KANSAS CITY, Mo.—Cross-Midwest Tire, the nation's eighth-largest commercial tire dealership, is growing by leaps and bounds, but management is taking care to make sure it's controlled growth. "We're not really concerned by how big we get," said Greg Trum, chief financial officer. "We do have some growth forecasted, but we're more interested in growing at a pace that ensures we can take care of our customers.
"We don't ever want to get so big that we can't handle the business we have as well as we do now."
In 1999, Cross-Midwest Tire opened two new commercial tire outlets, purchased two existing ones and increased capacity at its retread shops in an effort to grow its business.
As a result, the dealership's 1999 sales surged 31 percent from 1998 to $80 million, and its retread units per day rose by 200 to 650. The Kansas City-based firm is projecting sales growth of about 30 percent in 2000.
"We recognize that there are significant opportunities in the markets in which we're currently doing business," Mr. Trum said.
Late last year, Cross-Midwest purchased Como Tire Supply, a commercial dealership with stores in Columbia and Jefferson City, Mo., to solidify its presence in the state. The Columbia outlet, in particular, is located strategically along heavily trafficked I-70, Mr. Trum said.
Without the Como Tire acquisition, Mr. Trum estimated that Cross-Midwest would have grown 15 percent.
The company also opened stores in Grand Island and Norfolk, Neb., as well as a Bandag Inc. franchised retread shop in St. Louis, bringing its total number of commercial sites to 16, with four Bandag retread plants.
Mr. Trum acknowledged that Cross-Midwest is planning to open more stores this year but declined to discuss how many or where.
The company also is moving its headquarters and retread plant in Kansas City into a larger complex as part of its plans to increase retread production by 30 percent, Mr. Trum said. That relocation should be completed in early April.
Eighty-five percent of Cross-Midwest's business is commercial tire sales and service, with retreading accounting for the rest. The dealership employs 350, all of whom Mr. Trum credits as the "finest in the industry" and one reason for the firm's growth.
Cross-Midwest offers Bridgestone, Firestone, Michelin, BFGoodrich, Continental and General brands and is aligned with Bandag's Tire Management Solutions fleet-servicing program.
Although retread prices overall are declining, Mr. Trum said his company stays ahead of the competition by selling a program to fleets, and not just a price. He said Cross-Midwest not only sells new tires and retreads, but also includes other services to help lower a fleet operator's cost per mile, such as wheel alignments and recommending tire pressure and tread design.
"We're very competitive in our pricing, but it's one of those things where we don't focus on an individual price of any one product or service," he said. "We focus on the overall package."