CHICAGO-Achievor Tire L.P. is looking for a new lease on life. Forced to close its doors after losing the lease on its tire-remolding factory, the company has gone out of business, at least for a time-the victim not of a lack of sales or cash, but apparently a landlord eager to find another use for the property.
The abrupt nature in which Achievor's lease expired caught company President Andrew M. Bodner completely off guard, leaving him shocked and consequently scrambling to try to save a now-profitable business from becoming a footnote in the history of the tire industry.
The company's 70,000-sq.-ft. plant, a downtown Chicago fixture since 1981, is in an area that has been ``gentrified,'' he told TIRE BUSINESS, and the property appears to be more valuable to its landlord for uses other than manufacturing.
Achievor's lease had been short-term, ``but there was an understanding that there would be adequate notice before anything dramatic happened,'' he explained.
In June the dramatic occurred.
Company officers received notification the lease had lapsed, but were unable to negotiate an extension. The plant stopped production in early July, though orders will continue to be shipped from inventory as long as it lasts.
``This caught us quite unprepared and surprised,'' he said. ``We have quite a bit of raw materials and tires left.''
Although Mr. Bodner is evaluating the possibility of relocating Achievor, and is currently scouting other areas, he said the cost of moving the facility-approximately $1.5 million-is prohibitive. So, too, is the time frame. He estimates it would take six months to accomplish a move-
``and we don't have the luxury of time.
``We were proceeding on a longer-term program of relocating when the rug got pulled out from under us.''
He was unsure, and preferred to not comment on whether he and his limited partnership would resurrect Achievor. While discussions with the company's lender continue, Mr. Bodner was not optimistic, saying the bank has ``given us no room. They're forcing us to close down.
``And without the support of a bank, a business like this is dead.''
``I'm not trying to give the rosey picture that we're simply picking up and relocating,'' he said. ``It would be an uphill battle, difficult to restart the business.''
He did acknowledge that several companies are vying to purchase Achievor's equipment and assets and possibly restart it. And he insisted Achievor ``was a very viable business.''
``I think that we-the (50) employees of Achievor-have spent a lot of time creating something exciting out of what had been nothing. It would be disappointing to all of us if this was truly the end of Achievor.''
When the plant closed, some 45 production workers were let go.
Based on TIRE BUSINESS' annual survey of passenger/light truck tire retreaders, Achievor ranked consistently as North America's second-largest. At the time of shutdown, its plant cranked out about 1,000 bead-to-bead remanufactured tires daily that, to the average consumer, were hard to distinguish from new tires.
But recently, new tires were also part of the problem.
Though year-to-date the firm was making money, it has fought to grasp a niche as an alternative to a tire dealership's opening price-point new tire. However, recent binges of cutthroat price discounting have simply made it that much more difficult for Achievor to compete, Mr. Bodner said.
Nonetheless, when the limited partnership bought the remolded-tire-making division from Lakin General Corp. at the end of 1993, it was hoping the firm would live up to its new Achievor name. And it appeared to be doing that.
``We bought a business that was losing money,'' Mr. Bodner said, and was ``essentially defunct.'' The company had staked its existence on the old Sears, Roebuck and Co. ``big book'' catalog, accruing 80 percent of its sales from it. When Sears pulled the plug on the catalog in January 1993, the remolder teetered on the verge of bankruptcy.
Mr. Bodner said that ``the first year we owned it, we cut the losses from the previous owner in half,'' then in half again the second year. When it was shuttered, Achievor was riding a ``very significant positive trend.''
For a time, it looked like its old owner, Lakin General, might ride to the rescue and repurchase Achievor. Mr. Bodner said ``that had been expected, but we were not able to come to terms with them.'' He wouldn't say if Lakin is now completely out of the picture.
Part of Achievor's recent success was built on a burgeoning export business that was moving tires into Central and South America, developing Eastern European markets, and even selling Achievor remolds in Russia.
About five months ago the company gave exclusive rights to a new firm, U.S. Tire Export, to become Achievor's worldwide exporter. U.S. Tire was set up as an extension of Tire Factory Outlet (TFO), a 25-year-old retail/wholesale dealership in Atlanta headed by Wallace Boddy and his family, including son, Craig. TFO also sells Achievors.
U.S. Tire had already established a marketing plan, said President Craig Boddy, and put a sales team on the road to move product worldwide, ``so obviously (Achievor's closing) has been a real blow to us.''
The firm was in the process of creating a mixing warehouse, possibly in Savannah, Ga., to containerize Achievors with new and used tires ``in any way people wanted them-that's a somewhat unique marketing approach.''
The product, and its reception in international and domestic markets, ``is too darn good'' to just ``walk away from,'' he added, noting TFO's adjustment rate for Achievors was below that for new tires.
U.S. Tire has been selling about 1,000 Achievors a month, Mr. Boddy said, and three months ago had signed a deal to distribute them to the Far East.
He's confident ``someone will pick up Achievor,'' though the new entity might not be called that. ``It will roll again, and I hope to be a part of it, because it's just too good a product to let slide.''
Two significant Achievor customers left in the lurch by the closing are Metro 25 Tire and Big O Tires Inc. Both have outlets that offer Achievor remolds as opening price-points.
Duane Rao, Metro 25 chairman, estimated his company's stores in the Midwest, Southwest, and on the East Coast sell ``upwards of 150,000'' Achievors annually.
Still, he admitted that with the industry's current glut of new tires and price slashing in the last six months, selling a remanufactured tire next to a similarly priced new tire has been difficult.
``Prices have never been lower in my lifetime in the tire business than they are right now,'' he said.
``It's probably the worst time ever to be out there trying to build a reman' tire program.''
If Achievor is indeed no more, Mr. Rao said he's ``sorry to see it go. I like Andy Bodner and the Achievor people. They were entrepreneurs and good friends, in addition to being good business associates.
``They took a situation that was losing a ton of money and broke it even. It's a tough situation. They put a lot of sweat equity into the thing, and now they're out of it.''
Mr. Boddy, who's also TFO's operations manager, insisted there's a healthy market for Achievors. ``If you sell a reman' for 20-percent lower than the lowest-priced new tire, you've got the sale. That works both domestically and internationally.''
TFO makes margins of 30 to 50 percent on Achievors, ``and that's not too shabby,'' Mr. Boddy added.
Achievor had constantly added new sizes and tread designs, Mr. Bodner said, and was realizing ``encouraging'' sales from its light-truck line-``the big 15-inch tires.''
While one critic told TIRE BUSINESS that, despite its successes, Achievor lacked a solid marketing team or plan, Mr. Bodner disagreed. ``We successfully sold everything we made. Sales were not the problem. The company was doing reasonably well in a very competitive market.''
Mr. Bodner, who jokingly called himself ``an old 39 years old,'' especially in light of his current predicament, admits he's ``learned a lot about building a tire business. And now, if I have to, I'll learn how to take it apart.''
Achievor Tire has ``come an awfully long way. . . to have it end so unfairly, if it indeed ends,'' he said with resignation. ``It's tragic.''