LitWatch, the litigation news service, is expanding coverage of lawsuits filed in state and federal courts against tyre producers and auto manufacturers. This expanded coverage has been triggered by the demise of the multi-district federal class action, now on appeal to the US Supreme Court. Individual SUV rollover and tire failure cases are now proceeding simultaneously in many separate state and federal courts.”The federal courts have declined to handle this as one organized case, which means that it’s every plaintiff’s lawyer for himself. This will be the Oklahoma land rush of this decade, with hundreds of cases, seeking billions of dollars in damages, filed throughout the United States,” said John W. Toothman, Editor-in-Chief of LitWatch. Toothman notes that “Something unique about these cases is the conflict between the automotive and tire industries, which makes every case a potential land mine for both.”An example of this expanded coverage is the trial transcript from the recently-settled Hernandez case from LA County Superior Court, in California, the first case against both Firestone and Ford to go to trial against both. That case settled in the middle of trial for an undisclosed amount after key testimony was admitted from Jacques Nasser, former Ford CEO, and from another Ford official.This key information includes admissions that Ford was aware that 6.5 million Firestone tyres were defective and that using a replacement would have cost just 10 cents more per tire.
In the USA, Robbins LLC has announced a substantial plant expansion and modernisation program, including a new mixing line and a new 1,800 square foot testing and quality control lab. The mixing line will be housed in a new 60,000 square foot plant extension. Robbins, which recently acquired all the assets of Presti Rubber Products Inc., manufactures curing tubes and envelopes for retreading plus custom mixing of rubber compounds.
At the beginning of November 2002 the Michelin Pax System will be offered as an option on the new Audi A8. This underlines the great potential of Pax technology in the areas of security and mobility. Two concept-cars at the Paris Motor Show also featured the Pax System: the Renault Ellipse and the Citroen C Airdream.
In Germany, VW/Audi has embarked on a press publicity campaign for winter tyres. The program runs for October/November and includes tyre and wheel assemblies with tyres from companies Bridgestone, Continental, Dunlop, Goodyear, Michelin, Pirelli and Mabor Winter Jet, a Continental house-brand. The interesting point is that, when the tyre is purchased, a storing service is offered, accompanied by a free guarantee. The 24-month guarantee includes protection against punctures, damage caused by kerbing and vandalism. The guarantee is not restricted to VW or Audi cars. More information will be available under www.reifengarantie.de, although the page is not yet up and running.
Now that Goodyear’s stock has fallen to its lowest value in the last 10 years, questions are being asked about the consequences for the management. At the moment Goodyear shares costs less than 10 US-$, and American newspapers report that, since 1996, when Sam Gibara took over, Goodyear’s stock-value has fallen by about 80 percent. Last year the company lost more than 200 million US-$, and this year there is no turnaround in sight.Goodyear is not in a position go on the offensive; on the contrary it has its back to the wall. Bad enough that the bond issues are rated as “junk-bonds” and that obtaining credit will be more expensive, but the scenarios and rumours that are being discussed inside the company would have been unthinkable some time ago. Despite these difficulties, analysts agree that Goodyear can resolve its problems without outside help, assuming it chooses the right measures. On Tuesday this week a routine chairman’s board meeting will take place. It is not known whether there will be any discussions about the management.
Michelin has presented its OCP (Optimised Contact Patch) technology at the Paris Motor Show. With OCP technology wheels can lean, similar to a motor-cycle, thus optimising the contact patch area. The system is being tested by different car companies for use on cars at the upper end of the market. Later on Michelin will bring to market the pressure detection system EnTire which will be developed together with TRW in 2003.Development is also planned of an active air-management-system together with Wabco and the help of TRW and SKF, planned to be on the market in the year 2005. There is news too about ViaMichelin, in co-operation with Tele Atlas, for a on-board CD-ROM for navigation. Finally, Michelin Editions des Voyages has published a series of new travel-guides, including local street-maps, containing information for tourists.
Ford has announced that it plans to cut $2 billion from its European supply budget. Chairman of Ford of Europe, David Thursfield, said that the cost reductions would be achieved through design improvements, rather than forcing suppliers to cut prices.
Robert Bosch GmbH, Stuttgart, and the Michelin Group, Clermont-Ferrand, have established a joint venture company for integrated vehicle dynamics management systems. The new company is called Integrated Safety Systems ISS and is based in Paris. The purpose of the joint venture company is the market introduction of new systems resulting from the partners’ joint development activities. In 2001, both companies had announced their cooperation in the fields of tires and chassis control systems, with the objective to improve safety and mobility of automobiles thanks to an optimized coupling between tire and electronic brake control technologies. Bosch produces automotive technology in 140 plants on all 5 continents. In 2001, it achieved sales of € 23.2 billion in this business sector, with 143 000 employees. Last year, the Bosch division chassis systems, a leading manufacturer of braking systems, had 18 000 employees and achieved sales of around € 4.5 billion. Michelin produces and sells tires for all kind of vehicles, including passenger car, light and heavy trucks, 2-wheels, aircraft, agricultural and earthmover vehicles, as well as the US space shuttle, and develops suspension and anti-vibration systems. Michelin counts 80 production sites in 5 continents, has 130 000 employees and sales operations in over 170 countries. The Group achieved around € 15,8 billion sales in 2001.
Michelin’s Edouard Michelin and Continental’s CEO Manfred Wennemer have both spoken to analysts at the Paris Motor Show regarding the prospects for their companies. Michelin says that raw material increases (15 per cent in the first months of the year) will have an adverse effect on 2nd half business. Michelin’s strategy is “to get more value out of the tyre”, which Edouard Michelin says should not be regarded as a commodity. The company will also add production in low labour-cost countries.Continental’s European restructuring is bearing fruit with good economies of scale from concentrating truck tyre production at Puchov. However, the US market “remains difficult”. The current brand mix in the US aftermarket is 80 per cent General Tire, 20 per cent Conti. The aim is to make this nearer 50/50. Wennemer said that the forthcoming “tread act” in the US has great potential for the company in the field of tyre deflation sensors.
On Monday, Goodyear will lay off 450 workers at its plant in Union City, Tennessee, blaming the economic slow down. Plant Manager Jim Davis explained that industry replacement tyre shipments were down 8 per cent on last year andGoodyear’s shipments were below this figure. 450 workers make up almost 12 per cent of the factory’s workforce.
Castle Cement’s plans to burn chipped tyres at Clitheroe have been put on hold despite having approval from the Environment Agency and the local authority. However, trial burning has been delayed pending a response from Castle Cement on some technical enquiries. Castle Cement already burn tyres at Ketton in Rutland where it claims 20 per cent reduction in emissions.
McDonald Invest has reclassified Goodyear shares from Buy to Hold. The Deutsche Bank in New York is afraid that Goodyear will show a loss for the year or, at best, break even. The analysts from Deutsche Bank believe that Goodyear has its own particular problems compared with other tyre manufacturers.
Indian company Metro Tyres has signed an agreement with Continental to manufacture two-wheeler tyres for the German company. Said Metro Tyres Managing Director Rummy Chhabra: “We will be shortly producing motorcycle, scooter and moped tyres for Continental under the ‘Continental’ brand name. The move will give us access to manufacturers like Yamaha, Honda and Kawasaki among others.”
A Class Action lawsuit against Bridgestone/Firestone filed on the 12th August in California has been transferred to the Eastern District of the US District Court. Thus allowing Federal jurisdiction on the California originated case. The Class Action lawsuit alleges that Bridgestone/Firestone’s Steeltex R4S, R4SII and A/T tyre series contain a lamination defect which can, and has allegedly, caused the entire tread of the tyre to separate leading to the tyre’s destruction. Causes of action in the lawsuit charged the tyre manufacturer with Fraudulent Concealment, Deceptive Practices in Violation of the CLRA, Violations of the Unfair Practices Act, Negligence and Strict Liability.Commenting on the removal of the lawsuit to federal court, Lisoni, acting for the plaintiffs, stated: “This legal action was filed to protect and represent the interests of Americans throughout the country who have purchased one of the more than 27.5 million Steeltex tyres manufactured.”Lisoni emphasised he has received scores of reports from Steeltex tire owners nationwide of tyre defects and damages as well as accidents and injuries resulting from the defects. The purpose of this lawsuit is not about money, Lisoni stressed, adding: “First and foremost, it is to motivate Bridgestone/Firestone to take responsibility for their defective product and do what is best for the safety of its customers-immediately recall the entire Steeltex tyre series.”