JACKSONVILLE, Fla.—Michelin North America Inc. has purchased Jacksonville-based Stringer Tire Co. and is merging Stringer's commercial tire business in Florida and Georgia into the tire maker's Tire Centers Inc. network. Michelin has retained Stringer Tire CEO David Stringer—who began the dealership in 1989—as regional manager for the Stringer locations and TCI's four outlets in Florida.
The deal, which closed Jan. 4, came about, Mr. Stringer said, after he offered to buy the four Florida TCI outlets. He instead received a counter-offer from Michelin to buy his company, combine it with the TCI outlets in Florida, and let him run the new operation, which will have annual sales of about $42 million.
After Michelin purchased TCI in 1999, he said, the TCI stores started looking more like Stringer Tire's because they carried the same product lines and offered Michelin Retread Technologies Inc. (MRTI) retreads. So he approached Michelin about purchasing the TCI Florida locations.
But Michelin "turned the tables on me a little bit in October."
He said he signed a three-year contract with Michelin and will continue to run the operation "like my own company and continue to make money.
"I'm 55 and probably looking to retire in a few years. It seemed like a natural thing to do."
Now he has expansion on his mind.
"Since we are owned by Michelin, we might as well be the controlling entity in Florida for Michelin (commercial tire and retread) products," he said.
"Like Sherman's march to the sea, I'll march from Jacksonville to Miami and back to the sea again."
Stringer Tire has seven commercial tire locations—six in Florida and one in Georgia—and a retread plant in Jacksonville.
A Michelin spokeswoman said the Stringer locations will be renamed "Stringer/TCI" and the TCI locations will be renamed "TCI/Stringer."
"Because the two companies are merging," she said, "this allows each company to keep a piece of its identity in its own area."
Last June, Stringer Tire dropped its Bandag Inc. retreading franchise and switched to the MRTI system at about the same time Michelin's purchase of TCI was being finalized.
The ongoing battle between Michelin and Bandag for the retread market also was a factor, Mr. Stringer added. In 1999, several other major retreaders also switched from Bandag to MRTI.
Last September, Bandag filed suit against Michelin in U.S. District Court in Iowa charging the tire maker with illegal anti-competitive activities.
In November, Michelin counter-sued Bandag in the same court alleging the Muscatine, Iowa-based company's "monopolistic" practices tie dealers to long-term agreements that exclude them from offering competitors' retread products.
"I guess the battle kind of heated up the last few years between Bandag and Michelin," Mr. Stringer said, "and that kind of put dealers like me in the middle."
Asked if Michelin is embarking on a large-scale plan to purchase other dealerships, a company spokeswoman said, "No, not at all." Michelin purchased TCI, she said, because of "the strategic importance of retreading." However, the deal did create some overlap in certain markets between independent dealers like Stringer Tire and TCI.
The purchase of Stringer is "a logical way to resolve this market duplication," she continued, acknowledging that a similar scenario exists in "a few other markets." But she declined to divulge how many or where.