AKRON—Ford Motor Co.'s "Around the Wheel" program—which participating auto dealers say is working well—apparently is not having a significant effect on independent tire dealers across the U.S.
Around the Wheel is Ford's initiative to sell automotive aftermarket products and services, including replacement tires, through its dealerships.
Ford announced the program about two years ago and last year ran an advertising campaign promoting Ford dealers as "America's newest tire store."
Initially, the program and subsequent advertising initiative elicited some strong reactions from tire dealers.
Some viewed it as an opportunity to increase wholesale deliveries of premium tires to Ford and Lincoln-Mercury dealers, while others viewed Around the Wheel as a threat to their retail existence.
Ford said it sold 1 million tires in 1999 and will triple that number this year. Whether or not this is having an adverse effect on independent tire store sales depends on whom you ask. Two things seem clear, however.
First, tire dealers' concerns that Ford and Lincoln-Mercury dealers would use low tire prices to lure customers in for other, higher-priced services do not seem to be materializing. Instead, Ford's claim of a year ago that it did not intend to compete on price appears to be holding up.
Second, the impact on tire dealers from Around the Wheel, for better or for worse, is widely scattered.
Dee Manuselis, owner of Tallmadge Tire and Service near Akron, expressed concern about the potential for Ford dealers to drain off some of his replacement tire business.
He said larger tire stores that supply Ford and Lincoln-Mercury dealerships get a volume price break from manufacturers. This enables large tire dealers and Ford dealers to sell tires more cheaply at higher margins than he can.
However, calls to several Ford dealerships in northeast Ohio revealed that all but one sold the General G4S—the OE replacement tire for many Ford Tauruses—at a higher price than Tallmadge Tire and Service.
"As long as they keep the price structure fair, then it's anybody's game," Mr. Manuselis said.
Many tire dealers said the Around the Wheel program has not had a significant effect on their businesses.
Feeney/McIntyre Tire and Auto in Akron is a major wholesale supplier for Around the Wheel. Jim Myers, a sales agent for Feeney/McIntyre, said his firm can't tell whether it has lost any retail sales to area Ford dealers.
Mr. Myers also indicated little concern Ford would eventually bypass local tire dealers to purchase directly from manufacturers because of a strong relationship between Feeney/McIntyre and the auto dealers.
"There has been no negative effect on us because we supply Ford dealers in the Denver area," said Travis Roffler, brand manager for tires at Great American Tire and Auto Service Centers in Denver, a Michelin Alliance dealership.
Michelin North America Inc. requires Ford dealers to buy Michelin tires from suppliers such as Great American, Mr. Roffler said, rather than directly from Michelin.
If that were to change, it would be of concern, he said, but he does not view such a possibility as likely.
Like Mr. Myers, Mr. Roffler believes strong relationships and service will keep auto dealers buying tires from local providers.
Paul Lemiux, owner of John's and Sons Tire Service in Manchester, N.H., said competitive pricing and personal service have kept his retail business strong, but his wholesale business has suffered because of the Around the Wheel program.
"We've lost about a quarter of our wholesale business," he said, "because we are not able to get the number of tires we need from our distributors."
In Charleston, W. Va., Bill Kepple, owner of Marty's Tire Store, said car dealers there charge high retail prices for tires sold through their service departments and that Around the Wheel has not affected either his retail or dealer sales.
"The local Firestone outlets service the parts departments of the Ford dealers here," Mr. Kepple said."I also sell to dealers, but only to their used-car departments. They can't pay the prices their parts departments charge for tires."
So does Mr. Kepple see a future for the Around the Wheel program? Apparently not.
"They are not advertising it or pushing it here," he said. "And now that they are in the middle of their first big problems (the Firestone recall), the car dealers probably wish they were not in it."
Kevin Frye, service director for Town and Country Ford in Charlotte, N.C., did not express that sentiment. However, the recall has "caused a great burden on us," he said, because of the difficulty of obtaining replacement tires in the P235/75R15 size. Through August, his dealership had replaced more than 400 recalled tires.
Tommie Hawley, service director of Central Ford in Houston, said the program gives him the leverage to be price competitive on tires. As a result, his dealership is equipping vehicles that might have gone elsewhere for tires and related service.
Aside from the shortage of tires covered by the recall, Around the Wheel is "absolutely working well," he said.
Feeney/McIntyre's Mr. Myers said neither he nor the Ford dealers are having problems meeting non-recall tire needs. He admits, however, that the recall has caused a change in his work routine.
"Normally I am on the road every day visiting the Ford dealers in the area," he said, "but lately I have been on the phone 100 percent of the time. I am trying to help Ford dealers stay focused and maintain business as usual."