LEAVITTSBURG, Ohio-Denman Tire Corp. celebrated its 75th anniversary July 28 with tours of the company's 75-year-old tire plant in Leavittsburg followed by a press conference at a nearby resort. But what made the occasion even more special was the realization that reaching this milestone wasn't a sure bet as recently as two years ago, company officials acknowledged.
``In 1992, Denman was having declining revenues, was not making money and we had the difficult decision of whether to close down the company or give it one more chance,'' Thomas R. Barry told attendees at the celebration. He is group executive, automotive products, for Eagle Industries, Denman's parent corporation.
Luckily for Eagle as well as Denman's employees and customers, the decision to pull the plug never came.
Instead, Eagle gave the company's new management team-headed by President and CEO Charles R. Wright and Executive Vice President of Sales and Marketing James G. Pearl, both former Pirelli Armstrong Tire Corp. executives-one more opportunity to turn the company around.
It's a move that appears to have paid off.
Today, Denman, one of the nation's smallest tire makers, is no longer losing money. In fact, it turned a small profit in 1993 and so far is in the black in 1994.
Revenues have reversed their declining ways, as well, rebounding to $51.1 million in 1993 from lows that had dipped below $40 million. Net sales for 1994 are projected at $55 million.
Company officials are no longer talking survival, but rather expansion. Optimism abounds.
``As we go into 1995, we will be one of the few tire companies with capacity problems and we will have to be creative in how we manage to increase sales,'' Mr. Barry said. ``We can talk joint venture, outsourcing, expanding the plant. We will be looking at each of these options.''
That's a far cry from 1989-'91, when people weren't sure Denman was going to make it, Mr. Wright said. Back then, layoffs were part of the company's vocabulary and the firm was in what he termed ``a death spiral''-sales were falling and costs were going up.
Denman's former officials addressed this problem by raising prices, Mr. Wright explained. ``Rather than try to fix the cost problems inside (the business), they raised prices and almost buried the company.''
In those days, it wasn't uncommon to have 150 of the 350-person workforce off the job on layoffs.
Not anymore. Last year, for the first time in seven or eight years, the company hired new employees. Laid off workers have been recalled.
Denman's recovery started in 1992, Mr. Wright said, when Eagle Industries decided the firm needed a new marketing approach. The tire maker hired Mr. Pearl and National Sales Director Donald W. Moore, a former co-owner of Empco Industries Inc. and a veteran of Pirelli Armstrong, who devised a plan that would grow the Denman brand but not at the expense of private brands, the company's mainstay.
The strategy worked. In 1991, 85 percent of the company's business was in private brands and 15 percent in Denman. In 1993, that ratio was 50/50.
``We just grew the Denman brand faster than the private brand business,'' Mr. Wright said.
Upon becoming president Jan. 1, 1993, Mr. Wright also set about addressing the inside cost structure of the corporation, a situation he said has improved but is an on-going quest.
During the past two and one-half years, Denman also shored up its customer base, signing 100 new dealer accounts-``100 dealers who can bring volume to us, and have, in the Denman brand,'' according to Mr. Wright.
``I had not been here 90 to 100 days when I announced to the employees that our sales problem had been solved,'' he said. ``It is now up to the factory to make the tires and get them to the customers that we're continuing to sign at a very rapid pace.''
Mr. Wright is confident of Denman's future as a niche maker of specialty tires.
He projects annual sales growth of 5 to 8 percent over the next three years.
This means that within 12 months the tire manufacturer will face the decision of how to go about expanding its plant production. ``With the present equipment and the present mix of product, we can grow 15 to 20 percent, max,'' he said. ``Then something's got to change.''
Already Denman is outsourcing some tires from India and China.
Mr. Wright is also optimistic about the recently signed contract with United Rubber Workers Local 98 which ``better positions us for the future.'' The three-year pact provides for increased pay and benefits, but includes work rule changes to boost productivity.
Mr. Wright said he is convinced that if the company satisfies its customers and offers excellent quality products delivered on time at competitive prices, Denman's future will be solid.
``The fact that we are even here today is proof that old Rust Belt relics can compete,'' he said.