American Tire Distributors Inc. – Sales Down, Profits Up
US national distributor American Tire Distributors Inc (ATD) has reported its figures for 2002. Net sales declined 4.3 per cent to $1.06 billion, while pre-tax profits in 2002 were $12.9 million, compared to a pre-tax loss in 2001 of $23.8 million. Net income rose to $37.4 million, as against a net loss in 2001 of $30.9 million. Part of the improvement is due to a 19.3 per cent reduction in operating expenses. ATD operates 62 distribution centres in 35 states and employs 1,900 people nationwide.
Continue ReadingTime Running Out For Goodyear
Yesterday was the final day for Goodyear to report its 2002 financial results or apply for a two-week extension. The company has said that it will not release financial details until it has finalised discussions with banks concerning restructuring, refinancing and securing loans, as both subjects are related said a spokesman. Goodyear denies it is facing a liquidity crisis, as some analysts have said, and the company has secured a new credit line of $1.3 billion.
Continue ReadingGoodyear Misses Deadline (Update)
Goodyear Tire & Rubber Co. has missed its Monday deadline for reporting its end of year results for 2002. The company is still in negotiations with banks over restructuring of its loans. It is currently seeking an extension with the Securities and Exchange Commission (SEC) that would give it until April 15 to file the information. However, Friday is a more impending deadline when the banks wish to complete discussions regarding the loans.Goodyear lost $203 million in 2001 and is expected to post a loss for a second year in a row.The filing with the SEC also requires companies to disclose a wide range of other audited financial data, including available cash, sales, assets, debts and capital resources. Failure to meet the extended deadline could see Goodyear facing a court order to disclose the information, along with civil fines.Goodyear said the only reason it needs an extension is because it is continuing to discuss its loan restructuring with a group of banks.
Continue ReadingGoodyear In Negotiations With Steel Workers
In the USA, Goodyear is gearing up for negotiations with the United Steelworkers of America about a new Master Contract, covering 10,000 hourly-paid workers. The previous two sets of negotiations (in 1997 and 1994) resulted in strikes and the current negotiations are taking place against the backdrop of financial losses and worker layoffs and, according to American newspapers, it is too soon in the negotiation process to tell whether or not another strike will result.
Continue ReadingCooper Lowers Estimate
Cooper Tire & Rubber has reduced its first quarter earnings estimate in response to falling US demand and rising costs - industry-wide, tyre shipments in the US fell 8 per cent during the first two months of this year. The new forecast from Cooper is for net income to be between 17 cents and 21 cents a share, compared with the figure given by CEO Thomas Dattilo in early February of 26 to 31 cents a share.
Continue ReadingApollo And Modi End Production Agreement
The agreement signed last August between Indian companies Apollo Tyres and Modi Rubber, whereby the Modi factory would produce for Apollo, is off. Apollo says that its requirements for increased capacity are being satisfied through our own expansion and through other sources. An Apollo spokesman also said that the company was not averse to buying into the tyre business of Modi Rubber, providing the right deal can be struck. The Modi factory has been closed for over 18 months.
Continue ReadingNokian AGM Decisions
At its Annual General Meeting, Nokian Tyres decided to pay a dividend of 1.11 Euros per share. The AGM also authorised the Board of Directors to increase the share capital by a maximum of four million Euros, if desired. At the Board meeting following the AGM, Mr. Matti Vuoria was elected Chairman of the Nokian Tyres Board.
Continue ReadingContinental And Metro In Co-Branding Agreement
Continental and Indian company Metro Tyres are to manufacture motorcycle and scooter tyres under the joint brand name Continental-Metro for the Indian market. Initially, Metro will produce 100,000 tyres and tubes a month for 100cc and 110cc motorcycles, with tyres for 150cc and 180cc bikes coming on stream later. Half of the production offtake will be marketed in Europe and North America - these tyres will carry the Continental name only. Production is set to begin in May and the initial investment is 30 crore Rupees, or around US$ 6.3 million. The arrangement between the com panies will be purely a technology deal for the first three years, after which the companies may explore a possible equity partnership.
Continue ReadingChinese Supply Michelin With Production Equipment
There are reports in the Chinese press that the Tianjin Saixiang Technology Co. Ltd. is to supply moulding equipment for truck radial tyres to Michelin factories across the globe. The contracts will run for the next three years and the first shipment of TST equipment - destined for France - will take place in August.
Continue ReadingFiat Sells Insurance Company
Fiat is to sell Toro - its insurance arm - to De Agostini for 2.4 billion Euros. Last year Toro turned over 5 billion Euros and achieved an operating margin of 3 per cent. Over the past 12 months, Fiat has disposed of assets worth 5 billion Euros.
Continue ReadingPirelli OE On New Dodge Ram SRT-10
The new Dodge Ram SRT-10 is the latest and largest in pick-up trucks, with an 8.3 litre engine and 500 horsepower. The new pick-up will be shod with Pirelli Scorpion Zero tyres, size 305/40 22, made in Pirellis MIRS factory at Rome, Georgia. The SRT-10 will accelerate to 60 mph in five seconds and has a top speed of 150 mph.
Continue ReadingAmcast Sells Speedline
Amcast Industrial Corporation has announced that it has sold Speedline, its Italian wheel subsidiary, to a European-based company. The net proceeds from the sale will be negligible. Byron O. Pond, chairman of the board and chief executive officer, said, Speedlines recent operating performance has had a significant, detrimental impact on Amcasts profitability. The transaction should return the remaining Amcast businesses to positive net earnings in its third fiscal quarter.The company also received news that the New York Stock Exchange believes the company is below the criteria for the NYSEs continued listing standards. The company no longer meets the equity standard, which requires a listed company to have an average market capitalization of not less than $50 million over a 30 trading-day period and stockholders equity of not less than $50 million. The company has expected this action and is reviewing its available alternatives to assure a continuous public trading market for its common shares.
Continue ReadingBandag Sells More TDS Locations
Bandag Incorporated has stated that its wholly-owned subsidiary, Tire Distribution Systems, Inc. plans to sell 19 stores and nine retread plants to a current independent Bandag franchised dealer and a previous independent Bandag franchised dealer. TDS previously sold nine of its Tennessee commercial and retail outlets in 2003.The shift of TDS locations into the hands of independent Bandag dealers began last year with the sale of several commercial and retail locations in Alabama, Georgia and Tennessee. One of the two transactions involves the proposed sale of seven stores and three retread plants in the state of Louisiana and seven stores and three retread plants in the state of Mississippi to Southern Tire Mart. The second deal sees five stores and three retread plants located in the state of Arkansas going to Trans American Holdings LLC, headquartered in Fort Smith, Arkansas.
Continue ReadingThe Car Fleet Tyre Market; T&A talks to the people who really understand the business
The car fleet tyre market has seen some changes recently. The forerunner of fleet tyre management was, we believe, FTM, first established in 1991. Cutting to the chase, two years ago as part of the Montinex Group, FTM almost went to the wall when Montinex collapsed. Its management included Kevin Parker, who was snapped up by National Fleet, then in the hands of Continental, and Dominic Bateson who in quick time arrived at the helm of General Motors backed Fit4Fleet. At the same time Kwik-Fit had been acquired by Ford and there was a drive to expand Kwik-Fits coverage of the fleet market. Sir Tom Farmer bought FTM from the receiver and brought in Mike Wise to operate FTM to cater for the independent sector alongside Kwik-Fit Fleet. This was an arrangement which despite Mike Wises teams success in delivering the contracts, remained uneasy as many independents questioned FTMs autonomy from Kwik-Fit. Some simply had a dislike, or fear, of the Kwik-Fit ogre. Now that FTM has gone and Kwik-Fit Fleet has turned its back on the independents the sector is in a state of flux. This, in depth feature airs the views of the top players in this important and growing sector.The two equity players, ATS and Hi-Q have leading positions in the sector though both freely admit to chasing Kwik-Fit. Centrals role is somewhat less, and anyway is masked in the figures of one of the larger fleet tyre management operations figures. ATS Euromaster is in the invidious position of having lost two of its top management, both appointed from outside the tyre trade to bring in fresh approaches. The past year has seen ATS putting a great deal of effort into the retail outlets, perhaps at the expense of the car fleet sector. The coming year, says Ian Thomas, strategic development and interim sales director, will see a redirection of emphasis and a development of the fleet sector alongside the ongoing retail developments.ATS Euromaster, which we will refer to from here as ATS, has been in the fleet sector for a long time, however its interests have historically been largely in the truck and agricultural sectors rather than the car and van fleets. In the truck fleet market ATS lays claim to 35 per cent of the tyre replacement market and 85 per cent of the truck breakdown market in the UK. The inroads into the car sector, though significant, are far less and Ian Thomas admits that in car fleet terms ATS is trailing market leader Kwik-Fit, though he stresses that the companys second place in the sector is a long way ahead of the third largest player. Ian didnt say which was the third largest player but at present we might estimate that the honour falls to either National Fleet or Hi-Q, though if AA Tyre Fit is as successful as Centrica hope that position may change within the year.Paul Harrell, retail director responsible for Hi-Q advises T&A that the Goodyear Dunlop equity has been under review and through 2003 will be taking on a new stronger Hi-Q branding, with a reorganisation which truly strengthens Hi-Q, putting them in leading positions in some sectors of the UK market.Mike Wise who proved himself as a contract winner at FTM has been retained as the sales director for Kwik-Fit Fleet. In a frank discussion with T&A Mike was quite open about his thoughts on the market … Honestly, I dont think there is a future for the independent tyre retailer in the fleet tyre market … Kwik-Fit wins on every count … there will always be some work for them [the independents], but in the long term I question their viability against the strengths of Kwik-Fit.To find out how the competition responded to Mikes outspoken views read the most in depth discussion on the fleet tyre sector ever written …
Continue ReadingNorth American Auto Output To Drop 10%
Auropolis analysts expect vehicle production in North America to fall by 10 per cent in 2003 even is a war is avoided or short. The drop will continue even if current price-cutting is extended. Despite action to maintain volumes US sales fell for eight months in 2002 and showed lower year-on-year figures for the second straight year in a row. In a market characterised by fears over some carmakers financial foundations, waning consumer confidence and a market which has been almost saturated with overly-cheap cars for three years, the prospects are poor. Past cycles in the US show, that when it comes, the market normally corrects sharply and quickly. Swings in sales of more than 20% from the highest point to the lowest over an 18 month period are typical says the firm. The only reason that the situation might be better this time is because Mexicos market should grow in 2004 thanks to price cuts anticipated there. Assuming a normal pace of recovery, Autopolis say the North American market will take until 2009 to have returned to its peak level again.
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