Karl-Friedrich Schmidt Moves to Goodyear Group Headquarters
Karl-Friedrich Schmidt (59), previously Fulda manager with Europe-wide responsibility for Manufacturing Efficiency and Information Systems, took over as Director Global Manufacturing Efficiency of the Goodyear parent company with effect from 1st October. In this new function he reports directly to Goodyear’s world headquarters in Akron/Ohio, where he will also be based. My principal aim is to raise the efficiency and profitability of all Goodyear production facilities worldwide, said Schmidt. K.-F. Schmidt began his career with the group in 1983 when he joined Gummiwerke Fulda as Manager Industrial Engineering. In 1986 he moved to the personnel and welfare department with the rank of Deputy Managing Director. Four years later he became Manager Organization Effectiveness Europe for group divisions not directly product-related. He held his most recent position since 1993, during which time he was responsible for the integration of company acquisitions, among others Debica (Poland), Sava (Slovenia) and the repurchase of Goodyear South Africa.
Pirelli has released first details of a new manufacturing system, called MIRS (Modular Integrated Robotised System). The company is investing 250 million Euros over the next five years. A MIRS plant that can produce one million tyres a year would employ 104 people in five shifts, would occupy 3,500 sq. m. and the investment cost (excluding the building itself) would be around 45 million Euros. According to Pirelli, MIRS reduces the steps of the tyre building process from the previous 14 to only three. Instead of passing the tyres from hand to hand in the production process, the MIRS work is done by robots. Tyre type and size are fed into the computer at the beginning of production, the rest is done by the computer alone, without human interference. MIRS is therefore a kind of mini-factory with an extremely high degree of flexibility. The factory can be built anywhere where there is a market. The technology, which Pirelli does not disclose and is not prepared to share with a competitor, not even under licence, was developed by Pirelli’s research and development department in co-operation with Italian universities and the Ministry of Research and Science. A pilot plant will start work in the Bicocca factory near Milan at the end of June 2000. The Italiens claim a manufacturing cost reduction of 25 p.c. for the MIRS method compared with the traditional way, and Pirelli boss Tronchetti Provera plans to manufacture three million tyres by the new method by the year 2003, or 15 p.c. of its high and ultra-high performance tyres. If all goes to plan, it will be possible to produce five million MIRS tyres within five years.
“Serious Tyre Failure” and “Sea of Troubles” Between Continental and Semperit
The Semperit factory at Traiskirchen is facing a cut in car tyre production from the current 2.9 million to 1.4 million units next year. That will put a big question mark over the efficiency of the plant. The works council fears erosion and medium-term closure; well above 100, if not up to 250 jobs will have to go. The threatened workforce is determined to fight this unequal treatment with all the means at its disposal and, if necessary, to create a sea of troubles in public. Whether that can put right the many shortcomings of the past we shall have to wait and see. Cross-border solidarity between fellow workforces is not apparent.
In the first nine months of this year, Continentals sales rose to 6.8 billion Euros, with an EBIT of 385 million Euros. The largest contribution still comes from passenger car tyres, although Continental emphasises the growing importance of its role as a systems supplier. However, it seems that there will not be any striking developments in this segment that will affect the market in the immediate future. But Dr. Kessel is sure, saying: Continental is on the way to Total Chassis Management. Obviously, the company wants to enhance its profile at the expense of its tyre competitors, many of whose shares are performing badly on the worlds stock markets. However, Continentals share price at the moment is also disappointing.
Nokian Tyres has agreed to purchase up to 94 % of the ISKO-shares. ISKO is the largest Finnish Tyre wholesaler and retailer. As soon as the transaction has been completed Nokian Tyres will have the largest equity in Nordic Europe consisting of 117 depots with 750 employees in Scandinavia together with Estonia and Latvia.
Krupp Elastomertechnik was created in 1996 by the merger of the company Werner & Pfleiderer Gummitechnik in Freudenberg and the rubber technology division of Krupp Kunststofftechnik. Thus two companies were united which, by their own admission, had cooperated in technology for a long time. This offers the rubber processing industry the opportunity of a one-stop shop, as it claims to a large extent to cover all essential preparation and process stages. According to Krupp, all machines, facilities and systems are the product of computer-aided development and construction on modern machine tools and manufacturing facilities and are installed and thoroughly checked before being handed over. In the recent past various new and advanced developments at Krupp Elastomer GmbH were particularly aimed at consolidating and improving the market position of the company. Largest market shares overall are held in Europe, but that does not mean that other regions of the world are less important to the company. For example Asia, which has so far produced 40 p.c. of the total turnover. At present this market is not too prosperous although there are a few positive signs, but that deficiency was almost made up by comparatively good sales in Europe, since the boom in the motor manufacturing industry and therefore in tyre production also benefits machine manufacturers. For the current year further growth in tyre sales figures is generally expected, at least in Germany. That should herald a bright future for machine manufacturers in the tyre industry, shouldn’t it?
From 9th to 13th November 1999 all eyes of Europe’s agricultural industry were again on Hanover, where the eighth (since 1985) international DLG trade fair for agricultural technology, Agritechnica ‘99 was held on the site of the future Expo, the third time in succession at this venue. The German Agricultural Society (DLG) as organisers reported an impressive number of bookings: 1,500 companies in total (531 of them from abroad) presented a complete agricultural programme at the Hanover exhibition centre, an increase in exhibitor numbers of nearly 14 p.c. over 1997, the date of the last such fair. The total exhibition area was also extended by almost 20 p.c. since 1997, to 190,000 square metres. Agritechnica also reported the strong presence of the tyre industry, led of course by the Big Three in the tractor field, Michelin, Kléber and Pirelli (the latter now under its new name Trelleborg Wheel Systems), which in the last few years almost carved up the lucrative original equipment business in tractor drive-wheel tyres between them. Now other suppliers, Continental, Goodyear, Firestone and Taurus try to muscle in on the OE business. With the sole exception of Firestone they were all present at Agritechnica, as were Vredestein, Alliance, Danubiana (Tofan Grup) and Titan.
Michelin Reaps Benefits of Bridgestone and Goodyear Mistakes in the USA
The current winner in the American car tyre replacement business is Michelin. On the one hand, the French profit from the catastrophic supply situation of their two main competitors, Goodyear and Bridgestone, which achieve so-called fill rates of 60 p.c. or even less, but they also reap the benefits of the successful introduction and implementation of their multi-brand strategy, which has made a demand management possible. In contrast to their big competitors the French have a very clear brand policy with no further differentiation within a brand, and they no longer produce private brands, all of which considerably shortens the reaction time to changed market conditions. Goodyear and Bridgestone cannot achieve Michelin prices. The groups will not improve their unsatisfactory fill rates as long as they also manufacture large quantities of private brands. The Japanese cannot develop a multi-brand strategy since they lack a strong leading brand – Bridgestone not being blessed with a high degree of brand awareness everywhere in the USA. For a long time the Americans differentiated very strongly within the Goodyear brand; now they have to position Dunlop tyres as well. That will also mean the need for significant investment in the brands. Furthermore, Goodyear managers in particular are currently confronted by a hostile gut reaction from the trade, whether capable of rational explanation is neither here nor there.
Nokian: Turnover Up 20% In First Nine Months Of 1999
Finnish tyre manufacturer Nokian has achieved a net turnover of 199 million Euros in the first nine months of this year; an increase of around 20 %. Operating profit is 18.4 million Euros (9 % lower than the previous year). Nokian is pursuing a strategy of expansion and, this year, will invest some 31 million Euros, with the aim of increasing production capacity by 50% within five years. At the moment, Nokian is trying to purchase ISKO, Finlands largest tyre dealer with a turnover of approximately 65 million Euros. Analysts say that ISKO is financially very strong and very profitable.
Rumours about Continental/Pirelli Joint Venture Nothing but Red Herrings?
Although a joint venture between Continental and Pirelli could make sense in the tyre sector, observers do not believe it. The Italians, in any case, deny it vehemently. While the German group is still recovering from the enormous effort of the Teves acquisition, the Italians are about to concentrate more on entering the real estate business. An extremely nervous reaction came from Pirelli Reifenwerke managers, who do not like such talk in the market, especially since they have enough to do looking after themselves. Sales boss Röske speaks in eloquent terms of the lustre of the Pirelli tyre brand that makes his team’s eyes shine. The brand, he says, is stronger than our customers sometimes want to give us credit for. In Röske’s opinion Continental may perhaps have tried to throw dust in people’s eyes to divert attention from a potential takeover by Bridgestone. This magazine rather thinks that Conti boss Kessel wants to avert the public gaze from talks with the telephone group Mannesmann, which is possibly ready to part with its automotive division.
Tyre manufacturer Cooper Avon wants to buy Siebe’s Automotive Devision. According to present information Cooper has to pay 244.5 million US-Dollar for the company which belongs to the British Invensys group.
Dunlop’s SP Sport 200 E has been given the Blue Angel quality seal of approval for nine sizes. The Blue Angel adheres to very strict guidelines and is especially for environment-friendly products and processes whose user qualities and safety aspects are in no way inferior to conventional products. Recipients are chosen by independent institutions. This new car tyre (speed indices H and V) is awarded the eco seal for qualities such as low noise level, the light weight of the product, fuel saving and reduced emissions thanks to its optimised rolling resistance. Dunlop’s winter tyre SP Winter Sport M 2 is currently being tested for exceptional environment-friendliness.