CHICAGO-What they didn't talk about was as telling as what they did discuss. A year ago, when Continental General Tire Inc. (CGT) executives traveled the country holding regional meetings to find out exactly what was on the minds of their dealers, boy did they get an earful.
Easily 75 percent of their discussions consisted of General Tire dealers venting their frustrations over having to compete product-to-product with Sam's Club, CGT's largest customer.
How things have changed!
Once again CGT has taken to the road to talk with its customers, but Sam's seems to be no longer provoking much outcry. And this time around the quality of CGT products-another bone of contention in the past-also no longer appears to be in question.
At least that was the case when TIRE BUSINESS attended a recent regional meeting in Chicago at the invitation of CGT President Bernd Frangenberg, who also welcomed 14 CGT dealers from states including Illinois, Wisconsin, Indiana and Michigan with the overture, ``We have nothing to hide.''
The company has been conducting 13 such regional meetings in the U.S. and Canada.
``Feel free to tell us where we're delinquent,'' Mr. Frangenberg urged. The dealers usually did.
CGT's product quality has finally reached a level of excellence that is no longer a point of discussion, he told dealers. Since last year, the company has reduced costs and inefficiencies in its plants and realized savings through improvements to the tune of at least $3 million. ``Our internal adjustment figures are really down to nothing,'' he reported.
Outside the meeting, Don Rogers, of Southern Illinois Tire, Mount Vernon, Ill., told TIRE BUSINESS he agreed with the CGT chief.
Product differentiation appears to be one way CGT has quelled the Sam's controversy. Though at one point Mr. Frangenberg referred to the club as ``our largest customer,'' he later told TIRE BUSINESS that the tire maker's business with Sam's is in fact declining, and independent dealers no longer have to compete by selling the same products. Sam's carries specific CGT products, while dealers handle others, like the Continental AquaContact wet-weather tire.
``We haven't eliminated Sam's-we don't want to,'' he said to dealers. ``But we've alleviated the problems you discussed last year.''
Echoing what he said at its annual dealer meeting in San Diego in January, Mr. Frangenberg said CGT is becoming more decentralized, putting more regional representatives into the field.
After emerging from what the president called ``seven years of misery,'' he said the motivation level of the company's ``crew'' is now its ``biggest advantage.''
``I'm committed to giving even more authority to the decision makers up front,'' he continued, promising that levels of bureaucracy will be cut further in an effort to ``be closer to you, the customer, because if you're successful, we are successful.
``. . . You may not always like what you hear, but we'll be a stable partner.''
He went on to acknowledge the company hasn't always treated its dealers ``as businessmen, when you constantly had to call Akron to ask a question, or clear a decision for credit or a logistical problem. It takes time to get you the proper equipment. Our declared goal is to be competent partners, to train you more and provide you with the proper equipment to empower you.''
The company has increased and will continue to boost its original equipment market share, Mr. Frangenberg promised.
Chris Dickson, CGT vice president of sales, also talked about how much the company has improved the quality of its products, and repeatedly drove home the message that in order to compete stateside, the tire maker must continue to be a global player in the OE market.
Part of the reason the company added Continental to its name last year was ``to make it clear we are a world organization,'' he said, ``not just a U.S. tire manufacturer. I'm sorry if that offends people.''
The company's OE strategy is to concentrate on four core markets: Europe, the U.S., Japan and Korea. And its U.S. aim, he noted, is to be an across-the-board OE supplier, with a growing emphasis placed on the performance sector, something ``that hasn't historically been General Tire's strength.''
CGT's current emphasis is on the General brand-and Mr. Dickson doesn't foresee its demise in the near future. ``But if I'm arguing a world game, and I am,'' he said, ``then Conti is our brand.''
However, Mr. Frangenberg reassured dealers that although CGT wants Conti to have a greater presence in the U.S., it should be ``without cannibalizing General.''
If dealers were hoping the rampant proliferation of tire sizes might abate, they received no assurances from Jim Novak, CGT vice president of marketing.
The challenge, Mr. Novak said, is how dealers can draw more customers when selling tires with 520 UTQG ratings and advertisements that say, ``This may be the last tire you'll ever need.''
``We need more potholes,'' joked one dealer.
At least one of the dealers complained about ``a terrible number of back orders'' for Conti tires.
Mr. Frangenberg explained that Conti is ``sold out in Europe,'' and because of a ``tremendous shortage there, it's causing temporary shortages in the U.S.''
The answer, he said, is ``to manufacture the brand locally, so we're not dependent so much on European production,'' and steps are under way to accomplish that.