News from Notch Consulting, Inc.

June 8, 2020

Goodyear forecasts 50% drop in tire volumes in Q2

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 12:42 am

In a 424B filing to the Securities and Exchange Commission dated May 13, 2020, Goodyear Tire & Rubber provided an overview of its actions in response to COVID-19 and a view of the tire industry’s performance in 2020.

We currently believe that our largest volume declines will occur in the second quarter of 2020, with volumes down approximately 50% compared to the second quarter of 2019. Overhead absorption will also continue to be adversely affected by reduced plant production during the second quarter of 2020. We are currently planning for our production to be down almost 25 million units versus the second quarter of 2019 in order to reflect expected demand and to reduce inventory.

In addition, our other tire-related businesses are also being significantly affected by the weakening economic environment. Traffic and volume at our retail locations is low and the sharp drop in business and leisure travel is adversely impacting our aviation business. Our chemicals business is also feeling the effects of the decline in tire production. In total, the year-over-year earnings decline in our other tire-related businesses is expected to be about $150 million during the second quarter of 2020.

For the full year of 2020, we now expect our raw material costs will be a benefit of $50 million to $100 million compared to 2019, excluding transactional foreign currency and raw material cost saving measures. Natural and synthetic rubber prices and other commodity prices historically have been volatile, and this estimate could change significantly based on fluctuations in the cost of these and other key raw materials. We are continuing to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, to reduce the amount of material required in each tire, and to pursue alternative raw materials.

May 11, 2020

US Ford factories preparing to restart

Filed under: Auto, Coronavirus/COVID-19, Rubber — Notch @ 9:13 pm

On May 18, Ford Motor Co. will resume most North American vehicle production following the lifting of restrictions by Michigan Gov. Gretchen Whitmer, with parts depots resuming operations on May 1.

The Flat Rock Assembly Plant in southeast Michigan and Oakville Assembly Complex in Canada will remain closed until May 25.

May 5, 2020

Enviro completes share issue to Michelin

Filed under: General, Rubber, Tire Recycling, Tires — Notch @ 10:54 pm

Scandinavian Enviro Systems AV (Enviro) has strengthened its financial position by completing a directed share issue to Michelin.  The investment was part of a long-term strategic partnership that provides Enviro with significantly improved conditions for the global establishment of recycling plants.  A final agreement is expected to be completed by mid-2020.

Bridgestone Iowa plant confirms 8 employees test positive for COVID-19

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 10:10 pm

Bridgestone Americas Inc.’s agricultural tire plant in Des Moines confirms 8 employees have tested positive for COVID-19.  The company is addressing the outbreak using protocols established before Bridgestone resumed production on April 13.

Enterprise Crisis Management Team has been monitoring the spread of the coronavirus and consulting federal, state and local officials to coordinate risk mitigation and business continuity strategies.

Bridgestone said the plant will remain in production but will continue to monitor the situation closely and adjust as necessary.

April 28, 2020

Partial production resumes at one Apollo plant in India

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 12:43 pm

Apollo Tyres Ltd. has resumed partial production at its factory in Perambra, India after government directives exempted its operations from lockdowns, according to a stock exchange filing.

The tire maker idled production at other Indian facilities in Kalamassery, Limda, Gujarat and Chennaiother amid concerns over the COVID-19 outbreak, and will provide updates on the restart of production in these facilities as decisions are made.

Yokohama to restart Mississippi plant

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 12:21 pm

On April 27, Yokohama Corp. of North America will restart production at its commercial tire plant in West Point, Mississippi, after closure on March 28 due to the COVID-19 pandemic.

Yokohama will implement safety procedures based on CDC guidelines and local guidelines.

Nokian Tennessee tire plant to reopen

Filed under: Coronavirus/COVID-19, Rubber, Tires — Notch @ 11:54 am

On May 4, Nokian Tyres Inc. plans to restart production at its Dayton plant after a month-long closure due to the COVID-19 outbreak.  The decision is in line with steps the state has taken to reopen the economy.

The reopening will be a phased process starting April 27.  The company points to its “desire to provide stability for our employees” as a reason for the move, as well as its belief in the importance of tire makers as suppliers to the transportation industry “which has been deemed essential by the state and federal governments.”

April 17, 2020

European tire sales for Q1 show effects of COVID-19

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 9:50 am

On April 16, ETRMA (European Tyre and Rubber Manufacturers’ Association) released its figures for tire sales for the first quarter of 2020. Comparing the first quarter of 2020 to Q1 2019, there were 13% declines in sales of both passenger car and agricultural tires and a 6% decline in sales of truck tires. The impact is most apparent in the March data, when most of the shut-downs were instituted: comparing March 2020 to March 2019, there was a 26% decline in passenger car tires and 15% declines in both truck and agricultural tires. ETRMA estimated that 89% of Europe’s manufacturing capacity was closed as of April 7.

The drastic decline in tyre sales and replacements is partly due to the extensive measures taken by tyre manufacturers to protect the health and well-being of their employees and comply with government guidelines. This has led to the temporary closure of the European manufacturing facilities of almost all member companies. As of 7 April, ETRMA estimates that in Europe: 89% of manufacturing capacity is closed, 84% of the workforce is affected and 10% of R&D staff is unable to continue their activities. It is unclear when the European tyre industry will be able to resume its production activities and the international supply chain will be up and running again.

Additionally, there has been a substantial drop in demand due to the national lockdown measures across the European Union, which have affected vehicle and tyre purchases, driving behaviour and the number of miles driven. Fazilet Cinaralp, Secretary-General of ETRMA states that: “Both the suspension of the operational activities and the sharp drop in demand will have a long-lasting impact on the performance of our industry. This is the biggest challenge our industry has ever faced.”

 

April 16, 2020

Conti restarts some tire and MRG production in Romania

Filed under: Carbon Black, Coronavirus/COVID-19, General, Rubber, Tires, Uncategorized — Notch @ 10:07 pm

Continental A.G. restarted its tire plant in Timisoara, Romania on April 7, a company spokesperson announced. The plant was idled on March 25. Another plant in the same town producing belt and air conditioner lines was restarted on April 10; the plant had been idled March 30. ContiTech hose plants in Nadab and Carei, Romania remain idled, and most of the company’s administrative and R&D staff continue to work from home.

April 15, 2020

Cooper restarts Mexico tire plant

Filed under: Coronavirus/COVID-19, General, Rubber, Tires — Notch @ 9:43 pm

Tire Business (subscription required) reports that Cooper Tire & Rubber planned to restart its plant in El Salto, Mexico on April 13. Cooper’s tire plants in the US will remain closed through at least April 24. The plants in both Mexico and the US were idled on March 21. Cooper’s plants in Europe also are idle, but plants in China have reopened. Cooper said it is taking necessary steps to ensure worker safety at the El Salto factory, including social distancing, additional cleaning and disinfecting of equipment and facilities, and restricting visitor access.

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