TB EDITORIAL: Global tire evolution ongoing

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AKRON (Oct. 1, 2013) — The anniversary of Bridgestone Corp.'s purchase 25 years ago of Firestone Tire & Rubber Co. is a reminder that the global tire industry continues to evolve and that more changes in tire company ownership and leadership are likely to continue.

Consider two current happenings — Apollo Tyres Ltd.'s bid to acquire Findlay, Ohio-based Cooper Tire & Rubber Co., and plans by China's GITI Tire Pte. Ltd. to set up technical centers in Akron and Hannover, Germany.

Regarding the latter, GITI would become the first Chinese tire maker to establish a technical center in the U.S. Another Chinese tire maker, Triangle Group Co. Ltd., announced in 2011 it would establish a research, development and sales company, also in Akron, but its operating status is unclear.

A quarter of a century ago, foreign tire companies were on a buying binge, scooping up U.S. tire manufacturers to gain a foothold in this country and to expand their production capabilities globally.

Those deals included Continental A.G.'s acquisition of General Tire & Rubber Co., Pirelli & C. S.p.A.'s purchase of Armstrong Rubber Co., Group Michelin's takeover of Uniroyal Goodrich Tire Co., Yokohama Rubber Co. Ltd.'s buying Mohawk Rubber Co., and the granddaddy of them all, Bridgestone's purchase of Firestone.

When the dust finally settled, only Goodyear and Cooper remained among the top echelon of the world's largest tire makers with headquarters in the U.S.

Gurgaon, India-based Apollo's proposed acquisition of Cooper is just the latest attempt by a foreign tire company to acquire a U.S. firm and leapfrog into the Top 10 ranking of global tire makers.

At the same time, we are witnessing the beginnings of Chinese tire companies expanding their manufacturing and technical bases beyond their home country.

Although GITI's move to establish technical centers in two of the world's largest tire markets outside of Asia doesn't involve manufacturing — at least not yet — it's an indicator that the company is seeking to design tires tailored for these specific markets. If this effort proves successful, other Chinese tire manufacturers are likely to follow, so as not to be left behind.

Bridgestone's surprising bid for Firestone a quarter century ago ultimately propelled it to become the world's largest tire manufacturer. It will be interesting to see what the next 25 years brings.

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This editorial appears in the Sept. 30 print edition of Tire Business.

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