Modern Tire Dealer

APR 2017

Magazine for the professional tire industry

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MTD April 2017 ALSO IN CTD 2017 MTD Top 50 Retreaders in the U.S. . . . 44 The latest heavy-duty tire changers are designed for wide-base tires . . . 47 'Take your customers out of the tire business' . . . 49 Commercially viable . . . 50 'Tires have become a commodity' Top retreaders prepare for intense competition following the federal government's tariff decision By Ann Neal F or the first time since Modern Tire Dealer began rank- ing retreaders in 1988, Goodyear Tire & Rubber Co. is not in the No. 1 spot. e company did not specify the reasons for its lower production totals, but the overall retreading industry has been affected by high volumes of low-cost tires from China. For a while, it looked as if protective tariffs would give U.S. retreaders a chance to rebuild the markets devastated by low-cost Chinese tires. e possibility vanished in February 2017 when the U.S. International Trade Commission (ITC) voted to not levy duties on Chinese truck and bus tires. e ITC decision le many respondents to Modern Tire Dealer's Top Retreaders survey incredulous. "All of the information that I see points very clearly to the fact that Chinese tire companies are dumping their truck and bus products into the American market," says Jon Langerak, president of Wonderland Tire Co. Inc., which ranks No. 69 in this year's MTD's Top Retreaders list. Since the ITC's vote, Langerak says his inbox has been filled with emails from Chinese tire companies offering new tires priced below the cost of a quality retread. He cited one advertising trailer tires for $104 and drive tires for $125, adding that such emails are a regular occurrence now. "is decision will definitely affect the tire industry and tire pricing negatively. New tire and retread pricing has been stagnant and even decreased from four years ago. is is almost entirely the result of the cheap Chinese truck and bus tires being imported into this country. I predict that most if not all of the new tire and retread price increases that were to take effect in March or April will not take place or be significantly reduced." Langerak sees no relief. "Most retread plant owners and sales people I have had communication with state that their number one concern today is the dumping of Chinese new tires into the marketplace. Jobs and retread plants are at stake in this decision, and there will be jobs lost and plants closed if this trend continues." (For details on the ITC's reasoning for its decision, see page 8 of this edition of MTD.) Bob Majewski has been in the tire industry for 53 years. "I watched the passenger tire retreading disappear with low-cost tires. Now if the new tire companies have their way they will run truck tire retreading out also," says Majewski, who is chief technical officer at Sumerel Tire Service Inc. Newport, Ky.-based Sumerel Tire Service is ranked No. 54. Noah Hickman, president of H&H Industries Inc., notes that in West Virginia and eastern Kentucky, the mining busi- ness has increased since the November election. "As we close February, retread and repair business in this area is beer than it has been in the past two years and mining companies are more optimistic. Since January, the natural rubber price has increased, so our costs have jumped up. Almost all the major manufacturers have increased their prices, but the import tires and their cheap costs are now our biggest problem." Hickman's Oak Hill, Ohio-based company is in the No. 23 spot. Central Tire Corp. President Terry Westhafer says a tariff would have helped his unit volume immensely. "Now that tariffs are removed I expect an ever-increasing flood of Chinese truck tire imports. e problem will become worse than ever." Central Tire Corp. is based in Verona, Va. A lot of tire manufacturers were counting on the tariff, accord- ing to Kevin Carr, director-tire division of TravelCenters of America LLC's TA Truck Service Commercial Tire Network. "I think everybody was gearing up for a tariff. Without that I've seen a scramble. e number of vendors that have been calling us since this tariff was stricken has been unbelievable. Everybody who thought they weren't going to be able to sell tires here is now calling us." e ITC decision will make the retread business tougher, according to Steve eissen, an owner of T & W Tire and Retread Inc. in Oklahoma City, Okla., which is ranked No. 27. "Now you can buy a Chinese tire for as lile as you can cap a tire. It will be much more difficult to sell a cap and casing." Jeff Lecklider, president of Gem City Tire Inc., says that while his cap and casing sales are down, his custom retread- ing business is up. "e tariff decision is concerning, but not earth-shaering. e part of our business where we pick up Commercial Tire Dealerâ„¢ The tire molding area at Wonderland Tire's retread plant. The company has been in the retread business since 1983. 36

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