Skip to main content
Sister Publication Links
  • Rubber News
  • European Rubber Journal
Subscribe
  • Login
  • Register
  • Subscribe
  • Current Issue
  • Mid-Year Report
  • ADAS
  • News
    • OPINION
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • GOVERNMENT & LAW
    • Humanitarian Award
    • RETAIL TIRES
    • SERVICE ZONE
    • TIRE MAKERS
    • Best Places to Work
    • RUSSIA WAR IN UKRAINE
  • Data
    • DATA STORE
  • Custom
    • SPONSORED CONTENT
  • Resources
    • Events
    • DIRECTORY
    • CLASSIFIEDS
    • SHOP FLOOR
    • AWARDS
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
    • RUBBER NEWS EVENTS
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Best Places to Work
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
June 07, 1999 02:00 AM

SOME PASSENGER RETREADERS SUCCEED FOCUSING ON NICHES

Vera Fedchenko
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    AKRON—With the recent exit of five large North American retreaders from a declining passenger tire retreading business, conventional wisdom would say car tire retreading is dying. But conventional wisdom doesn't always dictate needs in specific markets, as a few successful passenger retreaders have found.

    In fact, while several already have given up on passenger tire retreading—most notably in the past year, Ray Carr Tires Inc., EcoTyre Technologies, Retread Manufacturing & Tire Sales, C&J Tire Service Inc., and White's Tire Service of Wilson—a few retreaders are surviving, even thriving, in that business—against all odds.

    Snow tires represent the majority of production at those companies surviving in the business, but forward-thinking firms also are looking at performance tires and other niche products.

    A new leader

    One such company is Eastern Tire Service Ltd. (ETS) in New Glasgow, Nova Scotia, which has become the largest passenger tire retreader in North America. The company operates a retread plant in New Glasgow that produces mold-cure passenger and light truck tires as well as Bandag precure commercial tires, and has three retail outlets in Nova Scotia.

    ETS, which posted sales of approximately $6.5 million ($10 million Canadian) in 1998, increased production of car retreads last year 25 percent to 625 units per day, up from 500 a day in 1997. It also retreaded an average of 110 medium-truck tire units per day in 1998.

    President Gerald Holmes said ETS' success lies in retreading snow tires, exporting all-season radial retreads and switching to a bead-to-bead ``remolding'' process.

    ``Our survival really is in the snow tires,'' Mr. Holmes said. ``We build snow tires year-round, and that's where my bread and butter is.''

    Snow tire retreads account for at least 60 percent of the company's sales, Mr. Holmes said. Most of those sales come from Canada, but some snow tire retreads are shipped to Iceland.

    ``We have competition with the new (snow) tire, but not as bad as the all-season tire,'' he said. ``Everyone's got a low-end new tire, but with the snow tires, a lot of them haven't got (low-end).''

    The key to ETS' success is attention to quality. All casings are inspected twice, before and after buffing, and repairs are limited to simple nail holes, Mr. Holmes said. Tires are remolded bead-to-bead using Orbitread strip-winding, permitting the company to brand the retreads with its own ETS mark. The plant operates 32 Italmatic VR-series presses.

    About 20 to 30 percent of ETS' sales are from exports, Mr. Holmes said, a business that keeps the company stable when snow tire sales wane during the summer. The company exports all-season passenger retreads to Puerto Rico and parts of the U.S. and Mexico.

    The firm soon hopes to ship approximately 7,500 to 8,000 tires to Cuba, Mr. Holmes said. ``Castro's got 40,000 cars, taxis and rental cars, and they can't make radial tires.''

    Sticking with a niche

    Like ETS, Anderson, S.C.-based Retreads Unlimited is staying in the passenger retreading business by meeting the needs of a small niche—that of high-performance tire retreads.

    Businesses that service the used car market and mail-order customers demand retreaded high-performance tires as a cheaper alternative to new tires, said Sidney McDowell, Retread Unlimited's president and CEO.

    ``When you've got a $350 tire vs. say, a $70 tire, it's a big money-saver for them,'' Mr. McDowell said.

    The company—formerly Tread Systems Inc. until Mr. McDowell and his partner, Mitch McDonald, purchased it a year ago—retreads 15-, 16- and 17-inch high-performance tires. The company retreads 230 passenger units per day, placing it third in North America behind ETS and Les Schwab Tire Centers Inc.

    Retreads Unlimited posted sales of $1.45 million in 1998. Of that amount, high-performance retreads made up 25 percent and all-season retreads, 20 percent, Mr. McDowell said.

    A majority of the company's business comes from retreading light and medium truck tires; it couldn't survive on passenger retreading alone.

    Mr. McDowell said the key to staying in the car retread business is keeping down the tire failure rate, which he said his company has managed to drop to 1.5 to 2 percent.

    Similarly, Mt. Morris Tire Service Inc. in Mount Morris, Pa., Gossco Retreading in St. Johnsbury, Vt., Techno-Pneu Inc. in Rimouski, Quebec, and A Major Tyre Co. Inc. in Bridgeport, Conn., have found that retreading passenger tires can be a profitable business by selling to the right market and, in some cases, relying on other business, such as truck tire retreading. Like ETS, all retread snow tires.

    Gossco sells an average of 20,000 passenger retreads annually, 16,000 of which are snow tires, said President Sally Goss. The company retreads 100 passenger units per day and sells them throughout Vermont, New Hampshire and upstate New York.

    Mt. Morris retreads 200 passenger tire units per day and 100 light truck tire units. Recent mild winters in Pennsylvania have curbed Mt. Morris' retreaded snow tire sales, but the company has found that maintaining good business relationships with small dealerships has helped it through lulls in snow tire sales, said President Jack Holbert.

    The firm prefers having a number of smaller customers who sell $5,000 in retreads per month, rather than having a few large dealers that sell $15,000 or more in retreads per month, because of those smaller customers' loyalty to his product, Mr. Holbert said.

    ``The big customers will kill you,'' he said. ``We've already been down that road. Probably 10 years ago we had about two or three big customers that took about 75 percent of our production.

    ``We have a little niche and we don't have any major ambitions to become multimillionaires and service the world.... All we want to do is make an honest living and turn out as good a product as we can.''

    Performance tire retreads are also on the agenda for Quebec's Techno Pneu, where production of 16- and 17-inch, low-profile tires should start next year, said owner Marcel Marquis. The Rimouski car and light truck tire retreading plant was opened in 1996, making it one of the newest plants in North America.

    Equipped with the latest-generation Matteuzzi building equipment and Cima presses, Techno Pneu retreads an average of 200 car and 100 light truck tires a day, six days a week, Mr. Marquis said, with the capacity to increase this by up to one-third with the addition of a few extra employees.

    ``We feel we've succeeded at this (passenger tire retreading) by making the best product,'' Mr. Marquis said. Techno Pneu won't use casings that have more than one nail-hole repair, and the tires are balanced before and after retreading.

    For performance tire retreads, standards will be even tighter, he said—no repairs, zero tolerances on balancing and only first-quality Goodyear or Michelin casings.

    About two-thirds of Techno Pneu's car tire retreads have winter treads, Mr. Marquis said, and about 90 percent of the company's business is in Canada.

    Mr. Marquis also operates a Goodyear process precure truck tire retreading plant nearby, where production is scheduled to reach 100 units a day this year.

    Winter tires are the heart and soul of A Major Tyre in Bridgeport. Formerly known as Major Custom Tire Co.—before the retirement of founder Tom Mihalov a couple of years ago—Major Tyre's specialty is snow tires using walnut-shell-modified tread compounds.

    The winter/summer dichotomy is reflected in the production schedule—1,500 tires a week from June to December, and 300 a week from January to June—said President Donna Pusker, Mr. Mihalov's daughter.

    Major Tyre's biggest customer is Tire Warehouse Central Inc., which operates 48 stores throughout New England. ``They still make the effort to sell retreads as an alternative to new tires,'' Ms. Pusker said. ``They take the time to inform customers about the differences and benefits.''

    Local post offices also are big customers, Ms. Pusker said, and hopefully will be an even larger customer in the future.

    A dying breed?

    If there is a formula for surviving in passenger tire retreading, it may include updating retread molds and presses to produce a quality retread that looks almost new.

    Eastern Tire Service's Mr. Holmes said he doubts he still would be in the passenger and light truck tire retreading business today if he had not invested in 32 new presses for his plant and new buffers. He said most American retreaders have dropped car tire retreading because of an unwillingness to buy new equipment.

    Mr. Holmes also credits a switch to the bead-to-bead process in 1994 with helping him stay in the passenger retreading business because the resulting retreads look more like new tires.

    Mr. Holbert of Mt. Morris also has bought new molds to handle new sizes, including 60-, 70-, 75-and 80-series, and recently has ordered new molds to retread some 65-series tires. He said most retreaders have tried to get by without new equipment and have failed.

    ``(A retreader) has tried to run the same equipment for 20 years, and it's impossible to do,'' Mr. Holbert said. ``If you don't keep investing and upgrading your stuff, the first thing you know is you get so far behind that it's too expensive to keep up, so you quit.''

    However, Ms. Goss thinks that passenger tire retreading has become a specialty business dependent as much on location as quality work.

    ``I think people like ourselves and Les Schwab, where they're in a mountainous terrain and a lot of snow, will survive,'' Ms. Goss said. ``It's a niche thing, and if you're in the right area, I think you'll survive. I don't see it lasting in the cities or in places where people can get by with a cheap, all-season new tire.''

    As long as passenger tire retreading remains profitable, Retreads Unlimited will remain in the business, Mr. McDowell said. However, he admits increases in new-tire prices would be a help.

    ``It's a fine line between profit and loss,'' he said. ``You have to watch every dollar and every penny you spend. It really depends on what the new-tire market does. If, in the new-tire market, the price stays down, the retreaders are going down the drain."

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    Most Popular
    1
    Discount Tire installs RoboTire at Arizona store
    2
    Average executive salaries found in Tire Talent report
    3
    Midas, Big O franchisee LWG poised for growth
    4
    Clif Armstrong joins TBC as commercial sales director
    5
    Conti rolls out new taglines for Conti, General brands
    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    Reader Services
    • Staff
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Mid-Year Report
    • ADAS
    • News
      • OPINION
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • GOVERNMENT & LAW
      • Humanitarian Award
      • RETAIL TIRES
      • SERVICE ZONE
      • TIRE MAKERS
      • Best Places to Work
      • RUSSIA WAR IN UKRAINE
    • Data
      • DATA STORE
    • Custom
      • SPONSORED CONTENT
    • Resources
      • Events
        • ASK THE EXPERT
        • LIVESTREAMS
        • WEBINARS
        • SEMA LIVESTREAMS
        • RUBBER NEWS EVENTS
      • DIRECTORY
      • CLASSIFIEDS
      • SHOP FLOOR
        • BALANCING
        • DEMOUNTING
        • SAFETY
        • TIRE REPAIR
        • TPMS
        • TRAINING
        • VEHICLE LIFTING
        • WHEEL TORQUE
      • AWARDS
        • Best Places to Work
    • ADVERTISE
    • DIGITAL EDITION