Modern Tire Dealer

JUN 2018

Magazine for the professional tire industry

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M T D J u n e 2 0 1 8 4 E d i t o r i a l I t takes a little over eight years to write 100 editorials for a monthly magazine. I reflected on my first 100 in July 2009, right in the middle of the Great Recession. at was editorial No. 101. Now it's time to look back on my second 100 editorials, which was postponed a month because of a marriage. No, not the royal marriage of Prince Harry and Meghan Markle — sorry, the Duke and Duchess of Sussex — but the surprise wedding of Goodyear Tire & Rubber Co. and Bridgestone Americas Inc. For better or worse, the two Tier 1 companies merged their wholesale divisions into TireHub LLC. ey are in the process of making sure the logistics of such a potentially grand and thought-provoking partnership (see Editorial No. 201) are handled to their mutual satisfaction. You will be quick to note that the past issues on which I commented have not gone away. Editorial No. 102 (August 2009): Against my objections, the International Trade Commission (ITC) and the Obama administration were getting ready to impose hey countervailing and anti-dumping duties on consumer imports from China. Over the next three years, Chinese imports dropped dramatically. Overall imports did not, however, as low-cost radials from other low-cost countries filled the void le by not only the decrease in Chinese imports but also the decrease in the number of low-end radials produced by domestic tire manufacturers. Still, the tariffs had an effect; they led to an increase in consumer tire pricing (see Editorial No. 136, November 2012). ose tariffs ended in September 2012. ree years later the ITC decided China had not learned its lesson, and the Department of Transportation (DOC) once again implemented high tariffs in mid-2015. Fortunately, prices dropped for the year thanks to the following: low raw material costs; continued subsidies from the Chinese government; desperate Chinese manufacturers looking for cash flow; and greater supply than demand. Pricing eventually caught up with the tariffs. In 2017 the average cost of a consumer replacement tire was $128, higher than the $122 average in 2015, but still lower than the $135.27 average in 2012. It looks like tariffs on Chinese imports are a part of govern- mental routine, and as such are not going away. Here's some good news, though: Pricing should drop this year, thanks to the DOC's decision to drastically lower the tariffs following a regular review. Editorial No. 122 (July 2011): I believed that a new tire label- ing standard was for all intents and purposes a done deal when the National Highway Traffic Safety Administration (NHTSA) decided to revamp the Uniform Tire Quality Grading system by replacing the temperature resistance grade with a rolling resistance grade against the industry's objections. All that was le was to hammer out the details. at was eight years ago. Roy Littlefield IV, the Tire Industry Association's director of government affairs, says there remains no legislative update on tire labeling. "At this point, it will be done through regulation, and things are moving slow at NHTSA without an administrator appointed yet." e exact same comments apply to tire registration, which became law in 2015 (see Editorial No. 169, August 2015). Editorial No. 164 (March 2015): Was Goodyear selling tires online a game changer? I answered that question in Editorial No. 195 late last year: No. Editorial No. 172 (November 2015): Mike and Charlene Herchick of Herchick's Tire Service in Mace - donia, Ohio, said the pricing advantage held by large retailers such as Discount Tire, Walmart and Conrad's Tire Express & Total Car Care was putting them out of business. At one time they sold an average of 20 to 40 tires a day. During the winter months it could be up to 70 a day. But when retailers with greater buying power moved in, the numbers dwindled. When they reached single digits, Mike feared the worst. "I'm at the wrong place at the wrong time now," he said in 2015. "irty years ago, I was at the right place." His reputation for honesty and good customer service had kept him afloat even when the town acquired one-third of his property through eminent domain. It was not enough anymore. "It was depressing to think that my business might not be worth anything," he told me recently. "I was ready to close the doors for good." When a local dealer, City Tire Pros, wanted to expand into Macedonia, Mike found out he was wrong; the mom-and-pop tire dealership really was worth something. Over a two-year span he and his wife sold the business, then the property. "It was a blessing they showed up," he said. And I understand the location, under the direction of City Tire Pros, is doing well, too. As for a preview of what to expect for Editorial No. 301 (assuming I make it that far), I'm sure I will have a lot of things to say about the effect of TireHub on our industry. ■ If you have any questions or comments, please email me at bob.ulrich@bobit.com. 'IT WAS DEPRESSING TO THINK THAT MY BUSINESS MIGHT NOT BE WORTH ANYTHING.' Eight years, 101 editorials REVIEWING MY POINT OF VIEW LEADS TO PERSPECTIVE Bob Ulrich By

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