Giuseppe Morchio, a former executive at Pirelli Tyres, has been invited to become the new chief executive of Fiat. This follows the appointment of Umberto Agnelli as chairman, taking over after the death of his brother Gianni last month.
A US federal grand jury is conducting a criminal investigation related to Bridgestone tyres that were linked to deaths and injuries involving Ford Explorers, according to a subpoena issued to lawyers suing the companies. The subpoena, by the United States attorney for the Southern District of Illinois, requests that lawyers suing the Bridgestone Corporation and the Ford Motor Company in tyre-related cases turn over documents to the grand jury. Among the requested documents are sworn statements by John T. Lampe, chief executive of Bridgestone Americas Holding Inc. The investigation follows accusations by Congressional investigators that Bridgestone and Ford misled federal officials about the safety of their products.The subpoena does not identify the focus of the criminal investigation, simply that the documents being sought are pursuant to an official criminal investigation of a suspected federal offense. Safety officials say flaws in Firestone tyres contributed to 271 deaths and more than 700 injuries. After a recall of Firestone tyres began in 2000, President Bill Clinton signed a law that made it a crime to withhold tyre safety data.
Having recently sold a number of its Stop ‘n’ Steer centres in the UK, there are rumours that Kwik-Fit is set to rationalise its European operations. Our information, which comes from sources close to Kwik-Fit, but who did not want to be named, is that the company is looking at selling its operations in Poland, Belgium, Spain and Ireland in order to concentrate on the UK, Netherlands, France and Germany. We contacted Kwik-Fit in the UK to see if this was indeed the case and received the following reply from a company spokesperson: “Kwik-Fit is undertaking a review of all its operations. It would therefore be inappropriate to comment on future plans at present.”
The Speedline group, aluminium wheel producers and since 1997 part of North American Automotive supplier Amcast Industrial Corp. based at Dayton, Ohio, is for sale. Negotiations are said to be taking place with the Italian Mazzucconi group which operates from Ponte San Pietro, Bergamo. Fonderie Mario Mazzucconi S.p.A. is specialised in the production of aluminium components for the automotive OE market, where customers include Fiat, Mercedes-Benz, BMW, Audi/Volkswagen, Iveco.
UK fleet tyre management company Tyreserve has changed its name to AA Tyre Fit. The change, effective from February 24, reflects the purchase of Tyreserve by the AA in June 2002. The company’s general manager, David Goodyear, said the change would bring the business – and its network of 3,221 independent fast-fit centres and franchise dealers – all the benefits of belonging to the most trusted brand in motoring services. AA Tyre Fit has also appointed Continental as an approved tyre supplier. The German tyre manufacturer joins Cooper-Avon as the only two suppliers whose products are offered to the company’s fleet and retail customers.
Don Roulett has joined The Goodyear Tire & Rubber Company as global marketing manager for aviation tires. He replaces Jim Pickering, who has retired. Roulett joins Goodyear after 13 years with Honeywell/Allied Signal Aircraft Landing Systems, where he was program/business manager for Boeing and Airbus OEM projects and deputy general director of a Honeywell joint venture within the Russian Federation. He worked for Goodyear Aerospace in Akron from 1979 to 1982 as a development engineer. “Don’s considerable experience in global aircraft development will be a considerable asset as we continue our penetration of this market, especially overseas,” said Alex Dumm, general manager Goodyear’s global aviation tires.
Financial analysts MorganStanley have upgraded Michelin from Equal Weight to Overweight, which means that the stock’s total return is expected to exceed the average of those companies reported on in the same industry, over the next 12-18 months. Michelin recently published an encouraging set of figures for 2002 and the analysts believe that the shares, currently trading near an eight-year low of 24 Euros, are undervalued.
Continental Teves, a unit of Continental AG, and Robert Bosch Corp, the North American subsidiary of Robert Bosch GmbH, have joined together to form the Electronic Stability Control Coalition (ESCC). The coalition will conduct a consumer public relations and marketing campaign designed to educate consumers about the safety benefits of electronic stability control (ESC) systems in passenger cars and light trucks. ESC is an active safety system that enhances vehicle stability in critical situations by analyzing the driver’s intention and comparing it to what the car is actually doing. The coalition wants to promote the impact that ESC systems can have on improving the safety of automobiles. One of the key goals is to inform consumers of the importance and benefits of ESC, a breakthrough in safety technology. The public education programme will include the development of issues research, as well as the creation of broad-based grassroots programmes, such as seminars and brochures.
German tyre giant Continental has signed a joint venture with Malaysian industrial conglomerate Sime Darby Bhd and is taking a 30 per cent stake in Sime Darby’s tyre operations – DMIB Bhd and Sime Tyre International Malaysia Sdn Bhd (STI). Continental’s equity stake will be in a new company – SDC Tyre Sdn Bhd – that will become the holding company of both DMIB and STI. The agreement also provides the option for Continental to obtain a further 21 per cent (controlling) share in the new company in two years time. The JV is aimed at better equipping the companies to capitalise on opportunities in the Asian Free Trade Area (AFTA).
Although turnover decreased by 0.8 per cent in 2002, compared with previous year, the Michelin group outperformed even analysts highest expectations with an operating income of 1.225 billion Euros (which is 7.8 per cent of turnover, and 18 per cent more than 2001). Net profit more than doubled to 614 million Euros. At the same time, management succeeded in reducing the debt mountain by more than one billion Euros – all within one year. Consequently, Michelin continues to be the best-earning tyre company worldwide.
Japanese tyre giant Bridgestone Corporation has reported a strong rise in net profit for the year ended December 31, 2002, and predicts a gain for 2003 as well, even though it warns that business conditions are getting tougher. Bridgestone’s group net profit more than doubled to US$378 million, from US$145 million, on brisk overseas sales. Group sales climbed 5.3 per cent to US$18,700 million, with pre-tax profit jumping 99 per cent to US$1,233 million. For the year to December 2003, the company said it expects group net profit to come to US$584 million, the same mark it initially set for 2002. It forecasts pre-tax profit to shrink to US$1,042 million and sales to slip to US$18,682 million. Bridgestone is boosting its capital spending in 2003 by more than 60 per cent to US$1.6 billion. The company’s president, Shigeo Watanabe, said the investment is aimed at boosting output capacity in Thailand and Poland, as well as upgrading each plant in Japan.
Bridgestone has agreed to purchase two million Nokian Tyres shares from Finnish mobile phone maker Nokia for 78.34 million Euro (US$84.89 million). Representing a 18.9 per cent stake in the Scandinavian company, Bridgestone says the deal is purely a financial investment. “At this point it is a business investment. We see a lot of potential synergies and we want to build on those,” Bridgestone Europe Vice President Des Collins said, adding that Bridgestone had been in contact with Nokian management before agreeing to take the stake. His company was interested in Nokian because of its strong position in the Nordic countries and its know-how in the winter tyre market. Bridgestone agreed to purchase Nokian shares for 39.17 Euro per share. Nokian, the Nordic region’s largest tyre maker, said in a statement the transaction was conditional upon approval by the German antitrust authorities.
Galaxy Tire & Wheel has acquired a controlling interest in Rumaguma, the Serbian manufacturer of agricultural and off-road tyres. Rumaguma began producing tyres in 1982 and currently exports more than 75 per cent of production, with the largest customer being Continental. Currently Rumaguma is operating at 65 per cent of capacity and the excess capacity will be used to manufacture Galaxy and Constellation products. Galaxy is to embark on “a multi-million Dollar capital expenditure programme” over the next five years, at the end of which, Rumaguma’s production capacity will be doubled.
Toyota is to invest $180 million to upgrade its Indonesian factories after signing a deal with Indonesia’s leading vehicle manufacturer, Astra, to acquire control of the factories. The new company will be called Toyota Astra Motor (TAM) and Toyota will have a 95 per cent stake. Toyota plans to make 70,000 pick-up trucks and MPVs annually in Indonesia from next year, 10,000 of which will be exported.
SmarTire Systems, the manufacturer of tire pressure and temperature monitoring technology (TPMS), has signed an agreement with Hyundai Autonet Co. to develop, manufacture and distribute TPMS products to the Korean OE and replacement markets.