Nissan has made the decision to build its new Micra model at its Sunderland, UK, factory, rather than France, following approval of a 40 million Pound grant. The news is expected to secure 500 jobs at the plant and has been welcomed by the Government as evidence of Nissan’s long-term commitment to the north east. It is thought that Nissan will demand that, in the future, more of its component suppliers for cars made at Sunderland submit invoices in Euro rather than Sterling.
On Thursday the 18th January , in response to a question from Mr. Peter Pike MP for Burnley, the Minister for Trade, Mr Richard Caborn announced that the Government was to “commission a competitive study to examine the entire rubber industry, and especially the tyre sector”. Peter Pike MP quoted cuts in tyre production in the UK (Michelin, Goodyear, Dunlop, Continental) and advised the Minister that there was concern in his constituency, Burnley, home of a Michelin plant, for the future of the Tyre industry in the UK. The Minister responded with figures showing overall tyre production standing at £1 billion, and exports at £800 million, and some 8,000 people still employed directly in the tyre manufacturing industry. He added that with electronics playing an increasing part in production we (the government) wanted to ensure the country was at the leading edge of technology, and quoted Pirelli’s new robotics line as evidence the UK Tyre industry has a future. Sir Sydney Chapman MP for Chipping Barnet asked whether, given the sharp decline of the Euro against Sterling should the government not have eased the tax and regulatory burden on the industry? The Minister’s response was that the government’s policies had been welcomed by the industry; that three of the five major tyre manufacturers were operational in the UK and that they were “looking to the government to give a lead on a foresight programme to develop new technology for those industries”. He added that the standing of the Euro had had little or no effect on the global re-organisation of the tyre manufacturers. In a follow-on question, Barry Sheerman MP for Huddersfield asked if the Minister thought that if a multinational closed down a UK operation, that the UK consumer should be encouraged to be discriminatory about the products he or she buys, to favour UK industries. In response the Minister stated that he did not think this to be an acceptable way forward, that “the way forward was to expand the global economy in a managed way that will produce a good result for the consumer”.
General Motors recently introduced a “Precept Technology Demonstration Vehicle” at the Detroit Motor Show as part of the project PNGV (Partnership for a New Generation of Vehicles) – a co-operation of American car makers, suppliers and the federal government. The concept car is fitted with the lightest 3.8 kg 16-inch fabricated aluminium wheels by Hayes Lemmerz.
Michelin India Private Limited has signed a memorandum of understanding with the government of Maharashtra to acquire a block of land at Talegon in the Pune district. No time scale for the start of construction has been decided.
It seems that BMW’s CEO Joachim Milberg may be close to being dismissed. The German magazine stern reports that the major shareholder – the Quandt family – has lost confidence in Milberg due to his mis-handling of the problems associated with daugther company Rover. The BMW boss also left many questions unanswered at a press conference on 17th March. For example, he and his colleagues neglected to mention the planned sale of Land Rover to Ford. Milberg also responded with ‘no comment’ to the question why had three colleagues been forced to leave the company over the Rover fiasco when Milberg himself and the boss of the Supervisory Board Doppelfeld had been the ones responsible? The Quandt family owns over 40% of BMW’s shares and they have said that they would never entertain a take-over bid for the company. In the light of recent events, many people are sceptical of such statements.
The news that BMW was going to sell its loss-making (1999 losses alone were 1 billion Euros) subsidiary Rover provoked an understandably strong reaction in Britain. Some estimated that 50,000 jobs (including those of suppliers) could be lost and BMW’s name was mud with workers, unions and the British Government, which accused BMW of lying. Undeterred, BMW began breaking up the Rover group, selling Land Rover to Ford for 3 billion Euros and the Longbridge car factory to venture capitalists Alchemy Partners, with BMW writing off debts of £2 million. BMW is retaining the factory at Cowley, where the new Mini will be made. Alchemy plans to re-name Rover as MG Cars and to move away from volume production to make sports cars and sports saloons. This would keep the Longbridge factory open, but with a much reduced workforce. Amid the thousands of paragraphs criticising BMW, some industry pundits have questioned the vulnerability of the German group and there are rumours of larger companies (VW and Ford are two who have been mentioned) sniffing around BMW. The major shareholder in BMW is the Quandt family, whose members insist that the company will remain independent. More details in the April issue of TYRES & ACCESSORIES.
The May issue of TYRES & ACCESSORIES contains an interview with Andrea Vassura, managing director of Marangoni Tyre. Speaking at the launch of Marangoni’s extended range of high performance tyres, Mr. Vassura revealed that the company was planning to build a new factory with an annual capacity of 4.5 million tyres. The existing plant at Anagni, which can produce three million tyres a year, is currently running at 90% capacity. The site of the plant has yet to be decided but the choice seems to be between Southern Italy or somewhere in Eastern Europe. There are substantial grants on offer from the Italian government for those who invest in the area, but Mr. Vassura says that no decision will be made until later on in the Summer. Marangoni Tyre had been offered the Cisterna di Latina factory, recently shut down by Goodyear, but it did not meet the company’s requirements. As a profitable tyre manufacturer, would Marangoni Tyres make a tempting takeover target in these days of consolidation? Mr. Vassura has no fears about this, as the sheer size and diversity of the parent group offers sufficient protection, he believes. On the other hand, Marangoni Tyre is small enough to be flexible and allow Mr. Vassura to make decisions quickly.
3,000 Turkish tyre workers returned to work yesterday after the Government had ordered a two-month postponement because of “national security issues”. The Government wants to reduce inflation from the current 60% to 20%. Unions wanted a 35% rise and were offered 26.5%, which was rejected. Last week the three main manufacturers – Brisa, Goodyear and Pirelli – took out a joint press advertisement attacking the action.
The subject of scrap tyres is one which continues to exercise the minds of all sectors of the tyre industry and, with a ban on landfilling of tyres imminent, alternative methods of disposal are being urgently sought. The UK Government has produced a number of reports on the subject and these are looked into as part of our feature on scrap tyre disposal. Also included are details of possible disposal methods and machinery as well as latest news on the subject, for example the temporary closure and planned refurbishment of the SITA tyres-to-energy power station in the Midlands. Those disposing of tyres are under increasing pressure; not only to find new outlets to take scrap, but also from steep rises in overheads such as fuel. The problem of scrap tyres affects the industry from top to bottom and most observers expect the Government to introduce some method of producer responsibility if the industry does not come up with its own solution in the near future.
There are reports that Michelin is on the verge of forming a joint venture with Chinese tyre maker Shanghai Huayi Group Corporation (SHGC). Michelin would not comment, but SHGC has been quoted locally as saying that the deal has been done and is waiting formal government approval.
The Venezuelan subsidiary of Ford has said that it will no longer fit Firestone tyres as OE on its Lazer vehicle and 350 truck. Goodyear tyres will be used instead. Bridgestone/Firestone says that this represents only a 2 per cent loss of sales in the Venezuelan market.
The US Senate, last night approved legislation prompted by the Bridgestone Firestone tyre recall. The new measures strengthen reporting requirements for automotive related manufacturers. The enforcement powers given to the National Highway Traffic Safety Administration allow them to impose civil and criminal penalties for misleading the government about auto defects which result in death and injury. The maximum civil penalty for violations has been raised from $925,000 to $15M, and prison terms of up to 15 years have been prescribed, alongside fines of up to $100,000 for withholding information in cases where death occurs. The legislation instruct NHTSA to conduct tests into SUV safety and issue rules requiring the fitting of safety devices to warn drivers of underinflated tyres.
The foundation stone for a MIRS-factory was laid in the presence of Ministerpräsident Koch from the area of Hessen/Germany. Pirelli is investing 100 million Euro to produce about 1.5 million ultra-high-performance tyres by the year 2005. MIRS will create 200 more jobs. In addition to its own investment, Pirelli will receive an additional government grant of about 15 million Euro for meeting special environmental requirements.
Goodyear announced that the firm had received notice from the National Highways Transportation Safety Administration (NHTSA) to a preliminary investigation into its Load Range E light commercial tyres. This follows on from a number of complaints and issues raised as a consequence of a New Jersey court case being defended by Goodyear. The lawyers for the plaintiff claim that Goodyear has been aware of a problem with the Load Range E and has been conducting a “silent recall”, both allegations being vehemently denied by the tyre company.