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Published on October 9, 2000

Dealers key to Wingfoot success

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Goodyear should tread lightly in putting together its new joint venture with Treadco Inc. to avoid harming its existing commercial dealer base.

While the opportunities of that venture are great, Goodyear must develop a plan that will not put it directly into competition with its dealers.

That would only serve to undermine the strong partnership with commercial dealers the company has developed over many years.

Goodyear and Treadco announced in September a plan to combine their commercial tire distribution and retreading assets into a joint-venture company known as Wingfoot Commercial Tire Systems L.L.C.

That organization will operate 194 commercial tire centers and 77 retread plants throughout the U.S.

The new company, with estimated annual sales of about $650 million, will rank as the world's largest commercial tire service network, the two firms believe.

The greatest concern among dealers is not Wingfoot Commercial Tire's size or scope. Those are assets in today's service-minded market, where many large trucking fleets are looking for a single supplier to serve their tire needs nationally.

Rather, it's the possibility that Goodyear dealers in some markets will end up competing directly with their primary tire supplier. That could very well drive down prices, weakening both dealers and the newly combined company.

Goodyear dealers also have legitimate issues about the possible loss of expansion opportunities in markets where Treadco now operates. It's conceivable the joint venture could eliminate opportunities in some markets that dealers previously had targeted for expansion.

The U.S. is the world's largest commercial tire market, and the Wingfoot venture should have plenty of opportunity to gain new business. But a well-thought-out strategic plan that puts dealers first offers the best chance of succeeding and bringing in added business.

In developing that plan, Goodyear should not forget that independent commercial dealers are its most effective channel of distribution.

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