News from Notch Consulting, Inc.

September 18, 2020

Bridgestone closing French tire plant in 2021

Filed under: Carbon Black, General, Rubber Chemicals, Tires — Notch @ 1:44 pm

On September 16, Bridgestone Corporation announced plans to cease production at its 60-year-old passenger tire plant in Bethune, France in 2021. The company said the decision came in response to the challenging long-term outlook for the European passenger tire market, and that the closure represents the only viable path to safeguard the competitiveness of Bridgestone’s operations in Europe. All manufacturing operations at the site would cease, affecting 863 workers.

The current industry context for passenger tyres is threatening Bridgestone’s competitiveness in the European market. For the last several years, the market for passenger tyres has been facing strong headwinds – even without taking into account the impact of the COVID-19 pandemic. The passenger tyre market has seen its volumes stabilize over the last few years (average annual growth < 1%) while competition from low-cost Asian brands continues to increase (market share of 6% in 2000 increased to 25% in 2018) leading to general production overcapacity. This has resulted in pressure on pricing and margins, as well as overcapacity in the Low Rim Diameter segment, given a declining demand in LRD. And within Bridgestone’s overall European footprint, the Bethune plant is the least well positioned and least competitive.

Over the last years, Bridgestone has taken several measures, including attempts to increase the competitiveness of the Bethune plant. These have proven to be insufficient and Bridgestone has been losing money on tyres produced in Bethune for several years. Considering the current market dynamics, no improvement in the situation is foreseeable.

The decision drew immediate protest from the union and workers, who protested outside the plant the day following the announcement.

August 24, 2020

Bridgestone to close tire plant in South Africa

Filed under: Carbon Black, General, Rubber Chemicals, Tires — Notch @ 9:41 pm

Last week, Bridgestone announced a plan to close its bias tire manufacturing plant in Port Elizabeth, South Africa. The closure is in line with the company’s recently announced strategy to focus on premium profitable growth segments of its business. Bridgestone Southern Africa (BSAF) has initiated a Section 189 notice and a consultative process in compliance with the South African Labour Relations Act.

Bridgestone said that the Port Elizabeth plant, which is 84 years old, is specifically geared towards the production of older bias tires, which are globally in decline and being phased out in South Africa as it is an unprofitable market. The effects of a shrinking economy and an influx of cheap imports compounded by rapid changes in the tire industry has prompted BSAF to restructure its operations. The agricultural industry is shifting to radial tires, which are longer lasting, and the production of which is modern and high-speed. Converting the plant to produce radial tires would require a substantial investment that is not feasible in the current economy. The move will affect 252 employees. A second Bridgestone factory in Brits, South Africa, will remain in operation.

August 23, 2020

Cooper breaks ground on Indiana distribution center

Filed under: General, Tires — Notch @ 8:45 am

Cooper Tire & Rubber Co. is replacing it’s Franklin distribution center with a 1 million square foot regional facility in Whiteland, Indiana. The company held a groundbreaking ceremony on Aug. 18 and expects to open in early 2021.

The new center is one of six U.S. regional distribution centers operated by Cooper and will provide increased capacity for product storage and enhanced modern efficiencies.

August 20, 2020

Goodyear responds to Trump tweet

Filed under: Tires — Notch @ 2:42 pm

Yesterday, Goodyear Tire & Rubber Company issued a press release responding to President Trump’s tweet calling for a boycott of the company’s products. Below is the text in full:

AKRON, Ohio, August 19, 2020 – A Message from Goodyear to Our Customers, Partners and Associates:  

Yesterday, Goodyear became the focus of a conversation that created some misconceptions about our policies and our company.  For those not aware, a widely circulated image sparked a strong reaction, and we wanted to take the opportunity to provide some important context to the visual and our policies. 

First, the visual in question was not created or distributed by Goodyear corporate, nor was it part of a diversity training class. To be clear on our longstanding corporate policy, Goodyear has zero tolerance for any forms of harassment or discrimination. To enable a work environment free of those, we ask that associates refrain from workplace expressions in support of political campaigning for any candidate or political party, as well as similar forms of advocacy that fall outside the scope of racial justice and equity issues.

Second, we appreciate the diverse viewpoints of all of our more than 60,000 associates, which are at the heart of many of the policies we establish. Fostering an inclusive, respectful workplace is important to establish teamwork and build culture, which is another reason we ask associates not to engage in political campaigning of any kind in the workplace – for any candidate, party or political organization.

Third and finally, Goodyear has always wholeheartedly supported both equality and law enforcement and will continue to do so. These are not mutually exclusive. We have heard from some of you that believe Goodyear is anti-police after reacting to the visual. Nothing could be further from the truth, and we have the utmost appreciation for the vital work police do on behalf of our shared communities. This can’t be said strongly enough.

August 14, 2020

Conti expects slight recovery for remainder of 2020

Filed under: Auto, Coronavirus/COVID-19, General, Tires — Notch @ 12:49 pm

Continental A.G.’s tire group expects a slight recovery in the tire market for the remainder of 2020, despite suffering a 23 percent drop in first-half sales revenue,

Rubber & Plastic News reports that Conti attributes decline in sales volumes for passenger and light truck tires to the negative impact the COVID-19 pandemic.

The German group said it expects demand for replacement tires for cars and light commercial vehicles to “normalize” in the third quarter, although that means volumes in Europe will be 10 percent to 15 percent lower than a year ago and 5 percent to 10 percent lower in North America.

Continental invests $4 million to expand Indiana site

Filed under: Auto, General, Rubber, Tires, Uncategorized — Notch @ 12:48 pm

Rubber & Plastic News reports that Continental A.G. is planning a $4 million expansion of their Auburn, Indiana facility, transforming the facility into a research, development and technology hub for its ContiTech Vibration Control business.

The $4 million investment will not only upgrade the facility, it will bring more than 45 new jobs to northeastern Indiana, according a joint news release issued by Continental and the Indiana Economic Development Corp. It also will allow ContiTech to consolidate its vibration control technical center operations, currently in Michigan and Canada.

The Indiana facility should be fully operational by 2024.

Despite drop in sales, Apollo sees strong recovery

Filed under: General, Rubber, Tires — Notch @ 12:45 pm

Apollo Tyres Ltd. suffered a 34 percent drop in sales in the quarter ended June 30, although the company reported a strong recovery throughout the month of June, according to Rubber & Plastic News.

“While the first half of the first quarter was almost a complete washout, our performance has been excellent since the markets opened up, especially in the replacement market,” Apollo Chairman Onkar Kanwar said.

Apollo also reports its European operations results were better than the industry average, despite COVID-related challenges.

August 12, 2020

Earnings down double-digits for Toyo 1st half sales

Filed under: Auto, General, Tires — Notch @ 8:39 pm

On August 7,

Toyo Tire released financial results for the second quarter of fiscal year 2020, projecting double digit declines.  Toyo posted 48.3% lower operating income for the six months ended June 30 on 15.7% lower sales. The company’s operating ratio fell from 8.6% to 5.3% and operating income fell to $73.4 million on sales of $1.39 billion. Net earnings fell to $4.8 million, down from 93.1%. Negative effects of lower sales and higher production costs were cited for the decline. Toyo said that tire demand hit bottom in April, and the replacement market has begun to recover in some regions, including North America. As auto manufacturers have resumed production, the size of the demand decline for tires for new vehicles has been shrinking.

Bridgestone expects 2020 sales to drop 23% year-on-year

Filed under: General, Tires — Notch @ 7:53 pm

On August 7, Bridgestone Corporation released financial results for the first half of 2020, attributing the negative effects of the COVID-19 pandemic for the 68.3% drop in operating income. Bridgestone forecasts the trend will continue for the full year, with sales falling about 23% shy of fiscal 2019 revenue.  Bridgestone reported a net loss of $203.7 billion, with an operating income of $477.2 million for the first half of the fiscal year on sales of $16.1 billion. Primary reasons for the lower earnings include reduced volumes and currency depreciation impacts. Gains from lower raw materials and operating expenses and improved price/mix effect helped offset the negative factors. Bridgestone noted a “particularly large depression in European and North American markets,” which prompted ongoing caution with regard to market conditions in those regions despite signs of recovery since the beginning of June 2020. The company said it expects moderate recovery in the near term but a “demand drop due to 2nd wave of COVID-19 forecasted over Q4,” with less impact of second wave expected compared to first wave.

 

July 17, 2020

COVID causes steep drop in European replacement tire sales in 2Q

Filed under: Coronavirus/COVID-19, Tires — Notch @ 6:13 pm

On July 14, the European Tyre and Rubber Manufacturers’ Association (ETRMA) released data for its members replacement tire sales for the second quarter of 2020. The figures show that the COVID-19 pandemic caused the worst sales results in the history of ETRMA.

Comparing the second quarter of 2020 to Q2 2019, passenger car tires sales declined by 31%, while the decline for the first half of 2020 was 22%. In truck tires, Q2 sales declined 23%, while sale for the first half of 2020 were down 14%. Agricultural tires fared the best, seeing a decline of just 4% in Q2 and 9% for the first half of 2020.

After having been shut for an average of 33 days due to Covid-19, all tyre manufacturers in Europe slowly resumed their production in May when most European countries eased their lockdowns. As a result, there was a slight upward trend in tyre replacement sales visible towards the end of the quarter. Whether this trend will hold remains to be seen in the coming months. Being a global industry, the recovery of the tyre sector is not just dependent on Europe’s situation but how other parts of the world and global trade routes continue to be impacted by and address the pandemic.

 

Older Posts »

Powered by WordPress.com.