FORT SMITH, Ark.-The age-old axiom ``no one wins in a fight'' isn't always true. Just ask Oliver Rubber Co., which likely will boost its tread rubber sales more than 25 percent because of moves made by Treadco Inc. in its fight with Bandag Inc., according to Treadco President John Meyers.
Muscatine, Iowa-based Bandag announced in August it wouldn't renew franchise contracts set to expire at eight Treadco retreading operations. Treadco, which reportedly viewed the move as spite for its new mold-cure retreading joint venture with Bridgestone/Firestone Inc., also lost three top officers to Bandag late last year.
In response, Treadco in September pledged to convert its 26 Bandag precure facilities to Oliver-certified operations.
Since the franchise agreements on only eight of these shops were set to expire in 1996, Treadco in mid-November asked the Sebastian County (Ark.) Chancery Court for permission to terminate all its franchise agreements without fulfilling a contract clause requiring it to sell back its retreading equipment to Bandag.
The court on Dec. 4 denied Treadco's request to retain the machinery it bought from Bandag the past 30 years. Mr. Meyers declined to say whether Treadco planned to appeal the court's ruling or to give an estimate on what it will cost to replace the equipment.
The largest independent truck tire retreader in the U.S., Treadco recently unveiled plans to complete the licensee conversion by October 1996.
Treadco converted its facilities in Little Rock, Pine Bluff and West Memphis, Ark., to Oliver-licensed operations in February. The Fort Smith, Ark.-based firm plans to begin using Oliver's retreading process at six other facilities by May. It plans to finish the conversion of its remaining franchises by the end of September.
Oliver, based in Athens, Ga., produces tread rubber, retread equipment and related items.
As a percentage of sales, Treadco's franchisee conversion won't hurt Bandag as much as it will help Oliver.
In 1994, Bandag recorded $650.6 million in revenue, while Oliver posted only about $124 million in sales. The additional Treadco business should add more than $30 million to Oliver's annual sales, Mr. Meyers said. And this doesn't include Treadco's likely future investment in Oliver machinery.
``We were Bandag's largest franchisee,'' he said. ``We're probably already Oliver's largest (franchisee) with only four conversions completed so far.''
Oliver officials are elated they landed the Treadco business, Donald R. Sheley Jr., chief financial officer for Oliver's parent company, Standard Products Co., said.