AKRON-After several years of tinkering with its specialty tire business, Goodyear has decided to quit producing certain low-volume original equipment and replacement tires and convert that production to farm tires. On Aug. 15, the company announced it will no longer produce lawn-and-garden, industrial and small, highway trailer tires at its subsidiary Kelly-Springfield Tire Co.'s Freeport, Ill., plant.
Goodyear said it will continue to supply OE and replacement tires for all-terrain vehicles, golf carts and farm implement and agricultural equipment, but that some portions of the specialty product line are ``no longer a strategic fit'' with its plans for future growth.
Specialty tires account for less than 2 percent of Goodyear's U.S. replacement sales, the firm said.
Goodyear will discontinue the lines Oct. 15, according to a company spokeswoman, but a start-up date for the added agricultural tire production and cost estimates for the switchover at the Freeport plant were not available.
``We are concentrating on growth areas of the tire business,'' said Sam Gibara, executive vice president of Goodyear's North American Tire region.
``Our farm tire business is strong and growing and will make more efficient use of our large production facilities.''
The change will not affect employment at the Kelly-Springfield plant and probably will cut fewer than 10 sales positions associated with the discontinued lines, a Goodyear spokesman said.
The decision's impact on the 25-member independent ``master distributor'' network Goodyear created to handle specialty tires will also be minimal, according to two of those tire dealers.
``I'm sad, Goodyear had a good product to sell,'' said John Strouf, owner of Cedar Rapids Tire Co. in Cedar Rapids, Iowa.
He became a master distributor for Goodyear specialty tires shortly after the tire maker began granting exclusive rights in 1991 to about 25 dealerships to wholesale its specialty tires to retailers, Goodyear franchises, company-owned outlets and independents.
That move was made, Goodyear said at the time, to relieve dealer inventory problems and complaints about slow shipping times.
Mr. Strouf said Goodyear's specialty lines were ``by far'' his best-selling tires. Recently, the dealership began distributing similar tires from Carlisle Tire & Rubber Co. and Dico Tire Inc., a unit of Titan Wheel International Inc.
He added, however, that he will not be able to estimate the total impact on his business until he talks to Goodyear in August about how the company intends to handle standing accounts.
Similarly, Ross Kogel, owner of Troy, Mich.-based Tire Wholesalers Co. Inc., said he must ``wait and see'' how Goodyear intends to exit the market before determining any impact on his business.
Tire Wholesalers-which derives about 20 to 25 percent of its specialty tire business from Goodyear products-will not be too adversely affected, he surmised. Tire Wholesalers currently is sitting on almost $200,000 worth of Goodyear specialty tires, but sells mostly Carlisle and Dico tires.
Who will absorb Goodyear's abandoned market share?
Harry Millis, an analyst with Cleveland-based Fundamental Research Inc., said specialty firms like Carlisle Tire stand to gain.
But Carlisle Tire President Rick McKinnish doesn't see Goodyear's departure affecting the specialty tire market. ``I think they've been de-emphasizing (those lines) over the past several years. I just don't see much impact.''
Much of the market share will be absorbed by foreign marketers because ``Carlisle and Dico are pretty much at capacity,'' said Tire Wholesalers manager Greg Burt.
But where the added specialty tires come from is largely a moot point, Mr. Strouf said. ``There will still be tires to sell. They'll just have to come from somewhere (other than Goodyear) now.''
Beth Ann Earle in Akron contributed to this report.