Yokohama has announced that it is to spend US$26 million to double capacity at its Chinese factory to 1.4 million tyres a year by the end of 2004. Originally the timetable for the expansion was the end of 2006, but increased demand has prompted Yokohama to bring the plan forward.
The Hayes Lemmerz cast aluminium wheel factory at Huntington, Indiana, has been temporarily closed after an explosion, the cause of which is not yet known. Staff were evacuated from the plant, but there were three injuries, including one fatality.
Continental Tire North America, Inc. (CTNA), has announced that it is supplying original equipment tires to the Ford Motor Company for the company’s all-new 2004 F-150 pick-up truck. Continental is supplying Ford with ContiTracTM P255/65R17 tires, General AmeriTrac TRTM P255/70R17 tires and General AmeriTrac LT245/70R17 tires. “The F-150 is one of Ford’s best-selling vehicles, and we are pleased to help Ford fulfill its product promises with our Continental and General tires,” said Andreas Gerstenberger, vice president of Continental’s original equipment tire business.
It was a quiet day on the legal front for Goodyear yesterday, with only one more law firm announcing that it was going to bring a class action against the company, following the recent admission that income had been over-stated. Reaction to recent events has been mixed, with website message boards showing a sharp divergence of views – unsurprisingly, there are bitter comments about the management, both past and present, but there are harsh words too for the lawyers, who some see as exploiting an unfortunate situation for financial gain. Taking Goodyear’s share price as a barometer of opinion shows that yesterday it rose 17 cents, to close at $6.72.
Honda’s net profit for the third quarter was up 58 per cent to 137.36 billion Yen (1.08 bn Euro). The main reasons were strong sales of the Accord in China and the USA, plus good US sales of the Pilot and Element SUVs. Operating profit was down slightly at 151.69 billion Yen (1.2 bn Euro), compared with 153.05 billion Yen for the same period last year. Despite the good figures, Honda says that full year revenue will probably be lower than forecast, due to unfavourable currency movements and continued low sales in Japan.
Back in May, Japanese company ALPS Electric and German firm IQ-Mobil signed an exclusive worldwide licensing contract, whereby ALPS will develop and produce a batteryless tyre pressure monitoring system. Mass production of such a system is about to start. Batteries, says ALPS, have a finite life, plus there are possible environmental and weight problems. The new batteryless TPMS replaces the central receiver with a transceiver, which transmits and receives signals and a transponder, which replaces the transmitter in the pressure sensor and uses the energy of the signals received to send a return signal.
The Alcoa-Kofem factory in Székesfehérvár, Hungary, is the first-ever recipient of the Good Corporate Citizenship and Social Responsibility Award, from leading Hungarian business and economic journal Figyelo. The Alcoa-Kofem factory produces forged aluminium truck wheels.
Yesterday we said that a Goodyear shareholder was instituting a class action against the company over its re-statement of profits, alleging that Goodyear deliberately misstated its profits in order to maintain an artificially high share price. Today, the company has been hit by a flurry of similar actions as lawyers across the US leap on to the bandwagon. A typical announcement from a firm with offices in Connecticut and California says that it has commenced a securities fraud class action claiming damages against Goodyear, Samir Gibara, Robert Tieken, Robert Keegan and Stephanie Bergeron and invites disgruntled shareholders who bought Goodyear shares at the time in question to join the action. No doubt other actions will be brought as more and more law firms try to get in on the act – something which will do nothing to improve Goodyear’s relations with both investors and financial institutions.
The image of scavengers circling a recently-dead corpse may be premature in the case of Goodyear, but it is one that comes irresistibly to mind as the news breaks of more and more firms of lawyers initiating class action lawsuits, claiming damages against the company and named executives following the recent announcement that income had been overstated by up to $100 million. Five separate law firms announced towards the end of last week that they would begin an action (the announcement from Goodyear was only made on the Thursday, so these were certainly quick off the mark) and, so far this week, another five companies have joined the list, with no doubt more still to come. So far, the effect on Goodyear’s stock has been negligible, with shares closing yesterday up 21 cents, at $6.55.
Continental’s nine-month figures would have been 5.7 higher than for the same period last year, but currency exchange effects mean that they were virtually identical at 8.485 billion Euro. The EBITA (earnings before interest, tax and regular goodwill amortization) for the nine months was up 20.7 per cent to 661 million Euro (2002: 547 million). The return on sales was 7.8 per cent (2002: 6.5 per cent). Sales rose at Continental Automotive Systems and at ContiTech. On the tyre side, sales and earnings increased for the Passenger Tire division, but declined for Commercial Vehicle Tires.
Goodyear India has been chosen as OE tyre supplier for Skoda Octavia, GM Chevrolet Optra, the Telco City Rover and Telcoline 4×2. Goodyear is the sole tyre supplier for the City Rover and is also the sole supplier for the DaimlerChrysler Mercedes E Class.
The amount of rubber imported into India by tyre manufacturers could reach 60,000 tonnes this year; higher than the original projection of 45,000 tonnes and more than double last year’s 26,000 tonnes. The tyre firms are importing through what is known as “the advance licence route”, which allows them to import rubber duty-free against exports of tyres. The companies are also said to be given 150 days’ credit for buying on the international market, while no credit is offered on the domestic market and domestic purchases incur an additional levy of 16 per cent.
Southam Tyres has announced that the company is to be the exclusive UK distributor for the Merit brand of 4×4 tyres from the USA. Southam specialises in tyres for 4×4 vehicles and the first sizes in the Merit range will be available to the trade this month.
The Environment Agency has opened the final stage of public consultation on Castle Cement’s application to build a new cement kiln at its Padeswood site near Mold, north Wales, which will burn solvents and scrap tyres. The new kiln will replace the existing facility and production will be increased by 50 per cent.
Vredestein UK has signed up to exhibit at Tyre ASI, the UK exhibition being held at the NEC this January. It is an integral part of the Aftermarket Show and runs alongside Autosport International. The visitor profile was a major factor in Vredestein’s decision and the company’s stand will feature the Giugiaro Design Aston Martin 2020.