AKRON-For the past 10 years, since its acquisition by Japan's Sumitomo Rubber Industries Ltd., Dunlop Tire Corp. has been laboring under a cloud. But indications are that aggressive efforts to cut costs may be edging the Buffalo, N.Y.-based tire maker into the sunshine.
Dewitt ``Woody'' Arnold, vice president of marketing, told journalists on hand in Akron July 2 for the unveiling of a new Dunlop advertising campaign that, after a decade awash in red ink, the company finally is making money. At least it is thus far this year.
The new campaign-playing off the message ``Handle It!'' (see TIRE BUSINESS' July 8 issue )-has the blessing of parent Sumitomo, which Mr. Arnold said has poured $300 million into the operation since purchasing Dunlop in December 1986, and has patiently waited for results to show up on the ledger book's bottom line.
``We've not been a good investment,'' Mr. Arnold acknowledged. ``We've lost money consistently over the last 10 years.''
But as of July, Dunlop is in the black, he reported. And as the company embarks on its campaign, bankrolled by a $3 million ad budget that is triple last year's, he said Sumitomo has assured the company ``we have no resource limitations-we can do whatever we can justify.''
Mr. Arnold told TIRE BUSINESS that as much as Dunlop would like one, a new tire plant is ``not in our five-year plan. Our first priority is obviously to make money.''
But capacity within the industrty is currently so high that ``right now we're just like everybody else-trying to do more with less, make more tires with the same number of people.''
The ``Handle It'' message captures the feeling of the product, he said. And it reflects a new attitude among Dunlop's 3,300 employees in the firm's two tire plants-in Buffalo and Huntsville, Ala.-and Buffalo corporate offices.
The company's products have ``never been better. Quality is at its highest level,'' he said. Order fill rates are high, Dunlop prices are competitive, tire adjustments are minimal, and ``our dealers and customers have never liked us better than they do today.''
Much of that rosy scenario is owed to what Mr. Arnold called Dunlop's ``four cornerstones,'' which ultimately show up in product price and customer service:
Relentless cost control, with an aggressive goal throughout the company to reduce costs by 25 percent over three years. It is a moving, ``ongoing target,'' he said;
Market-driven mentality, relating every decision to customer needs; and
Rapid new-product development-``we've got to get our new products to market faster.''
Toward that objective, Dunlop debuted in June its least expensive passenger tire, the Axiom II, a 75-series white sidewall, with 70-series sizes due in September.
This month (July) the company introduced its Grandtrek original-equipment-level light-truck tire for about a half-dozen applications, to be expanded eventually to include some 16 sizes for a complete replacement lineup.
It is ``essential for any tire company to sell the same OE tire also as a replacement line,'' Mr. Arnold said, but it's not good to have models in a line for more than 5 years before replacing/updating them.
``We're not there yet, but that day is coming. Our goal is to take months off the product development cycle.''
Mention the Internet and Mr. Arnold becomes animated.
Dunlop launched its site on the World Wide Web in January and completed it in March. It currently averages more than 300,000 ``hits'' per month but, more importantly he said, every day the company receives about 10 to 15 e-mail messages from consumers viewing the site. Those are answered within 24 hours of being received.
Most inquiries concern fitment and applications of Dunlop tires, dealer-locator requests, specific product information and even some actual tire orders.
The use of computers, and e-mail, has allowed the transfer of information within Dunlop to occur at breakneck speed. That really excites Mr. Arnold, yet he admitted that when he recently asked workers at the Huntsville plant how many had logged onto the Internet, few had or cared to.
As for the 'Net or home pages holding much appeal among Dunlop dealers, he said he's found scant interest, partially because dealers have little time to dabble with computers.
That doesn't mean Dunlop will curtail its efforts, though.
``Raising consciousness about and inspiring consumers to buy the Dunlop brand'' is the chief reason behind home pages and ad campaigns, he said. But ``if it doesn't bring in more sales and profits, it's not a good investment.''