Schmucker, co-founder of Millersburg Tire of 2018 came to light in January when the Service in Millersburg, Ohio. National Highway Traf c Safety Admin- Sheldon R. Salzman, former president of Uniroyal Tire istration’s Of ce of Defect Investigation Co. and former co-chairman of Uniroyal Goodrich Tire Co. (ODI) opened an investigation of approx- Stephen D. LaFerre, a former member of BFGoodrich imately 40,000 Goodyear G159 commer- Co.’s tire division public relations group. cial vehicle tires manufactured between Olive Storey, former executive director of the Western 1996 and 2003, some of which are tied to a Canada Tire Dealers. series of Class A motor home crashes. Barney Burks Jr., co-founder of Big Ten Tires in Pensacola, The Of ce of the Inspector General Fla. (OIG) of the U.S. Department of Trans- February 2017 negative injury determina- try, Retread Instead argued, is threatened Milan “Mike” Stone, fth president of the former Unit- portation disclosed in July it was conduct- tion on truck and bus tires from China. by cheap Chinese truck tires that are both ed Rubber Workers union. ing an investigation of allegedly defective The remand meant that the ITC had to non-retreadable and cheaper than retreads. George Fritz, owner and operator of Kershaw and Fritz Goodyear G159 tires installed on Class A reconsider its decision that Chinese truck Later in November, the CIT granted the Tire Service Inc. of Doylestown, Pa. motor homes. and bus tire imports were not causing ma- U.S. Department of Commerce’s motion to John Wagner, former managing director of the American The information on which OIG and ODI terial injury to the U.S. tire industry. dismiss a case brought against the agency Retreaders’ Association. based their actions came from a court case The United Steelworkers (USW) union, by Zhongce Rubber Group Co. Ltd. William “Bill” Ray Young Jr., former owner of Young’s led in 2005 in Arizona federal district which originally petitioned the ITC for Commerce levied a 119.46-percent coun- Future Tire Inc. in Show Low, Ariz. court by a family seriously injured in the countervailing and antidumping duties tervailing duty rate against Zhongce in Ding Yuhua, executive chairman of Triangle Tire Co. Ltd. tire-related crash of their motor home. against Chinese truck and bus tires, ap- March 2018. Zhongce appealed, arguing Thomas B. Geiger, former president of Capital Tire Inc. The case culminated in November 2012 pealed the ITC decision to the CIT in April that Commerce’s application of “adverse in Toledo, Ohio. with the judge ordering the release of 2017. The commission erred in nding nei- facts available” against the company during Joel Fischer, CEO and chairman of Vogue Tyre & Rubber Co. Goodyear documents to NHTSA. ther price dampening nor threats to U.S. the countervailing duty review was not sup- Juan Baez Santiago, president of TUCO Tire in Bay- Two decisions from later in the year tire production in its determination, and ported by substantial evidence. amon, Puerto Rico came out of the U.S. Court of International the CIT agreed. A CIT judge, however, agreed with Arnie Sperling, former co-owner of Globe Tire and Mo- Trade (CIT). As well as the USW, the retread advoca- Commerce that Zhongce had failed to torsports in Los Angeles. On Nov. 1, the CIT remanded to the In- cy group Retread Instead was pleased with exhaust its administrative remedies before Albert Hoffman, founder of Jetzon Tire & Rubber Co. Inc. ternational Trade Commission (ITC) its the CIT remand. The U.S. retread indus- See Tire, page 22 Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 17

Tire of cials expect ‘more turmoil’ in D.C. By Miles Moore in 2019 is passage of a compre- and wet traction is due in March, “The USTMA position is that most Senior Washington Reporter hensive infrastructure package according to Ms. Luke. In June, of the evidence shows no signi cant to fund massive rehabilitation the labeling portion of the tire risk,” Ms. Luke said. “But there are still WASHINGTON — Top of cials of the of the nation’s transportation fuel-ef ciency nal rule — left lingering questions, and this is what major U.S. tire, auto aftermarket and network. hanging since 2010 — is sched- these studies are supposed to answer.” auto service trade associations are With the failure of President uled to be issued, she said. TIA membership is showing inter- anticipating more turmoil in politics Trump’s infrastructure package, The minimum performance est in reviving the association’s En- this year, following the Democrats’ however, it is unclear what provi- standards were part of the Fix- vironmental Advisory Committee to regaining control of the U.S. House sions an infrastructure bill might ing America’s Surface Trans- address issues such as scrap tires and of Representatives in the November contain, or even if Congress can portation (FAST) Act, which the alleged toxicity of crumb rubber, midterm elections. reach bipartisan agreement on President Obama signed in De- according to Mr. Little eld IV. How much of an effect, and in one, they said. cember 2015. what ways, on the issues of interest “I would think it’s one of the Part of the FAST Act was a Other issues to the tire and aftermarket indus- bills that will pass, but I can’t provision to reinstate mandato- tries has yet to be seen, they said, even guess what the content ry tire registration. This provi- Among other issues important to the although they added that 2019 will will be,” Mr. Little eld said. sion was backed by the UST- auto aftermarket is the AV START Act, not be peaceful. “The Trump bill fell at on its MA, which was concerned over which would create a federal frame- “We can count on a lot more tur- face. Whatever the nal bill is, low return rates in tire recalls. work for regulating the deployment of Tire Business photo Miles by Moore moil in Washington,” said Anne For- it might not be as big as Trump Roy Little eld III (left), CEO of the Tire Industry TIA, though it too stressed automated vehicles on public roadways. ristall Luke, president and CEO of the wants or what we need.” Association (TIA), and his son, Roy Little eld the need for complete responses Organizations such as the ASA U.S. Tire Manufacturers Association Infrastructure will be one IV, TIA director of government affairs, hope Con- to recalls, said the original man- support the AV START Act because (USTMA). of the very few issues that will gress can pass an infrastructure bill in 2019. datory registration rule — rst it would prevent a patchwork of state “Democrats have the gavel in the gain bipartisan support, mostly promulgated in the 1970s — was laws for autonomous vehicles. But the House and a lot of new authority,” because of Democratic opposi- cording to Mr. Little eld IV. punitive toward tire dealers, and bill stalled in the Senate last year, de- Ms. Luke said. “That affects every tion to Mr. Trump, added Roy Little- “Some (Chinese) tire makers are mov- also did not allow for electronic collec- spite a similar bill passing the House issue, from the president’s personal eld IV, TIA director of government ing production from China,” he said. “If tion and transmission of tire identi ca- in 2017 by voice vote. tax returns to trade to the rollback of affairs. they build new plants, they don’t build tion numbers and purchaser data. “If we don’t see autonomous vehi- environmental regulations.” “They aren’t going to want to give them in China.” (The week after this TIA and the USTMA have been in cle legislation pass the Senate in the The House Democrats’ new sub- him a lot of big wins,” Mr. Little eld IV interview, Cooper Tire & Rubber Co. discussions over the content of a man- lame duck session, we’ll have to start poena power will keep the White said. disclosed plans for a joint venture with datory registration rule. Although the all over,” Mr. Redding said. House occupied, according to Ms. Agreement on funding mechanisms Sailun Vietnam Co. Ltd. to build a truck two organizations do not claim to Another bill that enjoyed support Luke. “The president has already will be key to reaching a bipartisan in- and bus tire plant near Ho Chi Minh City, have reached agreement on this issue, in the aftermarket industry, especial- thrown down the gauntlet,” she said. frastructure accord, according to Ms. Vietnam.) both Ms. Luke and Mr. Little eld III ly among SEMA and TIA members, For Roy Little eld III, CEO of Luke. But that will be easier said than Regarding a trade agreement with said they were happy that amicable is the Recognizing the Protection of the Tire Industry Association (TIA), done, she added. China, Mr. Little eld III said he won- discussions are continuing. Motorsports (RPM) Act. election results are always a matter of “(Senate Majority Leader Mitch) dered if the administration even has a “We are identifying a framework The bill asserts the legality of convert- pragmatism. McConnell has always said, ‘There negotiating strategy going into the talks. we can work within, and we will talk ing a street vehicle to race car use only, “You have to deal with what you’ve will never be a gas tax increase as long “Both sides have an interest in com- to NHTSA about that framework,” forestalling the recent EPA position that got,” Mr. Little eld said. “On some as I am majority leader,’” she said. ing up with something — but it won’t Ms. Luke said. a Clean Air Act exemption for race cars issues, we will be in better shape. On Nevertheless, there is still a lot of op- be quick,” he said. There are still issues to work out on applies to purpose-built race cars only. others, not as good.” portunity for bipartisan agreement on Mr. Hanvey was one of many spokes- registration, such as where the registra- The RPM Act passed the House En- Chris Kersting, president and CEO an infrastructure bill, according to Ms. persons for the auto aftermarket industry tion information goes when it is transmit- ergy and Commerce Committee, but did of the Specialty Equipment Market Luke. who testi ed against tariffs on imported ted, according to Mr. Little eld III. not advance past that stage. Mr. Kersting Association (SEMA), concurred, as There will be an opportunity for a pro- Chinese goods at hearings before the “If you have electronic scans for said SEMA had hoped for passage of vision promoting the use of rubber-mod- U.S. Trade Representative last August. tire information, where will the in- the bill in the lame-duck session, most i ed asphalt and other recycled rubber “The greatest impact from the ac- formation go?” he asked. likely as an attachment to an appro- products in road projects, she said. tion will be on U.S. consumers who Tire dealers won’t support the in- priations bill. will experience higher repair costs, formation going to manufacturers A Democratic House may be more Tariffs likely leading to the delay of critical who might be trying to collect cus- amenable to passage of a federal law vehicle maintenance procedures,” tomer addresses for direct online establishing an online sales tax, ac- It is also still unclear what will come Mr. Hanvey said in his testimony. sales, according to Mr. Little eld III. cording to Mr. Little eld III. Such a of the Trump administration’s efforts The ACA continues to ght the “But we can’t go back to paper and bill obtained considerable support in to reach a trade agreement with China, tariffs, he said more recently. pencils,” he said. a previous Congress, he said, but Tea and whether the 90-day postponement “We want to make sure the people Party opposition in the House killed it. Kersting Hanvey of 25-percent tariffs on some $200 who approved the tariffs understand that Scrap tires However, a Democratic House also billion in goods imported to the U.S. auto care is a global economy,” he said. means that legislation on tort reform did Bill Hanvey, president and CEO from China will become permanent. Ms. Luke said she believed it was Eighty-one percent of the scrap tires or abolishing the estate tax has little of the Auto Care Association (ACA). “I don’t know if it can be achieved “de nitely possible” to have an equitable generated in the U.S. in 2017 went to or no chance of passage in the new “Our government affairs depart- in 90 days,” Mr. Little eld III said. trade agreement between the U.S. and productive end-use markets, according Congress, according to Messrs. Lit- ment works to gain support on both “But these are the two largest econ- China. During a recent trip to China, she to the latest USTMA Scrap Tire Report. tle eld III and Little eld IV. sides of the aisle,” Mr. Kersting said. omies in the world, and it probably found considerable sentiment “It’s a never-ending job to The threat of small business own- “Whatever the complexion of Con- will happen eventually. It depends on among Chinese tire makers for nd sustainable markets,” ers, including tire dealers, having to gress, we still have the same job to do.” who’s willing to budge.” not only an agreement, but for said Ms. Luke, who also not- sell the businesses they inherited to “This is an opportunity to build our The 10-percent tariffs on the Chi- tariffs on Chinese tires. ed that the USTMA’s rst-ev- pay their estate taxes remains great, message with new members of Con- nese goods — including synthetic “One person told me she er sustainability report was they said. Some dealers pay insur- gress,” Mr. Hanvey said. “I think it’s and natural rubber, rubber chemi- thought tariffs could have a due out in late 2018/early ance premiums as high as $180,000 great, continuing our legislative efforts cals, rubber automotive and industri- positive impact on Chinese 2019. annually as protection against losing to gain as much support as possible.” al goods, and virtually every type of tire manufacturers, in that it Recently, one of the most their businesses because of estate tax Robert L. Redding, Washington tire — went into effect in September. would encourage them to endangered end-uses for scrap assessments, they said. representative for the Automotive There is a major difference of opin- improve the quality of their tires has been crumb rubber However, the biggest ongoing issue Service Association (ASA), said the ion on the tariffs between tire distribu- products,” she said. “She athletic turf. News reports iden- facing TIA members is health care, election results could have a signi - tors, who need lower-cost truck and bus could see a scenario in which Luke tifying crumb rubber- lled ath- they said. Tire dealers and retread- cant impact on most issues, including tires in their inventory, and retreaders, low-quality manufacturers would be letic elds as possible carcinogens have ers strive to offer health insurance to those affecting auto service. who suffer greatly from the inux of weeded out.” persisted, despite the preponderance of their employees, although skyrock- “A Democratic House will really non-retreadable Chinese tires that also scienti c evidence showing no correla- eting costs make the task daunting, take a different look at policy issues,” offer stiff price competition to retreads. Tire regulations tion between cancer and exposure to according to Mr. Little eld III. Mr. Redding said. This is the biggest BIPAVER, the European retread- crumb rubber. “Tire dealers and retreaders really election wave since the Republican ing organization, also found its mem- The National Highway Traf c Safe- Exposure studies from the U.S. En- try to take care of their people, unlike sweep in 2010, he said, and the Dem- bers suffering from Chinese import ty Administration (NHTSA) recently vironmental Protection Agency and some other small businesses,” he said. ocrats now in power will be more competition, according to Mr. Little- issued its regulatory agenda for 2019, California’s Of ce of Environmental At the Global Tire Expo in Las Ve- progressive than the Democratic eld III. The association made a con- according to Ms. Luke. Although the Health Hazard Assessment are due gas last November, TIA announced an House majority before 2010, he said. certed and ultimately successful effort agenda is not binding, two long-pend- out in 2019, according to Ms. Luke. alliance with National General Bene- to persuade the European Union to ing tire regulations are on the sched- These studies should go a long way ts Solutions to provide TIA members Infrastructure place tariffs on Chinese tires, he said. ule, she said. toward answering any questions re- with exible group health insurance Nevertheless, tariffs on Chinese A nal rule on minimum perfor- garding the carcinogenicity of crumb plans designed for businesses ranging One thing the executives hope for tires can never be all-effective, ac- mance standards for rolling resistance rubber athletic turf, she said. from two to 250 employees. 18 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com

Economy, employment to remain positive in 2019 By Kathy McCarron revenues for 2019, compared with Tire Business Staff a 5.1-percent increase predicted for 2018 over 2017 revenues. ositive economic growth and Seventeen manufacturing indus- low unemployment in the U.S., tries are expecting revenue improve- Palong with increased consumer ment in 2019 over 2018, including and corporate spending, are expected the plastics and rubber products and to continue through 2019, according transportation equipment industries. to economic analysts and surveys. Capital expenditures, a major driv- Economic growth is expected to er in the U.S. economy, are expected continue into the new year, with an to increase by 6 percent in the man- average 3-percent U.S. output and ufacturing sector and by 3.4 percent strong gains in domestic job growth, in the non-manufacturing sector, the according to Indiana University’s ISM said. (IU) Kelley School of Business. The manufacturing employment However, Goldman Sachs & Co. base should edge up 2.4 percent, L.L.C. predicts growth will slow sig- while non-manufacturing employ- ni cantly in 2019, to roughly 1.75 per- ment growth is pegged at 2 percent. cent by year-end, from a recent pace like,” the IU analysts said. es nd innovative ways of boosting the trade war has to date,” Goldman “Manufacturing, purchasing and of 3.5 percent. labor productivity. Sachs said, adding, “We expect con- supply executives expect to see “We expect tighter nancial con- Job market Goldman Sachs also predicted that sumption growth of about 2.5 percent growth in 2019. They are optimistic ditions and a fading scal stimulus the “impressive recent momentum” in in 2019, supported by solid income about their overall business prospects to be the key drivers of the decelera- The current 3.7-percent unemploy- job creation is likely to fade gradually. growth, a high saving rate and high for the rst half of 2019, with business tion,” Goldman Sachs said. ment rate is at its lowest point since The rm said monthly payroll growth con dence.” continuing to expand through the sec- “Robust job creation should push the 1960s, according to The Confer- has averaged 215,000 over the last six The CBO expects growth of actual ond half of 2019,” said Timothy R. the unemployment rate to 3 percent ence Board, a think tank of senior months and predicts that it is unlikely output — driven by consumer spend- Fiore, chair of the ISM manufactur- by early 2020, well below our 4.5-per- corporate executives across various to slow down until early 2020. ing and, to a lesser extent, business ing business survey committee. cent estimate of full employment, the industries. “By then we expect the unemploy- investment — to outpace the growth “In 2018, manufacturing experi- rate consistent with 2-percent ina- The tight labor market has helped ment rate to have declined to 3 percent, of its maximum sustainable amount enced 12 straight months of growth tion. Wage growth should reach 3.25 increase average wages and salaries well below our 4.5-percent estimate through 2019, creating excess demand from December 2017 through Novem- to 3.5 percent in this environment.” by more than 3 percent during the of the full employment rate consistent in the economy. Although this leads to ber 2018, resulting in an average Pur- The Congressional Budget Of ce past year, thus improving consumer with the Fed’s 2-percent ination tar- lower unemployment rates and higher chasing Managers Index of 59.2 per- (CBO) predicted in August that real con dence and spending. get,” a Goldman Sachs report said. income, the CBO noted, it also creates cent, as compared to 57 percent for the U.S. gross domestic product (GDP) However, higher labor costs low- “Other indicators support this pic- demand for goods, services and labor 12 months ending November 2017, as in 2018 would grow 3.1 percent due er business pro ts, according to the ture of one of the strongest labor mar- that exceeds the economy’s long-run reported in the monthly Manufacturing to increases in government spending, Board, noting that rising wages also kets in memory. The number of job capacity to supply them.” ISM Report On Business.” reduction in taxes and faster growth put upward pressure on ination, openings per unemployed worker, the Excess demand will put upward Respondents said they expect in private investment. However for forcing the Federal Reserve to raise quit rate, household reports of the ease pressure on prices, wages, and inter- raw-materials-pricing pressures in 2019, the CBO predicts GDP growth interest rates faster to keep ination of nding a job and employer reports est rates over the next few years, the 2019 to increase, and expect their to slow to 2.4 percent amid a slow- near its 2-percent target. of the dif culty of nding workers all CBO predicted, but growth of actual pro t margins will improve in 2019 down in business investment and gov- Federal tax cuts and increased gov- suggest that workers’ bargaining pow- output should slow markedly after over 2018. Manufacturers also are ernment purchases. ernment spending have helped boost er has increased,” Goldman Sachs said. 2019 because higher interest rates, predicting growth in both exports and The U.S. economy in 2018 exceed- growth in 2018 but are also stretching “Based on these signals, recent ac- along with the slower growth of fed- imports in 2019. ed the IU economics panel’s predic- the capital and labor resources of the celeration in the highest-quality wage eral outlays. As the excess demand Respondents also expect raw-ma- tions a year ago that GDP would grow economy and will provide less support indicators, the rise in our wage sur- dissipates, the unemployment rate ris- terials prices will increase by 3.5 by 2.6 percent or by about 3 percent if for growth in 2019 as the effects taper vey leading indicator and the larger es and ination and interest rates fall, percent during the rst ve months tax reforms were enacted. off during the year, the Board said. pick-up in wage growth in the more so by 2022, the excess demand in the of 2019, with an overall increase of “The tax cut has produced an ac- A year ago, the IU panel expected cyclically sensitive lower half of the economy disappears, the CBO said. 3.3 percent for 2019, compared with celeration in the U.S. economy during the U.S. economy would create jobs income distribution, we expect over- The CBO expected business invest- a 2-percent annual increase in 2018. 2018 to well above the new normal at a monthly rate of about 175,000 and all wage growth to reach 3.25 to 3.5 ment to increase 8.9 percent in 2018, Meanwhile, 57 percent of non-man- status quo of 2-percent growth,” Bill that the unemployment rate would percent (in 2019).” versus 5.3 percent in 2017, fueled by ufacturing supply management execu- Witte, associate professor emeritus of fall to 4 percent. Instead, monthly job several factors, including: increased tives said they expect a 3.7-percent net economics at IU, said. creation through September averaged Spending incentives for investment under the increase in revenue for 2019 compared “We expect output growth in 2019 nearly 200,000, and the jobless rate 2017 tax act; the accelerated growth with a 4.5-percent increase reported for to average 3 percent, but with de- fell to 3.7 percent. The IU report forecasts consumer of output spurred by the tax act and 2018 over 2017. celeration as the year proceeds. By These job-creation trends are ex- spending will continue to grow, al- federal outlays; a rebound from weak Seventeen industries are expecting this time next year, quarterly growth pected to continue into 2019, with though at a lower rate than in 2018. inventory investment in late 2017; increases in revenue in 2019, including: will be heading toward equilibrium average monthly gains of 200,000 Business investment will be posi- greater incentives for oil exploration mining; agriculture, forestry, shing growth at a little below 2.5 percent.” jobs, and the participation rate — tive, but held back by trade concerns, and development; and the easing of and hunting; construction; wholesale; The IU analysts put a proviso on which measures the percentage of the while government spending will be federal regulations. retail; and transportation and ware- their forecast, noting the uncertain U.S. population that was employed or strong early in the year, but slow sig- However, the business investment housing. impact of future political agendas, looking for a job — remaining at, ni cantly toward year-end. rate is expected to slow between 2019 “Non-manufacturing supply man- trade disputes and global economic according to IU. The IU report said the 2019 econo- and 2022 as most of these factors dis- agers report operating at 88.4 percent concerns, especially in China and Employment growth is predicted my will pretty much mirror 2018 with sipate. In particular, the tax act incen- of their normal capacity, higher than Europe. to continue at about 200,000 jobs real GDP growth at the same 3-per- tives decrease each year after 2018 the 85.5 percent reported in May IU analysts said they expect the per month through 2019 and with an cent rate, with consumption expected and thus could lead to less growth in 2018. They are optimistic about con- economy to decelerate mid-year to- unemployment rate of 3.5 percent by to grow at about 3.1 percent. Business investment, according to the CBO, tinued growth in the rst half of 2019 ward a long-run growth rate of about mid-year. investment is forecast to increase 5.5 noting also that scal stimulus provid- compared to the second half of 2018, 2.5 percent, due to lower growth in “The labor market will be increas- percent, while the housing market will ed by federal spending is expected to with a projected increase in growth government spending as the budget ingly tight,” IU’s Mr. Witte said. “The remain relatively at. diminish while an increasing supply rate for capital reinvestment,” said deal runs its course and a slowdown unemployment rate could decline a “We project business investment growth of oil puts downward pressure on oil Anthony Nieves, chair of the ISM in employment growth as demo- little, but rms unable to nd workers of about 4 percent, supported by strong prices and investment in oil drilling. non-manufacturing business survey graphics eventually pull down growth will remain an important theme.” demand growth, fairly easy credit condi- committee. in the labor force. An aging population means slow- tions and healthy business con dence,” Manufacturing “They forecast that their capacity “The economy heads toward 2019 er labor force growth, according to according to Goldman Sachs. to produce products and provide ser- with considerable momentum from The Conference Board, especially “Strength in these areas should be Several manufacturing and non-man- vices will rise by 2.9 percent during scal stimulus and a very strong among older workers who are retir- only partly offset by drags from net ufacturing sectors in the U.S. are ex- 2019 and capital expenditures will labor market. Our baseline forecast ing in large numbers from jobs not trade and continued weakness in the pected to enjoy continued growth in increase by 3.4 percent from 2018 is that this momentum will carry requiring college degrees. Business- housing sector. While further escala- 2019, according to the Institute for levels. Non-manufacturers also pre- us through most of next year be- es will have to help workers become tion of trade tensions with China ap- Supply Management (ISM), which dict their employment will increase fore slowing to a more sustainable more productive through well-chosen pears likely, we have found minimal surveyed purchasing and supply man- by 2 percent during 2019.” growth rate. investments and improved business effects on the U.S. economy so far agement executives. Survey respondents expect the pric- “So for the immediate future we practice, the Board warned, predict- and the next steps should have only a About 64 percent of survey respon- es they pay for materials and services think it will be ‘Laissez les bon temps ing that between 2019 and 2028, the modest impact on growth unless they dents said they expect revenues to be will increase by 3.6 percent during rouler.’ (Let the good times roll.) The U.S. economy will average 2.1 per- affect U.S. business con dence and greater in 2019 than in 2018, with a 2019 and that their overall labor and question is what the hangover will be cent annual growth, only if business- risk assets much more adversely than 5.7-percent net increase in overall bene t costs will rise 3.2 percent. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 19

Repair shops to see more imports, CUVs in bays By Kathy McCarron the traditional channels of getting your “Overall, as individuals, we’re tak- truck body styles, Mr. Seng said. In “Domestic and Detroit 3 have the li- Tire Business staff products in the hands of the consumers. ing 10 percent fewer trips now than we 2018, light trucks were expected to ac- on’s share of the volume of the older ve- And we’re seeing this in a lot of other did nine years ago, in 2009. There’s count for 70 percent of sales. hicles, so they are getting scrapped out LAS VEGAS —Independent vehicle repair industries, not as much in auto.” more people on the road driving, but “It’s driven by a big shift to cross- at a much faster rate. Imports are being shops will be seeing growing numbers Mr. Shipley gave the example of as individuals we’re driving less. So overs, SUVs and small SUV-type body purchased at a faster rate. ... So anybody of older vehicles, import brands and MacNeil Automotive Products Ltd., your audience has grown quite a bit styles,” Mr. Seng said, noting that con- who is focused on repairing import ve- light trucks and CUV/SUVs pulling which sells its WeatherTech vehicle and who you’re targeting is growing sumers are attracted to larger vehicles hicles, you have a very good outlook for into their service bays in the coming oor mats directly to the consumer. quite a bit,” Mr. Shipley said. with fuel-ef cient four-cylinder en- auto repair of those vehicles.” years, according to market analysts. Private brands are grabbing a larger The biggest reduction in trips are in gines. IHS Markit and NPD Group Inc. About 56 percent of all light vehi- Vehicle age analysts, during presentations at the ‘The economy is strong; the cles sold have four-cylinder engines, 2018 Automotive Aftermarket Prod- aftermarket is strong; we should feel he said. Between 2018 and 2023, IHS pre- ucts Expo (AAPEX), both noted these He assured those in the automotive dicts the number of vehicles that are trends in the vehicle parc can have a good about our industry as a whole.’ aftermarket that they need not worry new to 5 years old in the VIO will positive impact on the automotive after- Nathan Shipley about recovery in new vehicle sales. grow 2 percent, vehicles 6-11 years old market for those who adapt their oper- Executive director and industry analyst for NPD Group Inc. “I think any time we’re adding will grow 27 percent and vehicles 12- ations and marketing strategies. new vehicles (into the market), that’s 15 years old will decrease 27 percent. Mark Seng, IHS Markit’s global af- share of the market, he noted. areas of shopping and general errands, just like our new business pipeline, if Meanwhile vehicles 16 years or old- termarket practice “A lot of retailers in a lot of catego- he noted. “We see a 10-percent drop you will. Because all that new vehicle er will grow 22 percent and will reach leader, automotive, ries are pushing their own brands of in social and recreation. ... Social in- growth is driving VIO growth. Total the same size as the newest (0-5 years) noted a growing products out there, which to the con- teraction with the iPhone and Android eet continues to increase as well,” vehicles — “That’s never happened shift in purchases sumer, do they know it’s a private label have contributed to that.” Mr. Seng said. before. So a big shift to these oldest of new light trucks or not? For all they know it’s just an- He noted that analysts believe VMT “We see the VIO, the total eet that vehicles ... and a great thing for the af- and CUVs at the other brand on the shelf,” Mr. Shipley is going to change in two ways by we are responsible for repairing, where termarket,” Mr. Seng said. expense of com- said, noting that Amazon.com Inc. has 2040: in the type of car driving those we make all our money, is increasing In 2018 there were about 69 million pact cars. launched its own brand of motor oil. miles (whether autonomous or tradi- by 8 percent over this forecast window vehicles aged 16 years and older; by In 2017, light tional vehicle) and who owns the ve- (through 2023).” 2023 that number will hit 84 million, trucks/CUVs ac- Seng 2019 forecast hicle (whether an individual or a eet). While U.S. VIO growth is slower IHS predicts. counted for 65 per- VMT was growing at just under 2 than the predicted global VIO growth “The average age of the vehicle in cent of vehicles in operation (VIO) in the “Our forecast for 2019 is that we percent a year ago, according to NPD rate of 13 percent, it is still a healthy the United States has been increasing U.S.; in 2018 that share was expected to expect the market to be at for 2019,” data. Today it’s trending at 0.5-percent rate for a mature market like the U.S., ever since vehicles began rolling off grow to 70 percent. said NPD’s Mr. Shipley, noting that growth. This follows several years he said. the Henry Ford assembly line — bet- Overall new vehicle sales have lev- the miles-driven growth rate has where gas prices dropped and more Four body styles represent 64 per- ter quality, better parts, better compo- eled off since hitting record highs in slowed, prices have increased 4 to 5 people were going back to work, con- cent of all new U.S. vehicle registrations nents, less rust — all that kind of stuff 2015-16. About 17.2 million new ve- percent and the consumer price index tributing to a healthy growth rate in in 2017: compact CUV (23 percent), have made the vehicles last longer,” hicles were sold in 2017 and IHS pre- for new cars has stabilized. miles driven, Mr. traditional compact cars (15 percent), Mr. Seng said. dicted the total would slip 0.6 percent “The economy is strong; the after- Shipley said. full-size pickup trucks (14 percent) and Consumers are holding onto vehicles to 17.1 million in 2018. market is strong; we should feel good “My belief as to traditional midsize (12 percent). longer and nancing vehicles for longer About 34 percent of these new ve- about our industry as a whole,” he the reason why this “What’s interesting is those same term, and this all accelerates the aver- hicles sales were compact and tradi- said. has slowed down in four segments have represented about age age of the U.S. eet, he said. tional CUVs, he said. “With that said, the core consum- the last 18 months 64 percent for the last ve or six years While older vehicles tend to be ser- Meanwhile, sales of import brands er is changing and how our consum- is we hit our new or so. However, within those four seg- viced at independent service shops, of vehicles (by OEMs with headquar- er shops our industry and shops our normal. We’re not ments, we’ve seen a huge shift to that those shop owners need to be aware ters outside the U.S.) are expected to categories are changing, so thinking slowing down on compact CUV,” Mr. Seng said. that repair opportunities change as the continue outpacing the Detroit 3 vehi- about how your business looks down our miles-driven Shipley Compact CUVs have grown to 23 vehicle gets older, Mr. Seng said. cle brands, he said. the road, especially ve to 10 years behavior. We’re just percent of new vehicle sales today Repair shops may be dealing with In 2018, imports were expected to from now, I think will be critical to at our new level,” Mr. Shipley said. from 15 percent in 2014. Add in mid- the second or third owner of an older account for 46 percent of new vehicle your long-term success, especially as “So half a percent is where we think sized CUVs and the CUV segment vehicle who may not want to spend as sales and by 2023 they are expected to we watch other industries in the past it’s going to stay for the short term, bar- accounts for 34 percent of all new much on maintenance and repairs. So account for nearly half of sales. go down this path of disruption.” ring anything crazy happening in the light vehicles sales. Meanwhile, the shops will have to develop “good-bet- While sales of new vehicles are pla- He noted several inuential trends economy … ,” he added, noting that the share of full-sized pickup trucks has ter-best” options for these owners. teauing, vehicles on the road are con- in the market, including mobile car federal government had forecast that remained relatively unchanged. “The aftermarket needs to look be- tinuing to age as consumers hang on to services, tire installation chains part- the average miles-driven growth rate is “As consumers ocked back to the hind the trends and understand what their older vehicles. The average age of nering with online retailers, growth going to be about 1 percent every year dealerships and drove those light vehi- that impact is in the relationship be- vehicles in operation has risen to 11.7 of private label brands, expedited de- for the next 20 years. cle sales to record levels, the decisions tween the person that threw the box years. livery and the Roll by Goodyear tire Gas price uctuations don’t seem to they’re making about the types of away, if you will, the person that is About 40 percent of the VIO are showroom concept in urban markets. have an impact on consumer driving vehicles they’re buying is changing,” actually repairing the vehicle and that vehicles that are 12 years or older and behavior, he noted. Mr. Seng said. “And that is having an consumer. about 26 percent are vehicles that are Driving trends “We’re around $3 per gallon on av- impact on our VIO eet and the types “As the vehicle ages and that con- six to 11 years old. erage and we’re not seeing behavior of vehicles that are entering the repair sumer changes, you need to make sure That bodes well for independent re- Vehicle miles traveled (VMT) is a changes at retail. We’re not really see- bays in the near future. that your marketing to them correctly, pair shops for years to come as they are major driver for the aftermarket busi- ing behavior changes in the miles-driv- “We see the trend continuing for the that you have the right parts and strate- usually the ones that repair out-of-war- ness, according to IHS’ Mr. Seng. en environment and our thought behind next three or four years and beginning gy and everything else in order to take ranty vehicles, Mr. Seng said. During the Great Recession (2008- this is that we have, as consumers, seen to level out and end up at 75-76 percent advantage of these new repair oppor- “On the consumer side, one of the 09), VMT attened and declined for this before. This is not new,” Mr. Ship- will be light trucks over cars,” he said, tunities,” Mr. Seng said. biggest challenges we are facing as an the rst time since the 1970s. ley noted. adding that this trend explains why He noted that vehicles 6 to 15 years industry is opposing forces,” said Na- Over the last three to four years the “Gasoline prices have been all over OEMs are shifting production away old are de ned as the aftermarket than Shipley, executive director and VMT has recovered and was expected the map the last 10 years. They’ll come from sedans. “sweet spot” where most of the repair industry analyst for NPD’s automo- to hit a record 3 trillion miles in 2018. back down. And we have a strong From 2015-2025 there is going to be opportunities occur. tive aftermarket division. But the growth rate has been slowing economy. Those two things coupled a 95-percent increase in the number of “If you’re a marketer, if you’re a down — to about 0.4-percent in 2018 together is why we don’t believe the CUV body-style models available in Dollar vs. unit sales manufacturer, a retailer, you’re still try- versus a 1.3-percent increase in 2017. current gasoline price environment is the U.S., he predicted. ing to market your products and services Among the biggest inuences for having an impact on miles driven,” he For the rst eight months of 2018, af- to the boomer generation that’s on the VMT are gas prices and the unemploy- said. Domestic vs. import termarket dollar sales (chemicals, bat- way out, so to speak in terms of their ment rate, he said. In addition, the large teries, lters, wipers, etc.) were growing peak driving years, if they retire. And baby boomer population is retiring and Vehicle mix The U.S. VIO over time will see at a 4-percent rate, according to NPD. you’re also trying to market to a millen- not driving as much while younger peo- a steady increase in import vehicle “It’s a healthy, healthy growth rate,” nial generation that is coming into their ple are moving into walkable neighbor- U.S. light vehicle sales are expected makes, according to IHS. Mr. Shipley said, but conversely unit peak driving years now. And so it’s an hoods and reducing their VMT. to level off after reaching a record 17.6 In 2002, imports accounted for 28 sales fell 1 percent. opposing force. But the number of licensed drivers million in 2016 and then fell to 17.2 percent of VIO; today it stands at 46 “The story for this industry for “Another opposing force that we have on the road is growing, according to million in 2017. IHS predicted vehicle percent; by 2023, it will be 49 percent some time has been that dollar volume as an industry is that manufacturers are Mr. Shipley. sales would hit 17.1 million in 2018. of the vehicles in the U.S., according has always been outperforming unit looking at direct-to-consumer,” he said. “But you look at the miles-driven There also is a growing shift in sales to IHS. volume. We’re selling less stuff for You have a brand that is strong enough, trend, it’s the highest it’s ever been, but to SUVS and light trucks from sedans “What’s happening is most of the more money. And when you look at that can stand on its own without retail the growth rate has slowed down fairly Only 35 percent of the light vehi- vehicles being scrapped over this time the price side of the equation, prices in support and you’re trying to nd ways dramatically, which is a bit of a head- cles sold in 2017 were the sedan body period are domestic makes,” Mr. Seng aggregate across those categories that to go direct to consumer to circumvent wind for us,” he said. style while about 65 percent were light said. See Sales, page 22 Pearson

20 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com

Tire dealers cautiously optimistic entering new year By Jennifer Karpus-Romain Vermont, said the company entered The private label tires will go up, a real big push as far as my numbers Tire Business correspondent 2018 with “dynamic changes.” he added, and that just gives the major going up,” Mr. Scheeler said. “We stepped into 2018 with a plan to brands a good reason to raise prices, too. “We’re staying steady. For an inde- nother year has ended and better ourselves, to pay greater attention “In all my 20-plus years in this in- pendent, we’re doing pretty good . … most tire dealers experienced to the needs and wants of all our clients, dustry, we have been faced with tariff We work. We are here every day. We Aa steady year, while others and our sales leave me feeling we ac- issues coming and going,” Mr. Mad- watch what we do, and we try to keep saw tire sales tick up in 2018. complished that goal,” he said. den said. up with the trends.” Dealers, both large and small, for Mr. Madden said the retail side of Many smaller haulers and oth- Mr. Scheeler said nancing is a big the most part are waiting to see how the business exceeded expectations in er similar industry consumers who issue, too. industry changes will affect business 2018. count on affordable products for their “Financing tires and wheels is in the new year. eet face the greatest challenges re- starting to be a big thing and even - Dan Pearson, owner of Northwest garding tariffs, he said. nancing service,” he said. Tire Inc., which operates tire stores “It seems that the trend of the mar- “Hopefully wheels will pick up a throughout North Dakota, Minnesota little bit more this year than they have. and South Dakota, said tire sales were It is a little hard with the internet sales, up 7 percent over 2017, close to his Ogle of course, on wheels, but we’re hoping projections for the year. that that will pick up a little bit also.” “(We had) a very strong year in all Mr. Ogle agreed that online sales commercial sales,” he noted. continue to grow. For C&D Tire, with ve locations “Online tire shopping is increasing in Tennessee, 2018 was a good year. in popularity, and even from the be- “We projected numbers 5-percent ginning of 2018 to the end, we have higher than the previous year and ex- seen more people using the Goodyear ceeded projections,” said David Ogle, e-commerce option to purchase tires,” sales manager at C&D Tire – Knox- Madden he said. ville. Yet, he anticipates C&D Tire to “Last year (2017) we met our pro- have more of an online presence in jection, but we decided we could do Riechers the new year. better, so we set a higher goal and “We just recently launched a pro- projection and used our strategy to ket is that as the increase on these im- gram that allows for real-time pricing exceed them. As we look forward to Pearson ported goods happens, the rest of the to consumers,” Mr. Ogle said. 2019, we have set the bar even higher market follows behind. It’s leveling the “Our hope is that this program will and hope to exceed projections again.” cost playing eld, but only hurting the allow consumers to quickly compare He noted C&D introduced a working consumer,” Mr. Madden said. and decide on tires from the comput- road-hazard program in 2018, and its While Mr. Pearson expects to see er or mobile device and speed up the success was a pleasant surprise. a continued increase in sales, there is buying process.” “Our goal was to sell two road haz- uncertainty in supply with the pend- Mr. Madden expects a growth in ard packages a week, and by the end ing tariffs. online tire, service request and ap- of the year we are averaging one pack- Fordin “We did see a price increase across pointment booking. He noted that age a day,” Mr. Ogle added. the board this summer/fall,” Mr. Ogle consumers love the ability to shop Shannon Scheeler, owner/operator “I hold that to our grand efforts in said. “I’m sure this is due to multiple from the convenience of their phones at Nevada Tire City in Las Vegas, said stepping deeper into the waters of so- factors, including the tariffs. So, I and “the days of people driving tire sales were even with 2017. cial media advertising, attaining and don’t think the tariffs will be the only around and stopping at shops looking “It was almost identical. My num- interacting with clients via e-mail reason for the price increases.” for the best deal are over.” bers are actually almost exactly the campaigns and, of course, by servic- “Online responding has become same from (2018 to 2017). Almost to ing the public with honest and fair rec- Competition the new meet-and-greet with current the exact dollar,” he said. ommendations on keeping their trans- Scheeler customers and future ones,” Mr. Mad- Audra Fordin, owner of Flushing, portation safe on the roads,” he said. business, but he does expect challeng- Mr. Riechers said the biggest mar- den added. “Make those encounters N.Y.-based Great Bear Auto & Body es with distribution next year “and an ket trend is “complicated and fright- count. It is the new way.” Shop — who also heads Women Auto The ATD effect increase in expenses,” he said. ening” competition from major con- Know, a free membership-based site “I wouldn’t say dif culties; I would glomerates and car dealerships. Popular tire sizes that aims to educate and empower The dif culties of North Amer- say changes,” Mr. Riechers said. “Over the past ve years, there has women of all ages — said her shop saw ica’s largest wholesale tire distribu- “There’s going to be a lot of chang- been a push by the tire manufacturers CUV and LT tire sizes are continu- a 2-percent increase in sales over 2017. tor, American Tire Distributors Inc. es, and I’ve been warned of that, but to deliver tires to the car dealers, and ing to dominate the market over their There was one area of her business (ATD) (see story, page 1) seem to have I don’t know if they are going to be they are indeed gaining market share,” car-sized counterparts. that performed better than expected. had little impact on some dealers. dif culties or not.” Mr. Riechers said. “Amazon and online “We have seen a tremendous in- “People are still using bulk oil instead In fact, Ms. Fordin said she has not Other dealers contacted were not sales are also a beast to be dealt with as crease in our light truck tire business,” of the recommended synthetic motor been impacted at all. “As a customer of big ATD customers. well. But what is more alarming to me said Mr. Madden. oil,” she said. (ATD), they haven’t missed a beat in “They were not a big vendor of is the overall distribution structure. “More and more eets are growing While sales for some dealers were service or delivery,” she said, adding mine,” Mr. Riechers said. “The ATD “If the wholesalers like TireHub in the Capital Region of New York. stagnant, others experienced an in- that she is not anticipating any distribu- situation to this point has had very lit- (the distribution joint venture between With more and more luxury perfor- crease. tion dif culties in 2019 with ATD. tle impact on us.” Bridgestone and Goodyear) and Am- mance-type vehicles driving through “Overall sales were up in both Mr. Ogle said C&D Tire’s own- Mr. Ogle does not foresee distribu- azon start funneling tires to compa- our shops, there is a great increase in our stores,” said Matthew Riechers, er, Dennis Dossett, has worked hard tion issues in 2019. ny-owned stores or inuencing where 18-inch and larger diameter tires be- manager at Washington, Mo.-based to set the company up with multiple “There are more distributors in our these tires are delivered for installation, ing sold.” Riechers Tire & Auto. distributors in Knoxville, regionally, area than in the past, and with fuel independent tire dealers are going to He said consumers are more edu- “I think it was probably better than nationally and internationally. costs coming down, 2019 could be suffer,” he said. cated and making wiser choices with what I expected. Sooner or later, I am “ATD is one of our distributors, and one of the smoothest years we have “Independent tire dealers have been their tire purchases, not just looking waiting for the online sales to really we have continued to use them the seen in a few years,” he added. able to adapt to changing trends that for the best price. hit us hard, and they haven’t so far.” same way before and after their tran- Mr. Riechers said several wholesal- over the years have been relatively “We went through such a trend of He expects sales to remain at or sition,” he said. “They have always ers have warned him about potential slow, but internet and the distribution consumers wanting the cheapest tire decrease in 2019, considering com- been good to us with their service and distribution problems if further tariffs structure is changing relatively fast, to looking for trusted quality with a petition from online tire sales. Mr. dependability.” are implemented. which compounds the problem.” name that is recognized in all house- Riechers was impressed with his Mr. Madden said Adirondack Tire “To this point, I have not seen any Mr. Scheeler agreed. holds,” Mr. Madden said. shops’ repair business. has not been impacted because he’s major dif culties, but several vendors “I think the economy is getting bet- “In this day when digital informa- “It seems year after year, I’m shocked “never put all my eggs in one basket.” do have less inventory that usual, so I ter, but I don’t think it’s as good as they tion is all the rage, people research at how well our repair is,” Mr. Riechers “I believe to be best prepared for do expect it to become an issue mov- are saying it is,” he said. “I believe com- before any purchase. I nd this to be said. these kinds of situations is never align ing forward.” petition for the independent tire dealer, a great thing. “Given the fact that there’s so much yourself with one supplier. Always like myself, is getting harder and harder “Consumers ask lots of questions, competition between the chain stores keep healthy relationships with as Tariffs incoming to compete with the larger corporations and when you are educated on the and the online and the dealerships try- many as you can,” he said. that are moving in.” products you sell, not only does it ing to gain market share, the fact that Mr. Scheeler said the ATD situ- Tire dealers almost all agree that He said “it’s a constant ght” since strengthen your abilities, it allows you we keep growing tire sales between ation has not affected him and he more tariffs will hike prices. name-brand manufacturers are not fo- to help your customer properly and our two shops surprise(s) me.” doesn’t foresee any future distribution “Absolutely. No question about it,” cusing on the smaller dealers, just larg- builds a trusted relationship.” David Madden, director of oper- dif culties. Mr. Riechers said. “Several of my er companies. Mr. Ogle is seeing an increase in ations, Adirondack Tire & Service, Mr. Pearson told Tire Business it wholesalers come in and visit on a “My business has been pretty good larger rim sizes as well. with 12 locations in New York and is too early to tell how it could affect regular basis have already warned us.” the last three years, but I’m not seeing See Dealers, page 22 Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 21

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Sell it in Lakin Tire West Lakin Tire East (800) 488-2752 (800) 368-8473 TIRE www.lakintire.com BUSINESS 22 • January 7, 2019, TIRE BUSINESS Visit us on the web at www.tirebusiness.com Sales grow for private-label products Continued from page 19 we’re starting to see this penetrate 30-percent range by six years from we’re tracking are up almost 5 percent in a lot of categories that have other now. So we’re going to see a slow but this year,” he said. brands that have a very strong pres- steady migration online ... barring any Among the top growth categories, ence on the shelf,” Mr. Shipley said. major disruption in our industry, … maintenance products sales are increas- 15 percent today in the aftermarket, Tire retailer ing while accessories are decreasing. E-commerce going to somewhere between 25 to 30 On the price side, the majority of percent down the road.” categories are seeing pricing activity While online sales are disrupting He said there are many reasons sentenced of some sort, he said, including tires, many retail industries, it seems to why e-commerce won’t overtake wheels and accessories. have minimal impact on the automo- brick-and-mortar auto repair shops: Continued from page 16 Sales of private-label products in- tive aftermarket, according to NPD’s the immediate need for parts, such ling for an injunction against the creased about 9 percent in 2018, dou- Mr. Shipley. as when a car breaks down on the agency. ford, Texas, determined Michelin ble the growth rate across the indus- For the automotive aftermarket, side of the road; tactile importance In another government-related case, was blameless in a product liability try as a whole, according to NPD. e-commerce has seen a 24-percent (the need to see, touch and feel the a Florida tire retailer was sentenced to lawsuit involving the failure of a BF- Units increased about 7 percent as growth rate. part you’re buying); size and t con- a year and a day in prison after plead- Goodrich Rugged Trail T/A tire. distribution, while relatively small, is “A lot of that is volume shifting over straints; delivery options; and ease ing guilty to excise tax fraud. The plaintiff argued that the tire growing, Mr. Shipley said. to e-commerce,” Mr. Shipley said. “It of returns. Nestor Bastidas conspired to fal- was defective, but Michelin proved “We’ve seen an increase in (private is not organic growth year-over-year. “There are a lot of challenges with sify bills of sale on tires, saying they in court that the tire had more than label) distribution of 100 percent. So I expect that number to stay that way e-commerce for our industry that I were exported to the Dominican 80,000 miles of wear, as well as im- distribution of private label has dou- for awhile. believe will keep it from growing to Republic when they really were sold pact damage from a previous inci- bled in the last two or three years. It “Our expectation for automotive is the 40 to 50 percent of our business,” in the U.S., according to the Internal dent. was in chemical categories, … but that we’ll be somewhere in the 25- to he said. Revenue Service and the U.S. dis- In the second, Michelin settled out trict attorney for the Southern Dis- of court with Tire-Mart Inc., d.b.a. trict of Florida. Two co-conspirators Braven Off-Road, in a design patent also pleaded guilty. lawsuit. Growth continues in marketplace In non-government cases, a long-run- Michelin claimed St. Louis-based ning trade dress infringement case in- Tire Mart infringed on Michelin’s Continued from page 11 tions in Arizona, New Mexico and Texas; volving Toyo Tire & Rubber Co. and Patent No. D530,266, the tread de- acquisition of Midas shops in Appleton, Wis., and Auro-  Intermodal equipment provider TRAC Inter- several Doublestar companies from sign for Michelin’s BFGoodrich ra, Colo., growing its network of franchised Midas stores modal acquired assets relating to the tire services di- China saw action in 2018. Mud-Terrain T/A KM2 tire. to 87 stores in 15 states, including a handful of Midas/ vision of Core Fleet Inc. and established TRAC Tire Toyo led suit in 2015, claiming In another product liability case, a Speedee Oil Change co-branded sites in the Chica- Services L.L.C. to oversee the new business, which the Doublestar companies infringed Philadelphia jury in October returned go metro area. The group also operates a dozen will operate out of a 102,000-sq.-ft. facility being on the design of Toyo’s Open Coun- an $11.7 million verdict against a Big O Tires stores and one standalone Speedee # set up in Florence, Ky. The facility will have dou- try M/T premium off-road light Pennsylvania concrete products com- Oil location. 5 ble the retread manufacturing capacity of the as- truck tire. pany in the matter of an allegedly de- Telle Tire & Auto Centers grew to nine locations sets acquired, which had been operating as Retread In April 2018, a judge in the U.S. fective Bridgestone L315 truck tire. via acquisitions: Midtown Tire & Auto in St. Louis, America since 2008 under Core Fleet’s ownership; and District Court for the Central District The woman who sued lost an arm Shamel Auto & Tire in Bridgeton, Mo., and Kwik Kar  Pneus Metro Inc. of Montreal acquired a GCR of California partially granted Toyo’s in the accident, and her infant daugh- & Lube in Jefferson City, Mo., its rst location outside Tire retread plant in Farnham, Quebec, as part of a motion for summary judgment in the ter a leg. Several other defendants, of the St. Louis market. broader expansion that includes opening a green eld case. including Bridgestone Americas Tire Among commercial tire dealers and retreaders: commercial sales and service depot in Quebec City Toyo then sought treble damages Operations and Bridgestone Bandag,  Purcell Tire & Rubber Co. acquired the operat- and expanding the Farnham site to accommodate new against Doublestar Dong Feng Tyre settled out of court without admitting ing assets of Northwest Retreaders of Gresham, Ore., tire sales and vehicle servicing as well. Co. Ltd. and Qingdao Doublestar In- liability. in a move that strengthens Purcell’s still burgeoning On the manufacturing front: dustrial Tire Co. Ltd. under the Lan- The Ninth Texas Court of Appeals position in the Paci c Northwest and effectively dou-  China’s Qingdao Doublestar Group concluded ham Act, which forbids trademark excused Bridgestone Americas Inc. bles Purcell’s OTR tire retreading capacity; its acquisition of a 45-percent ownership stake in South infringement, trademark dilution and and Ford Motor Co. from a product  Quality Tire Co. of Denver acquired three TCi Korea’s Kumho Tire Co. Inc., closing an 18-month false advertising. liability case in February. Tire Centers commercial service locations and an chapter of uncertainty in Kumho’s 58-year history. The Doublestar companies in turn Reversing a county circuit court, MRT retread plant in Colorado from Michelin North Doublestar bought into Kumho by acquiring Korea led for partial summary judgment the appeals court said that because America Inc., expanding the dealership’s reach to eight Development Bank’s stake in Kumho Tire through a against Toyo on the treble damages the accident in question occurred in locations and three retread plants in three states. Salt $607 million private placement; and issue, claiming that Toyo misrepre- Mexico, Texas courts have no juris- Lake City-based Quality Tire is a Michelin dealer and  Continental A.G. acquired full ownership of Sri sented the case to bolster its fraud diction. Oliver Rubber-af liated retreader; Lankan solid tire maker Eu-Retec (Pvt) Ltd., buying the claims. The judge agreed and grant- Also in February, Monro Inc.  El-Paso, Texas-based Border Tire acquired ve 49-percent stake it didn’t own from the company’s man- ed the Doublestar motion in June. agreed to pay $1.95 million to settle TCi Tire Centers commercial service locations and one aging director. Conti has been a joint venture partner of Two high-pro le cases involving an eight-year-old class action suit re- MRT retread plant in California from Michelin North Eu-Retec since 2009, saying at that time the venture was Michelin North America Inc. were lated to unpaid wages and overtime America. Border Tire is a Michelin dealer and Oliver formed to supply customers in North America and Eu- decided early in the year. In one, a for former technicians and assistant Rubber-af liated retreader with ve commercial loca- rope with solid tires. jury in a district court in Weather- store managers. Dealers say mobile services haven’t affected business yet Continued from page 20 I don’t think they will, of course, be so many tire stores. You can go just own mobile service truck, “so we are we might try a few employees before “Car and truck manufacturers are gone. I think they will still be a big about anywhere, in any area, and get competing in this area.” we nd the right t. We are pretty se- building vehicles with larger OE wheel seller, but there’s some other sizes that to a tire store pretty quickly. I thought lective as we want our employees to sizes, so we are seeing more 18- to 20- will be coming up with all the new about doing the mobile service thing, Quali ed help live and work to a high standard.” inch sizes being ordered and sold,” he crossovers and the crossovers that are but I backed off on it. I don’t think it’s Mr. Pearson said nding quali ed said. “There are trucks that are being out there.” there for our city yet.” One common challenge among deal- employees is his biggest concern head- equipped with 22-inch wheels as stan- Mr. Riechers said the top three siz- Mr. Madden said mobile tire ser- ers is nding quali ed help. For some ing into 2019. “The problem seems to dard equipment, so I believe the larger es he sees are 265/70R17, 225/65R17 vices have not impacted Adirondack it’s nding entry-level positions and for be too many job openings, not enough size wheels and tires are going to con- and 275/55R20. “That goes to show Tire because he feels consumers don’t others, it’s an all-around problem. people,” he said. tinue in 2019.” you what’s going on with the market. trust it. “I’ve got a good core group of em- Mr. Madden is concerned about the Mr. Pearson has seen an increase in “Years ago, it was car tire sizes that “It’s like all the people still trying ployees that have been with me for a absence of service technicians. CUV sizes and expects more growth, were more popular.” to go door-to-door to have you sign up while,” Mr. Riechers said, while add- “A trend I believe is that in all labor especially for all-weather tires. for a house remodel or a window up- ing he struggles to nd oil change/tire industries, the coming-of-age gener- “They perform much better in win- Mobile tire service date,” he said. technicians. ation has less interest in growing in ter conditions than regular all-season From a consumer’s viewpoint, Mr. “I try to stick to word-of-mouth be- these roles,” he said. tires and for some, eliminate the need Most tire dealers interviewed by Madden said mobile service “might cause that’s about the only way I can “It’s always a struggle to ll posi- for snow tires,” Mr. Pearson added. Tire Business are not competing be a  y-by-night” venture and won- nd a quali ed employee,” he said. tions with trained individuals. This Mr. Scheeler said his most popu- against mobile tire services in their dered whether consumers ever will Ms. Fordin has found it dif cult to industry is a rewarding one, and many lar sizes are 215/55R17, 205/55R16, areas. need it. nd quali ed help, adding “Where people don’t realize all the opportuni- 225/65R17, 265/70R17 and 195/65R15. Mr. Riechers said his shop could “I believe brick-and-mortar is far are the ladies at?” ties here for them, so they don’t think “It might change a little bit from the add mobile tire services, but he does more trusted. With almost 40 years Mr. Ogle said C&D Tire is fully to explore.” 16-inch stuff to the 17,” he said, not- not see the need or demand for it in his of business behind us at Adirondack staffed and his company has a low- Mr. Scheeler said nding quali ed ing there are more crossover vehicles area, and “it would be hard to make it Tire, we will always be found and er-than-average turnover rate. help has not been an issue for him. coming out. pro table.” ready to help,” he said, “So ask, ‘Will “Many of our employees have been “Being that we are only one loca- “I think those sizes in the 16-inch Mr. Scheeler said it hasn’t impacted they?’ ” with us for multiple years,” he said. tion, I’ve had my same crew. I haven’t (range) might go down a little, but his area of Las Vegas either. “We have Mr. Ogle said C&D Tire has its “In the times that we do need to hire, had any turnover in ve years,” he said. Visit us on the web at www.tirebusiness.com TIRE BUSINESS, January 7, 2019 • 23 Leaner ATD looks to continue driving industry growth Continued from page 1 Throughout the process, ATD has experienced professionals in the in- they were discontinuing most or all operations internally, eliminating 100 provider for decades to come.” maintained to employees and its cus- dustry. They live our values every of their supply relationship with the positions at its Field Support Center ATD said it will move forward by tomers that business has been and will day by focusing their full attention on tire distributor. The two tire makers (FSC) in Huntersville as part of a new offering customers more than 50,000 continue as usual. keeping our customers thriving and launched their own distribution joint strategic plan. In addition, ATD said SKUs, “data-driven” technology and “All of us at ATD would like to driving into the future.” venture, TireHub L.L.C., which began it would reinvest in 40 new positions platforms, “state-of-the-art logistics” thank our customers ATD’s Canadian operations on July 3. — in large part to bolster its Tire Pros and an array of marketing programs. and manufacturing subsidiary, National Soon after learning of ATD’s los- franchisees — many of which have The company said it will “continue partners for their Tire Distributors, has ing these major customers, Moody’s been lled. driving growth, generating strong cash continued support,” not been affected by Investor Service Inc. questioned Chicago-based Kirkland & Ellis ows and deepening its value proposi- Mr. Schuette said. “I the process. whether the wholesale distributor had L.L.P. served as legal counsel to ATD, tion for its customers and manufactur- also am deeply grate- ATD’s dif culties suf cient cash reserves to cover cer- while global consulting rm AlixPart- er partners by investing in the strategic ful to our team of more than 5,000 as- began earlier this year when two of its tain projected interest payments and ners L.L.P. is an operational advis- initiatives, technologies and talent that sociates across North America. largest customers, Bridgestone Amer- maintenance costs in the near future. er. Investment banker Moelis & Co. are fueling its transformation. “They are the most dedicated and icas Inc. and Goodyear, announced In late July, ATD restructured its L.L.C. is serving as nancial adviser. Tri State strives to change perceptions of service stations Continued from page 3 and understand how hard it is to work for that mon- is probably a dinosaur in today’s world, where ey, how people have a choice to come here.” many service stations tend to specialize as a Jeff started hanging out at the service station convenience store, a gas station or some type of at age eight or nine and got his rst paycheck at service/repair facility, but not all three. Tri State 14. He worked in all areas of the business, start- Shell, in addition to operating the small conve- ing part time, handling closing, doing clean-up. nience store, is a AAA Top Shop, a tire center, “I know all aspects of this business because a state vehicle inspection location, a towing ser- he’s made me,” Jeff said of his dad. vice and a provider of engine and transmission Although he grew up at Tri State Shell, Jeff work, computer diagnostics and oil changes. didn’t intend to make it his career. The family Tires make up about 10 percent of sales, the had a number of accountants on his mother’s side, and Jeff planned to attend college for busi- StateTri Shell photos Stricklers said, with Hercules the top-selling brand. The women’s restroom is clean, updated and decorated. The single location business is family-run, with ness. But he had a change of heart his senior Les, 71, working three days a week but no longer year of high school and decided he would join want dog hair all over the place. Then this is on the payroll. His wife Jane helps out, and Jeff’s the family concern. non-productive. You want the dogs to look good, sister Jennifer Lemin runs the towing operation. But before his dad would hire him full time, he present themselves good. We’re professional; the The facility has 10 employees including four told him he needed to get his associate’s degree. dog’s got to be professional, too.” ASE-certi ed technicians, including Jeff. So Jeff went off to Johnson’s College in Scran- Under his ownership, Jeff has expanded the Les and Jane started the business in 1972 ton, Pa., and got an associate’s degree in auto- towing business. when Les was 24, purchasing what was then a motive and combustion engines and technology. For many years, Tri State Shell had one rental Sunoco gas station. It was a time when the Unlike many small businesses where the tran- truck, but Jeff saw towing as a way of bringing oil companies were selling many of their outlets sition in ownership from father to son is some- customers back to the dealership and as differ- due to government pressure over monopolies. times dif cult, that has not been the case at Tri entiator from big box-store competitors. Les had been running his father’s service State Shell. Early on, Jeff said he recognized The company has four atbed trucks and has station in New Jersey for three years prior and his father’s success as a businessman and felt two roadside assistance vehicles, one of which beat out 40 others interested in acquiring the he must know what he’s doing. “So I had a very is equipped with wipers, batteries and tire re- location. What impressed Sun Oil Co., he said, open mind taking instruction from him,” he said. pairs, etc. was “when you came in here, you see how neat The respect was mutual. Jeff said his dad Not surprisingly, keeping the trucks and everything is ... . I had that mentality and philos- never hid the nances, allowed him to do the equipment clean and the employees looking ophy back then.” books and to know what money was coming professional is a high priority. Les said he always wanted to change people’s in and what money was going out. Les even “I press that on my guys. I want my trucks Tire Business photo DaveZielasko by perceptions about service stations. “Back then, shared his own income with his son. clean. I don’t want ngerprints on the steering Les Strickler shows a 1956 Chevy taillight mechanics were looked down on, and I wanted “Even though my father was the boss and ul- wheel. I make them wash their hands,” Jeff said. mounted in the men’s restroom. Vehicle own- to raise that standard to a higher level at my own timately had the last say, he always allowed me ers opened the taillight to pump gas into the car. business, that people would see that this place to do what I wanted to do, to allow me to grow Marketing strategy was a professional place and not a grease pit, for and not smother me, as long as it was within Regarding tire sales, employees at the service lack of better words.” reason, and I wasn’t going down a totally wrong Much of Tri State Shell’s marketing is word of station take time to get information from custom- He also impressed upon his son that people road,” Jeff said. mouth, but the company also promotes itself in ers before selling them tires. They ask questions drive by a lot of other service locations to come Like bringing his dog to work. various ways, including social media and eblasts. like how many miles do you put on your car ev- to Tri State Shell, “and you have to treat them a “That was something I started,” he said. He Jeff has mixed feelings about Facebook and so- ery year, what is your budget, do you commute certain way because they chose to come here.” and his wife got a puppy, and Jeff didn’t want to cial media but does it because that’s how certain into the city every day. Only then can the dealer- As a teenager Jeff said he didn’t fully under- leave it home alone. So he brought her to work people want to communicate about their vehicle. ship comfortably give them a few options. stand what that meant until he had to make oth- so he could train her and let her out. He said he misses his older customers who An example of this involves newer vehi- er people’s paychecks. Today the facility has two resident dogs, have died because they tended to be customers cles, many of which come equipped with tires “That’s when you have an appreciation, for when Lady Bulova, a rottweiler owned by Jeff, and for life. If they found a business trustworthy, with soft rubber compounds that tend to wear you have your own money that you have to spend Sadie, a basset hound, which is Les’. they stayed loyal to it. quicker. Owners of these vehicles often don’t “People like it,” Jeff said of the dogs. “The “Today, it’s not like that,” he said. “Kids to- understand why their tires are worn out at only kids like it when they come in. ... A lot of peo- day are raised just to go where it’s the cheapest 19,000 miles, Les said, adding that selling ple stop just to see them.” and nothing else matters.” them, for example, a $200 tire doesn’t necessar- Les agreed, but added, “My big thing is if you Tri State also spreads the word through sig- ily mean that the tire will last any longer than if are going to have a pet like that in your business, nage on its tow trucks. “They are like billboards they spent $100 on a tire. make sure everything is picked up and clean ev- all over the place,” Jeff said. “I don’t want to see a customer who’s retired ery day. You want to have a nice bed. You don’t But the most effective forms of advertising spend $200 on a tire knowing that it’s only for Tri State Shell, he said, are the electronic going to last 19,000 miles, and I can sell you billboard and 15-foot inatable tire located something for maybe $125 and it will still last beside the road in front of the facility. People 19,000,” he said. remember the inatable tire, Jeff said, which Whether Tri State Shell gets the sale is irrel- sends the message, “That guy sells tires. They evant, he said. “The fact is I want that person to tuck that away, and at least sometimes I get a feel special. That we did our best to inform them shot to quote that individual.” and hopefully through that we get the sale.” As for the electric sign, it’s located at the cor- That seems to be the overriding aim at Tri ner of a nearby intersection. So it has a captive State Shell. audience each time drivers stop at the light. “Everything we do isn’t always about the Tri State Shell uses the sign not only to pro- bottom line of making money,” Les said. mote itself, but to provide community messages. “It’s the fact that when people really appre- “When (people) are stopped there, they are forced ciate the effort we’ve made over the years, that to look at the thing,” Jeff said. “It’s right in front knowing that when they come here, they will Sadie, Les Strickler’s basset hound, comes to of your face. They have no choice but to look at it.” leave a little happier than when they came in, work with him at Tri State Shell. So does Lady Bu- Then there’s Tri State Shell’s customer- rst because it was a fun place to stop. They’ve seen Tire Business photos DaveZielasko by A working stop light in the service bays. lova, a Rottweiler, which is Jeff Strickler’s dog. service approach. unique things. And that’s fun.”