AKRON—Times are tough for U.S. inner tube manufacturers. As demand for inner tubes continues to decrease and imports proliferate, competitors find themselves vying for a share of an ever-shrinking market.
With Pirelli Tire North America Inc.'s exit from the inner tube manufacturing ranks earlier this year, only three U.S. tube makers remain: Cooper Tire & Rubber Co., based in Findlay, Ohio; Bridgestone/Firestone Inc., with headquarters in Nashville, Tenn.; and Cupples Rubber Co. in St. Louis.
Pirelli Tire bowed out of the business April 1, prompting John Pecoraro, Cooper manager of product marketing and inner tube sales, to say, ``When you have four guys adrift on a raft and one of them dies, you eat him and you all live a little longer.''
The industry has been forced into niche markets—tubes for agricultural, bicycle and other specialty tires.
But even large agricultural radials are going tubeless, prompting the market to fall between 20 and 40 percent this year, said Chuck Ramsey, president of BFS' Tube Division.
Inner tube shipments have decreased on average 5.1 percent annually since 1994.
Last year alone, the number of units shipped dropped 11.5 percent, due in part to increased imports of small-size tubes from Asia, Mr. Ramsey said.
Imports climbed 3.2 percent in 1998 over 1997 figures. Through July 1999, tube imports surged 7.1 percent, compared with the first seven months of 1998, according to data from the Rubber Manufacturers Association.
While tubes are coming into the U.S., not as many are going out of the country. Rising imports have been met with falling exports.
From 1997 to 1998, U.S. tube exports fell 13.9 percent. In the first five months of 1999, inner tube exports plummeted 21 percent, compared with the same period in 1998.
Cooper is taking advantage of the shrinking market to stay alive.
``As more companies exit, we're picking up the slack,'' Mr. Pecoraro said.
Prior to Pirelli's departure, Robbins Inc. got out of the tube business 4 1/2 years ago.
Cooper has converted its Piedras Negras, Mexico, plant to an engineered products manufacturing site from inner tube production in response to the decreasing market. But the company intends to stay in the business for the long term.
``We've invested too much in our Clarksdale (Miss.) factory. Domestic sales are still strong and profitable,'' Mr. Pecoraro said. ``We're not going to be one of the (companies) to fall off.''
But BFS is less optimistic.
``Certainly, I don't see inner tubes coming back in vogue,'' Mr. Ramsey said. ``As time goes on and the downward trend continues, we still have too much capacity.''
Cooper has manufactured inner tubes since 1956 at its 176,495-sq.-ft. plant in Clarksdale. That facility produced its 175 millionth inner tube earlier this year.
BFS produces 4.6 million units per year and operates a 300,000-sq.-ft. inner tube plant in Russelville, Ark.
In 1996, a rash of layoffs began at the Russelville factory. The plant went from its top employment of 400 to the current 270, said Charles Lewis, president of United Steelworkers of America Local 884.
As a result of a company contract, there is no longer seniority, vacation now is calculated by hours and it is rumored that the plant may shift to a permanent 36-hour workweek, Mr. Lewis said.
Unlike Cooper, Pirelli's departure has had a negligible impact on BFS from a volume point of view, Mr. Ramsey said.
But BFS shares Cooper's view that the inner tube business is survival of the fittest.
Cupples declined all comment on the state of the market.