News from Notch Consulting, Inc.

March 20, 2009

Michelin’s February Tire Data Show Continued Declines, Possible Recovery in China

Filed under: General, Tires — Notch @ 5:10 pm

Michelin has released its February and year-to-date figures for the tire market, revealing continued steep declines in the tire markets of North America, Europe, Brazil, and Japan. One relative bright spot in the data is China, which showed substantial growth in some key segments.

In original equipment passenger car and light truck tires, European sales were down 44.7% in February (relative to February 2008), while North American sales were down 53.6%, and Chinese sales were down 1.3%. In replacement PC/LT tires, European sales were down 8.1% in February, North American sales were down 15.1%, and Chinese sales were up 17.6%.

In original equipment radial truck tires, sharp declines were registered in February in Europe (-64.2%), North America (-45.9%), Brazil (-57.3%), and Japan (-60.8%), while China saw growth of 2.8%. Replacement radial truck tire sales for February were also down sharply nearly across the board, including Europe (-33.1%), North America (-25.8%), Brazil (-25.0%), and Japan (-54.9%), while China saw growth of 0.3%.

Year-to-date figures were equally grim. Details are here.

Treasury Announces $5 Bil Program for Auto Parts Suppliers

Filed under: General — Notch @ 7:24 am

On March 19, 2009, the U.S. Department of the Treasury announced a new Auto Supplier Support Program designed to provide ailing U.S. auto parts suppliers with up to $5 billion in financing. The program is designed to stabilize the auto supply base and restore credit flows, thus “giving suppliers the confidence they need to continue shipping parts, pay their employees and continue their operations.”

According to a fact sheet (PDF) provided by Treasury, the program is designed to offer government-backed protection to parts manufacturers, ensuring they will receive money owed them for the products they ship, no matter what happens to their customers in the auto industry. General Motors Corp. and Chrysler L.L.C. already have signed on, the agency said.

Chemtura Files for Chapter 11

Filed under: General, Rubber Chemicals — Notch @ 7:13 am

Chemtura Corporation and its 26 US affiliates have filed for Chapter 11 bankruptcy protection. According to Craig A. Rogerson, president and CEO of Chemtura, the decline in order volumes due to the global economic recession significantly decreased Chemtura’s liquidity and cash flow, prompting the decision.

Chemtura, which filed in the U.S. Bankruptcy Court for the Southern District of New York, says the bankruptcy filing is designed to help the company complete a financial restructuring.

“Despite our efforts to increase liquidity, including through the potential sale of a business, our reduced liquidity position, combined with the anticipated expiration of our bank waiver, led us to determine that a court-supervised restructuring was the best course of action,” said Chemtura Chairman, President and Chief Executive Craig A. Rogerson in a statement.

The firm’s non-U.S. subsidiaries are not included in the filing, which was made in the U.S. Bankruptcy Court for the Southern District of New York.

The restructuring is being handled through Kurtzman Carson Consultants, which has details on the restructuring program here.

Self Inflating Tire Developers Seeks Partners

Filed under: General, Run-flats — Notch @ 6:54 am

Coda Development, inventors of the Self Inflating Tire (SIT), which won Tire Technology of the Year award at the Tire Technology Awards for Innovation and Excellence 2009, in Hamburg, Germany, is looking for partners to commercialize the product, the company said in a March 19 press release. The company is looking for suitable partners with sufficient resources and know-how to finalize the R&D process and produce pre-production prototypes of the SIT to undergo on-road testing.

The SIT uses atmospheric air to inflate the tire automatically while the vehicle is in motion, compensating for natural loss of pressure, and ensuring constant tire pressure over the lifetime of a tire, according to the company. Primarily designed to aid fuel economy and safety, the system consists of two components: the tube chamber serving the function of a peristaltic pump for the tire, and a managing valve to control the inflation.

Details on the product are available here.

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