Looking at it with 20/20 hindsight, Goodyear could hardly have chosen a more difficult time to embark on the creation of Wingfoot Commercial Tire Systems L.L.C., its nationwide commercial tire distribution subsidiary. Demand for truck tires in 2001 tanked, dragging prices down into the abyss as well.
Effecting the integration of three separate operating units with distinct corporate cultures-Goodyear Commercial Truck Tire Centers, Treadco Inc. and Brad Ragan Inc.-during such a down period, however, ``has made Wingfoot a much stronger organization for the future,'' said Bruce McClellan, president and chief operating officer since September.
Moving forward, Wingfoot embarked on a new business plan designed to generate ``favorable operating results,'' Mr. McClellan said, without offering specifics other than to say acquisitions and new stores are part of the growth strategy. The company will continue to make capital improvements in line with plans set up last year, he added.
Getting from Goodyear, Treadco and Brad Ragan to Wingfoot, though, meant making additions by subtraction as well as additions by acquisition.
In the past 12 months, Wingfoot has pared down the number of retread shops it operates by a net of 11, to 61, closing or selling various locations. Among those sold were plants in Clarksville, Ind., to Raben Tire Co. (see story, page 10), and Colonial Heights, Va., to Colony Tire Corp. of Edenton, N.C.
In the East, Wingfoot last July bought out Babek Commercial Tire Service, which operated five commercial outlets and a retread plant in New Jersey.
Since then, however, the company has closed four of the five outlets and suspended retread production at the Avenel location. Wingfoot said it exercised options to get out of leases at those locations ``based on the economics of this market.''
The remaining location, in Rahway, is Wingfoot's only outlet in New Jersey and the New York City metropolitan area.
The company was owned and operated by Bill and Antoinette Babek for more than 25 years. Mr. Babek was president of the American Retreaders' Association-predecessor of the International Tire & Rubber Association-from 1995-98. Neither Babek could be reached for comment on the sale.
Goodyear also boosted its presence in eastern Pennsylvania, buying Jack Williams Tire Co. Inc.'s commercial activities-outlets in Avoca, with a retread plant, and Wilkes-Barre-in September.
For Colony Tire, the deal broadens the company's territory into southern Virginia and expands its commercial business by about 10 percent, according to Charles Creighton, president.
Colony's distribution footprint now covers a triangle stretching from Edenton on the Atlantic Coast north to Colonial Heights and then southwest to Raleigh, N.C.
Colony Tire had an interest in the acquired stores for several years before closing the deal in February, Mr. Creighton said.
The Colonial Heights Next-Tred plant was completely renovated two years ago, he said, but has operated at less than capacity since then. In addition to the commercial store/retread plant in Colonial Heights, Colony acquired a commercial outlet in Ashland, Va.
``Our job now is to retain the business Wingfoot had there, and build on it,'' Mr. Creighton said.
The deal increases Colony's reach to 31 outlets-26 in North Carolina and five in Virginia-plus two retread shops, two warehouses and a separate parts business.
As for Wingfoot, the company recently consolidated six production facilities located in Texas and California into three facilities to improve efficiencies and manufacturing cost.
Wingfoot has consolidated 145 Goodyear/Brad Ragan and 58 Treadco outlets into 185 locations in 37 states, although it has pockets of strength in the South (22 sites in Texas and 14 in Arkansas), along the south Atlantic seaboard (32 stores from Maryland to Florida), throughout the Great Lakes states (39 stores from Pennsylvania to Minnesota), and California (16 stores).
By contrast, Wingfoot has only four outlets in New England, with none in New Hampshire, New York, Rhode Island or Vermont, according to company data.