There was some positive news in the recent round of second-quarter financial reports for publicly held tire companies.
All of them-Goodyear, Cooper Tire & Rubber Co., Bandag Inc., TBC Corp., Myers Industries Inc. and Carlisle Companies Inc.-made money. Even Titan International Inc., which has had a particularly tough time of late, eked out a $383,000 profit vs. a loss of $3.98 million in the same quarter a year ago.
That's something to crow about in this volatile economic environment made even more tough by the likes of debaucles at Enron, Worldcom, Global Crossing and Adelphia.
It's not that everything is rosy in the land of tires. Cooper, while reporting record net income of $39 million in the period, had a 4.6-percent de-cline in sales from its tire operations.
Goodyear, which announced its first profitable quarter since last year's third period, also experienced an 8.8-percent reduction in North America tire unit volume in the quarter. This led to a 19.8-percent drop in operating earnings for the North American unit.
Some of this decline in unit volume can be attributed to the end of the Firestone tire recalls of the past two years, which skewed the numbers in the quarter-to-quarter comparison.
But more realistically, the reason the tire companies and the industry, in general, are doing better is because of reduced litigation costs, lower raw material pricing as well as tight cost controls and efforts to improve efficiency.
Goodyear's Sam Gibara and Cooper's Tom Dattilo acknowledged as much in comments they made in their firms' quarterly reports. As Mr. Gibara said: ``Cost reduction programs and rationalization activities are paying off.''
And the tire companies are leaving no stone unturned in their pursuits of leaner operations and beefier profits as evidenced by some recent moves involving distribution by two of the Big 3 tire makers, Michelin North America Inc. and Goodyear.
In a surprising effort to save costs and improve services to customers, Michelin decided to let an outside company handle its distribution in the U.S. and Canada.
Goodyear also recently expanded its logistics services agreements with an outside firm to refine its logistics strategies.
What all this means is that the large, publicly held tire companies are making progress in their efforts to remain viable and to be in good position to grow when the economy inevitably swings upward.
No, everything's not positive in the North American tire industry, and the future poses many challenges. But after some extremely tough times, it's nice to hear some upbeat news for a change.