SAN FRANCISCO-A year ago, General Tire President Alan Ockene was optimistic about his company's chances to return to profitablity after several years in the red. He thought then that original equipment sales would grow, which they did.
He believed the economy would get better, and it did, albeit in fits and starts.
And, from a profit margin standpoint, he expected business would improve.
But it didn't.
As a result, General is looking at a loss of more than $25 million in 1993.
As for 1994, Mr. Ockene sees a similar scenario unfolding. OE sales and the general economy are again expected to improve.
``The same factors that existed last year, which were the basis for my optimism, exist at an even higher level,'' he said in an interview during the company's recent dealer meeting in San Francisco. ``But I'm once burned, twice shy.''
In 1994, Mr. Ockene plans a stepped-up effort in private brands and a push to re-establish the Continental brand in the U.S.
At the same time, he hopes to reap the benefits of aggressive steps taken during the past year to reduce General's overhead.
Last year, Mr. Ockene slashed the company's labor force by 300 and eliminated a slew of top managers, including Edward Kissel, executive vice president of the passenger/light truck division, and Alexander MacLean, vice president of sales and marketing, both of whom resigned.
``We virtually cut out a whole level of management,'' Mr. Ockene said.
While General announced Jan. 31 it would cut 100 more jobs companywide in 1994, Mr. Ockene thinks dealers will see more stable staffing, especially among employees they contact regularly.
``We've reduced that to a point that...is beyond the possibility to reduce further if we're going to give the dealers adequate service,'' he said. Still, cost cutting will continue in 1994, particularly in the area of sales and general expenses.
General's reorganization into two divisions-commercial and passenger/light truck-is another big change that occurred in 1993, Mr. Ockene said.
``This will allow our passenger and light truck sales team to spend more time with you working on joint marketing and sales plans,'' he told dealers. ``We want to help you sell, not just jam more tires into your inventory.''
The company also has expanded its commercial sales force ``so they are at your disposal to visit accounts.''
In 1994, General will reinvigorate its private brand efforts, which had taken a back seat recently to the firm's flag brands.
``We know we have some catching up to do in regard to (private brand) product offerings,'' Mr. Ockene told dealers. General is going to do its best to increase its private brand business.
The tire maker also expects to relaunch the Conti brand in the U.S. during 1994, positioning it as the firm's premium tire line.
At one time, Continental A.G., General's parent, sold nearly 1 million Conti brand tires a year in the U.S., according to Bernd Frangenberg, General's new executive vice president of sales and marketing. That total has since fallen to several hundred thousand.
Mr. Frangenberg said the goal in the next two to three years will be to return the brand to the million-tire level. In a market the size of the U.S., that ``really isn't much of an ambitious goal,'' he said.
In September, General reorganized its sales efforts for the Conti brand, creating an authorized Conti dealer program and direct dealer distribution. The aim is to boost the brand's premium image and establish a consistent advertising campaign.
Mr. Frangenberg said he sees the possibility of selling the General and Conti brands together as a package through one sales force. ``I think the answer is the multi-brand strategical approach,'' he said. ``We have a lot of experience with that in Europe.''