AKRON-Times rarely have been better for specialty tire makers supplying bias-ply lines. Major tire makers are exiting most bias markets, the U.S. economy is running at full throttle and the weak dollar is staving off imports, which means specialty tire makers can thrive-for a while-in the ``dying'' bias market, said Harry Millis, an analyst with Fundamental Research Inc.
Big companies stand to gain more by converting to radial, where the pricing and the future look better, Mr. Millis said.
Small tire firms are geared toward low-volume runs and can produce a wide array of bias types and sizes in a relatively short amount of time, according to Charles R. Wright, president and CEO of Denman Tire Corp.
Specialty tire makers view the bias market differently than the majors, said Dennis Terwilliger, CEO of Condere Corp., parent of Fidelity Tire Manufacturing Co.
Bias tires, once the only game in town, have become a niche where growth through increased market share and exports can more than offset shrinking demand, Mr. Millis said.
Specialty Tires of America Inc. is spending $30 million on a new plant in Unicoi, Tenn., gambling that specialty bias tires will be in demand for years to come. The Indiana, Pa., firm is so confident, it's constructing the unit at a 50-acre site, leaving room to double the factory's floor space, said Tom Lorden, senior vice president of manufacturing and technical.
Industry reaction to the new plant, which will produce 400,000 units annually, was mixed.
``It's a niche and they're going to exploit it,'' said Donald DeScenza, an analyst with Donald DeScenza & Co. Inc. ``They basically have the market to themselves. It sounds like it's viable.''
The Unicoi plant is a viable project, but likely will not be as attractive an investment in a few years, when the economy levels out and the dollar strengthens, Mr. Millis said.
Teaming up with companies that have excess capacity perhaps is a more viable solution to grabbing more market share, as it reduces the risks, he added.
Specialty Tires is trying to milk an empty cow, said Maurice Taylor Jr., CEO of Titan Wheel International Inc., parent of farm and industrial tire maker Titan Tire Corp. ``It's the same old story. Everybody sees demand and adds capacity at the same time. Then you have overcapacity.''
The list of major tire makers exiting or phasing out bias tire production continues to grow: Uniroyal Goodrich Tire Co., Dunlop Tire Corp., Cooper Tire & Rubber Co., Continental General Tire and Goodyear have all left portions of the bias market since 1992.
Perhaps most notable, Pirelli Armstrong Tire Corp. (PATC) sold its Des Moines, Iowa, bias farm tire plant to Titan last July.
Some former Armstrong-brand customers were lost in the shuffle, and specialty tire makers are gaining market share, Mr. Millis said.
Titan's Mr. Taylor disagreed, saying his company has increased its replacement farm tire market share to more than 30 percent from the 20-percent share previously held by Pirelli Armstrong.
Although Mr. Lorden claimed Pirelli's departure didn't affect Specialty Tires' decision to build a second plant, Mr. DeScenza said the Pennsylvania firm is trying to pick up former PATC customers.
Denman also benefited from PATC's exit, said Mr. Wright. ``And when Goodyear walked away from some of this bias business eight months ago, that also created some opportunity for us.''
Firms that benefit most are the first ones out of a declining market and the last ones left in, said Woody Arnold, Dunlop Tire Corp. vice president of marketing.
Once there is a trend toward the adoption of the radial by a market segment, it generally takes less than 10 years for the radial to dominate, Mr. Millis said.
By 2000, he expects bias production will be limited to specialty applications, such as antique cars and container-chassis trailers.
Radial tires now hold more than 99 percent of the U.S. passenger tire market, 80 percent of the light truck and off-the-road segments, and about 85 percent of the medium truck tire sector, according to Tom Will, manager of Goodyear's management information.
But there are bright spots. The farm and heavy truck replacement sectors are primarily bias, but the majors control the market and the radial is gaining ground, he said.