PHOENIX-Lee Fiedler stood at the lectern, surveyed the crowded room and made a pledge to dealers attending Kelly-Springfield Tire Co.'s National Dealers Conference, March 1-3 in Phoenix. The president and CEO of the Cumberland, Md., tire maker told the 900 attendees representing 325 dealerships that he wanted a long-lasting working partnership agreement with them.
``Not one that will last for only a year or two,'' he said, ``but one that will carry us well into the next century and beyond as business partners and, equally important, as members of a family.''
A partnership, he added, based on mutual respect and trust.
Then he laid his cards on the table, outlining eight provisions for the dealers, ``designed to strengthen your business and ours.''
Kelly-Springfield, he said, pledges to provide dealers with:
1) New and exciting products to help keep dealers ``way ahead of other tire sellers.''
New tire lines like the ones announced at the dealer meeting, including the Charger HR, available in asymmetrical and directional tread designs, and the Armorsteel KSA premium steer tire, featuring an advanced-technology decoup-ling groove and stone ejectors located in the main tread grooves.
2) The ability to make a profit by making sure your dealerships remain the place in your area where customers buy Kelly tires. ``Not every store will have the line you offer,'' he said.
3) Tires representing ``true value'' to dealers and customers, Mr. Fiedler said, that dealers can sell at a fair price and make a fair profit in a marketplace of ``value-conscious'' shoppers.
4) Competitive tire pricing so dealers can make a good profit. This is related to providing value products, he said, ``but competitive pricing means we must be able to manufacture quality products at the best cost in the industry.''
5) Manufacturing reliability and the ability to provide dealers with quality tire lines all the time. Mr. Fiedler noted that the only purpose of the company's manufacturing division is to meet the needs of its customers and consumers.
He added that Kelly will increase its capital spending by $70 million in 1995, to keep its production facilities modern, efficient and cost effective.
6) Timely delivery of tires-an area where Kelly promises to improve, Mr. Fiedler said, because ``timely deliveries are key to customer satisfaction.''
7) Improved communications with dealers. The goal is to keep dealers informed about Kelly products and programs but also ``to improve the communication channels back to us,'' Mr. Fiedler said. ``We must know your needs to keep you competitive in your area. We must know what products your customers are asking you to handle.''
8) Continued support of such company programs as Live Wire, Kelly's telemarketing group for customer sales and service assistance, as well as support for creative and effective advertising and training for dealership employees.
In return for Kelly's efforts in the partnership agreement, Mr. Fiedler asked the company's dealers for only one thing-``to have the opportunity to earn your trust, to earn your respect and to earn the right to be your supplier of quality products.''
Touching on the industry globally, he said the outlook for 1995 calls for replacement and original equipment tire demand to grow in the world's major geographic regions-North America, western Europe and Asia Pacific.
``Growth of OE and replacement tire markets in all three major regions. . .is something that hasn't been seen in many years,'' he said.
However, this optimistic forecast could change should the Federal Reserve ``insist on continuing to raise the prime interest rate.''
The Kelly CEO also encouraged dealers to pass along tire price increases announced by tire makers in response to recent, dramatic increases in raw material prices, along with tight supply.
``You should plan to pass along these increases to protect your margins and assure your continuing growth,'' he said.
Mr. Fiedler noted that natural rubber prices have virtually doubled during the past eight months. Styrene and butadiene, ingredients that make up synthetic rubber, are up 75 and 70 percent, respectively, over last year. Carbon black is up 15 percent, and Mr. Fiedler said he has been notified of another pending 20-percent increase.
Kelly cannot make up the differences in escalating raw material costs through productivity advances alone, he said, predicting: ``If shortages continue, prices will climb.''