Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/449261
MTD January 2015 Your turn Using common sense trumps overreacting, reader says Dear Editor: It seems like the human condition never changes, so we need to be reminded of common sense principles in times of overreacting. Your excellent commentary in the November issue of MTD is one such timely reminder. I hate to admit it, but I jumped the gun on Richard Jewell in the 1996 Olympic Park bomb- ing and who I thought was responsible for the 1995 Oklahoma City bombing. I was totally wrong in my assumptions in both cases. We had a bit of overreacting with the 1950's McCarthyism, as well. Today I will be more patient with custom- ers, carriers and vendors in the spirit of the MTD column. It wouldn't be a bad idea if Gannet, the New York Times, Hearst newspapers, etc., ran this column. You made an important point without sermonizing or hiting readers over the head with a tire iron. Good job. David Walsh, Sales Director Dacotah-Walsh Tire Inc. Chanhassen, Minn. Question of the month: Each month we ask members of our National Advisory Council (NAC) a question or questions on a current hot topic. Tis month we asked, "For a second time, tarifs have been levied on consumer tires imported fom China. How will this afect your business?" Here are some of their responses. 1. Tings will be changing for entry-level customers. 2. In the short term, margins will increase. Mid- to long-term is dependent on what the majors do with pricing. 3. Te short-sighted and special interest placating tarif decision is bad economics, bad diplomacy, bad politics and harmful to U.S. consumers. One possible future result of this tarif which may afect our business may be the fact that China is the most signifcant buyer of U.S. government debt, and has already expressed concern about the future value of the dollar. If China stops buying U.S. T-bonds, there might not be an efective market for them. 4. Any price increase in the marketplace allows us to make more proft on our existing inventory. So far the tarif has increased the market value about 5%. 5. Since we operate in a small town, we deal with the whole spectrum of price range of the tires, and the ability of the people to pay for them. Te "price increase" on the lower- priced Chinese tires impacts our customers who have a lower income, forcing them to pay a higher price. Te non-tarif tires are there, but at a higher price. With the last time as an example, we will get more requests for used tires, the tires will be run longer, and price resistance will be greater. I don't feel that our business was adversely impacted, but we have the young families who have problems making ends meet, and we have nothing to sell them in their price range. 6. Unfortunately, the consumer will be afected by having to pay a higher price. 7. Unfair subsidies the Chinese government has granted to tire exporters both directly and indirectly have resulted in thousands of lost American tire manufacturing jobs. In South Carolina, we are quite pleased to see these manufacturing jobs return to our state as we lead the nation in tire production. 8. Tis will obviously increase our costs, and if it follows suit to the last tarif the domestic manufacturers will increase their pricing. Consequently, we will see increases in our inventory costs and also ultimately retail prices. 9. I know the last time it raised the price of all tires. Te domestics increased the prices which hurt the consumers. Te only ones that made out were the domestic tire manufacturers. Our shop does not sell many Chinese tires. If other shops were like ours that sell benefts and features instead of price only, we would not need these tarifs. Te Chinese would swim in tires! What's on our NAC's mind? We are making a commitment to training our people. Wow! It is really paying of. Our employees are our BEST investment. Jef Cohen, Co-owner Traction Wholesale Center Bensalem, Pa. Recent 2014 data from the National Small Business Admin- istration is alarming, especially when detailing how America's small businesses are dealing with rising health care costs, what kind of benefts they ofer and how the Afordable Care Act (ACA) is impacting their business. Tirty-four percent of small businesses report holding of on hiring a new employee while 12% report they had to lay of an employee. Fifeen percent report they plan to drop coverage in the coming year — up from just 2% that reported dropping coverage in the last year. Having just renewed our health plan for another year, this has been on our mind! Tripp Lee, General Manager Frasier Tire Service Inc. Sumter, S.C. Join Modern Tire Dealer's National Advisory Council Each month, Modern Tire Dealer is guided and infuenced by a select group of readers — members of our National Advisory Council. Tese members' opinions are the heart of the monthly Your Marketplace column, compiled by industry analyst Nick Mitchell. If you'd like to join this prestigious group, please let us know. We'd love to hear from you. Contact Editor Bob Ulrich at Bob.Ulrich@bobit.com or call (330) 899-2200, ext. 11. 82