NEW HAVEN, Conn.-Pirelli Armstrong Tire Corp. (PATC) and Sears, Roebuck and Co. have come to a mutual agreement that will have PATC producing fewer private-label tires for Sears, according to spokesmen at both firms. PATC's recent decision to decrease production of private-label tires and Sears' efforts to streamline production are the reasons behind the move, they said.
``We want to work with our suppliers to meet their marketing objectives, and the two fit together very well,'' Sears said.
Sears and Western Auto Supply Co. (including Tire America and National Tire Warehouse), which is owned by Sears, recently conducted their first-ever combined source review, according to Rick Sawyer, tire buyer for Sears.
The in-depth study analyzed the manufacturing processes, output and balance sheets of 19 plants in four countries, Mr. Sawyer said, ``to see who is going to be our low-cost provider in the future that can handle our volume.''
Altogether, Sears and Western Auto sell about 24 million tires a year, he said, and plan to increase that number.
``We had to start synergizing our production to help develop vendors that could handle that kind of volume,'' Mr. Sawyer said. ``That's really what this is about.''
But increasing private-label production is not in PATC's plans, the Pirelli spokesman said.
Producing fewer private-label tires for Sears will give PATC ``desperately needed production capacity'' for its Pirelli and Armstrong brands, the spokesman said, noting that PATC has not been able to meet consumer demand for its flag brands.
``It's a healthy situation to be in, where people want more tires than you can make,'' he said. ``But we have to make them to take advantage of it.''
Since 1992, PATC has introduced no fewer than 22 different Pirelli and Armstrong tires, the spokesman said, and is expecting to launch new lines at the rate of about one every six months.
``That's a hell of an investment, and a major commitment to the market,'' he said.
PATC will quit manufacturing Guardsman Radial, Guardsman Response XL, Trail Handler AT and Trail Handler LT tires for Sears sometime during the fourth quarter, Mr. Sawyer said.
Cooper Tire & Rubber Co. will produce three replacement lines-the Guardsman 40 (for the Guardsman Radial), Super Guard 60 (Guardsman Response XL) and Trail Handler AT II (Trail Handler AT)-while Kelly-Springfield Tire Co. will make the Trail Handler LT II (Trail Handler LT).
PATC will continue manufacturing the Trail Handler APT and Guardsman Performance tires for Sears, Mr. Sawyer said.