NORTH WALES, Pa.-It's dangerous business, this prognostication stuff.
Lean a little too much to the conservative and you're called timid by your detractors. Drift toward being bullish and your critics say you've become reckless.
So it's a fine line Dan Wire treads as president and CEO of Treadways Corp., based in North Wales. He isn't shying away from a non-scientific guess at how the new year will shape up, mind you. Probably just being realistic when he predicts that overall, from the looks of recent months, the economy is going to run flat through the first half of 2002. There may be an opportunity for a ``very slight'' recovery in the second half, Mr. Wire told Tire Business, ``but I don't believe it will be a sharp recovery. That's going to take some time.
``We've hit bottom, but I believe we'll skid along the bottom for a while before we start turning back up.''
Few-economists or otherwise-would disagree with him that the ongoing slide was exacerbated by the Sept. 11 terrorist attacks aimed, in part, at the nation's already winded, sluggish economic engine. ``To me, for the most part, it's the fact that people are not traveling as much,'' he said. ``A recovery would have happened much sooner if not for Sept. 11.''
Still, there's a much bigger picture to worry about.
``I have concerns overall about the world economy,'' Mr. Wire added. ``We've talked for several years that it's not just a domestic, but a worldwide economy. And worldwide economies are somewhat stagnant, so our own recovery becomes more difficult.''
Taking that into account, Treadways is ``pretty upbeat'' and anticipates ``a very strong 2002'' in passenger and truck tire sales. The company had a solid year and gained market share-more than a point-in the truck tire segment, Mr. Wire claimed. Where did that come from? ``I wish I knew,'' he mused. ``Actually, I think it's a result of several years of working on building our dealer base. We've significantly expanded that.''
Treadways, a division of Sumitomo Rubber Industries Ltd., is one of the nation's bigger private label marketers, with brands including Centennial, Telstar, Laramie, Jetzon and Eldorado in its stable.
``With our tires, it sometimes takes a little while for people to understand the quality and value issue,'' Mr. Wire admitted. ``Because of the work we've done, I think dealers are now seeing it's an extremely high-quality product and they can make good money on it-that's a pretty good combination to have.''
He typified the company's progress as ``solid growth,'' and expects its passenger tire business also will grow this year. Overall, Mr. Wire anticipates an increase in businesss of between 10 and 12 percent, and perhaps a little more.
In the area of inventory, Treadways' is ``a little higher than I'd like to see us at this time of year for the economic conditions,'' he said. ``We went through some shortage problems through the middle of last year, but those are behind us. Our inventory and fill rates are now very acceptable.
``Like anyone else, we'd like to reduce inventory, but it's difficult to do so with the proliferation of SKU's, which makes it tougher and tougher to maintain 100-percent fill rates.''
Not that Treadways has hit that perfect mark. Mr. Wire said overall the company's fill rates last year were in the mid- to high- 80 percentile, though that varied by brand, with none lower than 80 percent. ``And in today's world, that's not too bad.''
Without being specific, he acknowledged that fill rates were lower ``not because of any problems with our manufacturers, but due to some things we did or did not do right. Currently, we're about at our historic numbers.''
As the economy drags its feet, Treadways has dealt with it by sticking to what has worked: ``We've always been a company that has tried to manage our assets, expenses and cash flow very tightly, so we're not doing anything any differently than in the past,'' he said.
While business in the first half of 2001 was down, the second half was ``quite good-with the exception of September,'' Mr. Wire said. The company saw a 6-percent increase in November, and for December marked a 12- to 13-percent increase over the previous year.
He attributed the uptick, in part, to a new 468,000-sq.-ft. distribution center Treadways opened last April in Southaven in northwest Mississippi, just a short distance from Memphis, Tenn. ``That allows us to utilize the synergies of having six different brands and being able to mix those brands on a single truck,'' he explained.
Although automotive repair and the tire business have been described as ``recession proof,'' Mr. Wire only partly subscribes to that theory. ``The good news is the bottoms are a little shallower for the tire industry, but the tops are not quite as high either. Fortunately-or unfortunately-there's a lot less volatility in the tire industry.''
Motorists indeed are driving less, keeping their vehicles longer and stringing out repairs, and fuel prices have not skyrocketed in the post-Sept. 11 U.S. But Mr. Wire said those factors have taken longer to have a beneficial effect on the economy and dealers' businesses.
In the last few weeks Treadways has continued to grow. It opened new Laramie distribution centers in Winchester, Va., and San Marcos, Texas, bringing the company's total number of U.S. warehouses for that brand to 15. The new sites cover local and regional markets covering a 150-mile radius.
The company also just signed a deal with Lansa Inc., a Lansdale, Pa.-based firm that will craft a business-to-business program for Treadways that Mr. Wire said will have ``some functionality'' by mid-2002. Among the program's features, it will allow dealers of all the company's brands to electronically place orders, access inventories and follow shipments.