Independent tire dealers have faced many challenges over the years to their reign as kings of tire retailing. While competition, government interference and relationships with tire makers continue to worry dealers, another huge challenge has emerged.
Finding good, honest, hard-working people to hire has become a huge issue for independent tire dealerships across North America.
Following are excerpts of what some dealers say are their toughest business challenges.
The biggest problem in our part of the country is personnel....We've faced it for years, but it's worse now than it's ever been. The people who are out there looking for jobs are basically unemployable.
You go to hire a guy to change tires, and he's got a record for drugs, he has no driver's license, he lies through his teeth. He's not a responsible human being. The responsible people are working and wanting to make a change.
We advertise in all the major papers, we try to go out recruiting a little bit and we go to our competitors and try to steal people, which is the only way I can really do it. It's not a good way to do business.
Dorchester Tire Service Inc.
Other industries have taken their toll on ours as far as taking people is concerned. I've lost salesmen and management to the automotive end of things.
(Employees) we've had for 15 years are here to stay; those who've have been here for three or four jump around.
A guy I'm paying $30,000 a year can go and make $50,000 (somewhere else), and of course I can't pay that because I don't have that return.
The tire manufacturers are pretty much telling us what we're going to make for profits because a percentage of what we do is national account/government business, and that's all locked-in pricing.
We're going after lesser industries and trying to take their people.
GVW Tire Inc.
South Bend, Ind.
Fundamentally, I think our biggest challenge is with people who come into the workforce today. The general work ethic isn't there.
We've got fewer people from a demographic standpoint. Then, with those you've got to choose from, the biggest challenge is finding young people who want to work.
I don't think they've been brought up correctly....It's not insurmountable. You've just got to go through more people to find those who want to work.
Community Wholesale Tire
St. Louis, Mo.
Finding people with good attitudes and wanting to help the customer is probably one of our major problems. I see businesses with help wanted signs all over the place and know that it's extremely difficult here in Maine.
It's a challenge to find the right people and pay them so that you can purchase new equipment and (pay for) more training for your people and still stay in business.
Part of the problem is the lack of proper schooling for the younger generation in their teens to early 30s. They haven't been trained that this is the real world, and you need to work and enjoy your work and have a good attitude with people.
Dick Cole Tire Center
The toughest challenge is personnel. There are fewer people right now to fill service positions. We have a large senior population that wants services and there are fewer people to perform them.
There are a lot of high-tech businesses that can pay more than what this industry traditionally has paid, so consequently, we're pretty low on the food chain as far as picking people. The school system doesn't recognize the potential for technicians. I've tried to do some creative things. It's been very depressing.
Atlantic Tire Wholesalers
Everybody's having the same trouble finding good employees, and once you get them, it's hard to retain them because people will rob them from you. I don't know the answer....
With the economy booming like it is, it's been difficult for us to get and retain good employees. There's always a better opportunity somewhere else.
We've got a lot of big industry around this area that pays janitors higher wages than we pay some of our skilled employees. It's difficult for us to compete that way.
Bonnie Moreland Jr.
Golden Star Tire Inc.
Tire work is not easy work, and it's hard to attract people who are willing to do that kind of manual labor. I've been in the business for 35 years, and it's been a problem for 35 years.
Chaney Tire Service Inc.
We're having trouble getting service techs. We're having problems with people who don't want to work in an area that's dirty and hot.
There are people who come into entry-level jobs now willing to do the work that needs to be done.
(Tire dealers) must be patient. Just work and do the best you can.
International Tire and Rubber Association
Our suppliers have to expand their distribution and continue to grow their market share.
Many times, it seems they do things shortsightedly and seem to have short-term goals in whom they bring on board as distributors.
They can't even supply existing distrubtion but often sign additional (outlets) that negatively affect those of us who have had lasting relationships with our suppliers. (Suppliers) don't take into consideration the effects this has on our relationships.
National accounts are another challenge. Certain contracts appear to be designed at the coprorate level without consideration for the independent dealer's profitability.
If national accounts continue to grow, how will we address the credits we receive? You get credits for your labor dollars; you don't get cash back.
795 Tire Service Inc.
We've adjusted our operations...because the profitability of the tire business is not what it should be. The reason is the manufacturers are always looking for one tenth of 1 percent growth.
I wouldn't be surprised if they didn't soon begin putting tires in Seven Eleven stores.
I've been in the wholesale end, the commercial end and the retail end. I think profitability in all facets of the business is getting less because the manufacturers are trying to find new ways to move products, and they're forgetting the tire dealers that have put them where they are.
Old Dominion Tire
I think the worst thing we have to deal with now is our suppliers. They supply to the mass merchandisers, like Sears and Sam's, and we can't get products because they're looking at the big-volume buyers rather than taking care of their dealers.
It's pretty discouraging for me whenever I go to Sears and they've got tires I've been trying to order for six months, and they're selling them for less than I can buy them from our supplier. I just don't think it's right.
Suppliers are turning their backs on their dealers, and it's going to come around one of these days and bite them in the rear end.
McKissack Tire Co. Inc.
Fort Stockton, Texas
The manufacturers have raised our buying price and taken the approach that we'll be able to pass that increase on to the customer. But the customer still has a lot of other avenues for buying tires.
The difference between us and the price clubs is that pricing is as far as it can go now....
Our retail pricing is stuck where it's at, which means our gross profit is going to deteriorate. The objective (tire makers) had was great. I mean, sure, we'd love to raise our prices and make a little bit more, but the manufacturers haven't been consistent with their pricing policy. They've left a lot of the price clubs with a lot of the same discounts.
Make it even for everyone. Put everyone on the same playing field.
Harper's Tire Ltd.
If you are a mid-sized independent tire dealership...the toughest business challenge at the moment is to determine which tire supplier to ally with to meet your business goals, while at the same time, meeting the tire company's agenda.
We are all concerned with offering the best service to our customers, providing the best price, growing our business and maintaining healthy bottom-line profits.
In the present tire industry, all these things have become more a function of which tire supplier you have chosen...than a tire dealer's ability to make independent decisions.
The truly ``independent'' tire dealer is becoming somewhat of an oxymoron. Tire dealers can no longer remain truly independent with many suppliers but must forge relationships with one or two main tire suppliers and follow their marketing strategy and programs in the industry.
Johnson Tire Centres Inc.
My only complaint with the tire business is loyalty among suppliers and customers. It's a lost word that's no longer found in their vocabularies.
Engle Tire Co.
The obstacle today that we face is the competitiveness of the marketplace. The dealer with many outlets has a significant buying advantage over smaller distributors. It makes it hard to make the gross margins that you need.
The manufacturer could control that (buying clout) by not making the spread so large.
There's no end in sight, unless the manufacturers do something to narrow the buying price. You can live with maybe a five or six point spread, but not 10 or 15 points.
Paul Williams Tire Co.
Change is the biggest challenge. Tires keep changing in size and in structure.
We now need the computer, e-mail, Internet, advertising and faxes. Change keeps coming at us faster and faster.
It is truly the information age, and we have to react to change now. We can't wait or we'll never catch up.
I think all of us want to sit down and say this is the way it is and let's stay that way from now and on. Of course, we can't because every day there's something new, something we have to redo.
Tire Association of North America
The toughest challenge for me has been my father passing away a year ago and the transition in business. We took out an insurance policy to look after the taxes because they have ruined businesses that haven't planned for them.
My father took over the business from his uncle in 1947 after World War II. He was in it for quite a few years. Mind you, in the last five to 10 years he just came in in the morning. But it was nice to bounce things off him and to know that he was there if you needed a second opinion on anything.
Frisby Tire Co. Ltd.
Our biggest challenge came in 1983 when my father passed away. Business was down and profits hard to come by. We came very close to closing our doors.
Part of our challenge was National Tire Warehouse and Tire America coming to our market. By creating a niche and increasing our service business, we have been able to overcome that challenge.
E.T. Paul Co. Inc.
The only problem I have is government intervention....The government doesn't understand that the consumer has to pay every time they impose another expense on us.
You're in a no-win situation with the government. The toughest challenge is trying to get the government off your back. They try to dictate your business. We've become the tax collector, and we have to employ people they say to employ.
Olin Mott Tire
Farm prices are very depressed. Equipment dealers are closing their doors and going out of business. The outlook is not very rosy. Inventories are really tough to control.
It's probably going to be one of the roughest years ever, and I've been in this business since 1964.
Financially, it's going to be a real drain on us before this year's over because inventories are so hard to keep under control, and the large farm stuff is just not moving.
The only time (farmers) are coming in to buy tires is when they really need a tire. Then they're buying one, or at the most they'll buy two.
Diehm's Tire Service Inc.
Getting tires during the Great Depression was nearly impossible. Most of the tires sold were salvaged from scrap piles with...repairs that today would be totally unacceptable.
Fred Harz Jr.
Fred Harz & Son
Surviving the Depression, followed by functioning during World War II through shortages and rationing was our toughest challenge.
Dave Stern Inc.
As a wholesaler, there has been, and continues to be, a constant challenge of achieving annual sales growth and maximizing profit potential in an industry faced with—fierce competition, overcapacity, mass consolidation, changes in distribution channels, extended tread life, vehicle leasing and many other complex business conditions.
Max Finkelstein Inc.
The influence of private brands in the 1970s and 1980s, and the mass marketers in the '90s with their unlimited advertising budgets. Loss leaders make up unit sales and control major brand units.
This contributes to the disappearance of family-owned and operated tire businesses.
Kress Tire Co. Inc.