NASHVILLE, Tenn.—Bridgestone/Firestone Inc. is not sitting idle as the trucking and commercial tire industries evolve. The tire maker said it's aware of the increasing number of merging fleets, service demands fleets place on dealers, fill rate needs—and aware of the growing retreading presence of Michelin North America.
As a result, BFS has been adjusting with the times. In March, the Nashville-based firm formed a new business unit, Bridgestone/Firestone Truck Tire Sales Co. (BFTT), to handle all of BFS' commercial business, and named as president Mike Fujimura, a newly elected member of Bridgestone Corp.'s board.
Rick Skinner, BFTT director of commercial tire marketing and general manager of the tire maker's Oncor retreading operations, spoke with Tire Business about the company's commercial and retread strategies and operations. Some comments were edited for brevity.
Tire Business—In 1998, Newport Communications conducted a fleet survey for BFS. What did the survey find?
Rick Skinner—That's something we do continually in regard to benchmarking the desires of our customers and what they find valuable in tire and retread products.
The concerns that came up (in the survey) were: longer original tread wear, dealer support, casing durability, retreadability and warranty.
TB—What is BFS doing to respond to those fleet needs?
RS—I think we have an organization that addresses the different sizes of fleets out there. We have regional fleet managers who concentrate on corporate-to-corporate relationships with the major fleets in our country.
We have partnership fleets where we help design maintenance programs that are all about involving our independent servicing dealer network, the fleet and ourselves in developing a maintenance program that yields total lower cost over the life cycle of the tires.
That's really what our fleet strategy is: How we help place our product and design the complete program that's going to lower cost over the life of the tire's use.
We do that with programs like ``National Preferred,'' offering our dealers and smaller fleets the ability to get consistent pricing and easy service over the road through our dealer network.
TB—How is BFS combating the fill rate problem?
RS—Our LaVergne (Tenn.) plant has grown dramatically in its capacity through productivity improvements. We continue to expand our Warren County (Tenn.) plant.
We're also bringing in a greater number of truck tires from Japan and have also increased other sources worldwide, including from Brazil and Venezuela.
TB—You recently lost a big customer in Tire Centers Inc. to Michelin. How is this impacting your business?
RS—We're very disappointed that we can no longer do business with TCI. Certainly, it's had an impact on us. But we just didn't feel that it was in our best interest long-term to sell tires to our competitors.
We are working very hard to make up any lost business, to protect our Bridgestone end-user customers and make sure they get the premium service they need, and we have to address that on a geographic-by-geographic area.
In some places, TCI serviced end user accounts of ours that required different levels of service than they do in other areas, for example, mount and wheel programs, tire management programs that certain end users require that other end users do not request.
In a geographic area where that was being provided, we have worked with other dealers to get them to service that business in that manner for us....TCI's trade style, area by area, was different, so our need to make up that business, area by area, is different.
TB—How does selling BFS brands through truck stops fit in with the company's overall operation and strategy? Do you think this practice may alienate some of your dealers?
RS—From a new-tire distribution strategy, it provides convenient, excellent service for our end-user customers at truck stops. It's another outlet to obtain premium service on BFS products.
Truck stops in our marketing agreement do not go off-site to solicit customers. Our dealers, on the other hand, do an excellent job of servicing a geographic area. We do business with outstanding, regionally dominant, nationally dominant independent dealers who service a geographic area.
TB—With Goodyear as the No. 1 retreader in North America and Michelin becoming No. 4, what is BFS' retreading strategy?
RS—We're a new-tire manufacturer, and we're very pleased that we have good relationships with Bandag Inc. and Oliver Rubber Co. With both those precure manufacturers, we feel their franchisees do an excellent job retreading our casings, and we're very pleased with those relationships.
We continue to watch the (retreading) situation very closely, but we're not totally confident our entry into retreading would add to the industry because it's very unstable now. Currently, you have many people considering different retread options. We feel that the current precure manufacturers do a very solid job.
TB—Are you comfortable enough with Bandag to cut a deal and buy Tire Distribution Systems Inc.?
RS—I can't comment on that. That would be contrary to expansion of company-owned distribution. Our focus is really how to grow our end-user base through servicing our independent end users.
Goodyear has a retread presence, Michelin has a retread presence and everybody is looking at why the third member of what is considered the Big 3 doesn't have a retread presence. The answer is, we are very comfortable with the relationships we have with Bandag and Oliver today.
TB—Will BFS expand through GCR Truck Tire Centers?
RS—Our strategy is to work with and support our independent dealers. At this time, there are no plans to aggressively increase our company-owned distribution.
TB—The Oncor facility in St. Louis is running at full capacity at 4,000 retreads per month. Will capacity be added?
RS—We will continue to improve our process there and evaluate and test new machinery, but we're not going to (physically) expand the plant.
TB—BFS has been offering many new software packages to dealers and commercial customers, particularly through its Web site, www.trucktires.com. How has this been helping your business?
RS—We think that more and more of our customers will be using the Internet and electronic-type information. Anything we can do to offer more value and less paper...is obviously an advantage to our end users, to our dealers and ourselves. All of our (information technology) initiatives are aimed at simplifying processes, improving communication and particularly, the speed and quality of information.