AKRON (March 15, 2000)—For Bandag Inc., 1999 proved to be a disappointing year as it lost 49 franchisees and restructuring costs caused its net earnings to fall 11.8 percent to $52.3 million.
Despite those setbacks, some of the company´s large franchisees expressed optimism over Bandag´s launch of new equipment and sales training programs for 2000, which the company announced at its February dealer conference in San Francisco.
All franchisees interviewed by Tire Business felt this year´s dealer meeting was upbeat. Peter Gerry, president of Pete´s Tire Barn Inc. in Orange, Mass., said he thinks the industry will soon see Bandag marketing more of its programs to stay ahead of the competition—something it never had to do before as the retread market leader.
"Bandag needs to flex its muscles," Mr. Gerry said. "They haven´t really crowed about some of the things they do better to control their market share. Now they need to do that."
Mr. Gerry noted that Bandag´s remaining franchisees are growing and will continue to give the company a majority share in the retread market.
John Snider, president of Snider Tire Inc. in Greensboro, N.C., said he was impressed with Bandag´s new machinery—the Model 5400 OSM Tire Builder, the 7400 INSIGHT Casing Analyzer and the Model 6400 Extruder.
He said Bandag typically in the past has introduced an updated version of an existing machine or a new machine, but this is the first time in his memory that the company simultaneously released three brand-new pieces of equipment.
"I think they have a lot of positive things to show both from an equipment standpoint and also from a training standpoint," Mr. Snider said.
Ed Betz, vice president of Service Tire Truck Centers in Bethlehem, Pa., said his dealership is most interested in the Model 6400 Extruder, which he called "one of the best" pieces of the new equipment.
The extruder can save time and money because it puts cushion on a tread, eliminating the need to stock different widths of cushion, according to Mr. Betz. The machine also automatically fills in skives, which is currently done manually, he said.
Two retreaders—J.D. Chastain, president of Phoenix-based Redburn Tire Co., and Tom Schumacher, president of Chicago Bandag Inc., noted the equipment roll-out was probably a response to increased competition in the marketplace.
"I think it´s like any other industry. Unless your competitors force you to, you don´t pull anything off the shelf unless you have to," Mr. Schumacher said.
Michelin Retread Technologies Inc., which aggressively has signed several Bandag franchisees since 1997, is one competitor that offers shearography technology through its Casing Integrity Analyzer and an extruder that fills skives.
Redburn Tire may purchase Bandag´s casing analyzer, which uses shearography, but Mr. Chastain said the firm will wait and see if the machine will fit into the system at his shops.
"Bandag normally has excellent equipment out in the field and it´s just a matter if it´s cost-effective for the units you´re running per day," he said.
Bandag also is rolling out a sales training program at its headquarters in Muscatine, Iowa, called the College of Sales to train both novice and veteran salespeople in fleet account sales beginning this spring. Mr. Snider likes how the program begins training new employees at their dealerships before they arrive in Muscatine for further instruction.
"I think that it gives a new person that we would hire a good start toward being successful in sales," Mr. Snider said.
Tire industry salespeople now carry laptop computers containing vast amounts of technical information on retreads and their applications, according to Mr. Gerry.
In the past, salespeople would call in with technical questions but now have all that data at their fingertips, he said. A salesperson not only needs to know how to access those answers on their computer, but also must know how to give virtual tours of retread shops that customers can´t visit, he said.
"Everything´s getting more technical," Mr. Gerry said. "So, everybody´s doing more training."
Mr. Schumacher thinks Bandag´s training program "is on target" but the company needs to expedite it as quickly as possible. He said he likes Bandag´s decision to hold classes in Muscatine so that salespeople can share ideas.
Mr. Chastain said he would send some of his employees to the College of Sales and "see if it´s worth it" after they complete the training.
"Bandag´s had all sorts of different programs over the last three or four years, some good and some bad, and hopefully this will be one of the good ones," Mr. Chastain said. ©