P.G.T. Retreading Inc.'s president, John Morrone Sr., has been California dreamin', but dreaming's about all it will be-at least for the foreseeable future.
That's a long way from Philly, where the company hails from. But P.G.T., which is mostly into intermodal tire retreading, was looking at making that huge move across the country. Besides its two plants in Kittanning, Pa., the firm wanted to add a facility in the Golden State.
``We had an account that wanted us to go to the West Coast,'' Mr. Morrone told Tire Business. ``They wanted us to deliver merchandise out there, and trucking-to get it there from where we are-was just ridiculous. So we were looking to expand out there.
``But it's a very difficult place to go to. At this point it doesn't look like things will work out. Maybe sometime down the road.''
P.G.T.'s original plan was to set up a retread shop for what he would only describe as a ``large customer,'' then build upon that relationship as well as add to the company's customer base. It even scouted locations in Southern California and elsewhere in the state.
The factors Mr. Morrone faced are probably typical of what any firm interested in expansion must consider: The labor market-in California ``it looks pretty bad'' right now, he acknowledged-and the costs to do business. ``Everything on the West Coast is a lot more expensive than where we are. And we've looked into the (financial) numbers, which didn't help us, either.''
The company never even got as far as considering environmental concerns and regulations. ``I'm sure there would be those issues, too. There are always environmental concerns when you're in retreading-always somebody looking at something,'' he said.
If things turn around economically, P.G.T. might give another look to California, he said. Right now, it'll stay at its East Coast base.
Meanwhile, business has been ``very spotty'' for various reasons, Mr. Morrone reported. ``I guess it's the overall downturn in the economy. We have excellent months and then bad months.''
The company operates Oliver system precure and Hawkinson mold cure plants that turn out about 325 mostly intermodal retreads daily. From a tread rubber consumption standpoint, it has seen a slight uptick, using 2.2 million pounds in 2001 and a little more than 2.3 million pounds last year.
In business 30 years, the firm began doing intermodal retreading in 1991. It had a couple of accounts go by the wayside in 2002 but picked up a few new ones, so the year was pretty much a wash. Mr. Morrone said the intermodal business has been ``flat to falling'' the past few years because ``there's a lot of new tires out there. A lot of our business this year is in new tires.
``New-tire pricing is close to recap prices. So the industry trend is (a customer) buys new tires, then caps their own casings-at least that's where it's going in the bias side of the business.''
In addition to its two retread plants, P.G.T. has six commercial truck centers in Pennsylvania and a retail/commercial outlet in Knox, Pa. Some of the stores operate under the P.G.T. (Pittsburgh General Tire) Good Tire banner, a partnership to which Mr. Morrone has belonged to for about 15 years.
The company has about 40 trucks, including off-road service vehicles. ``We're pretty big in the OTR business,'' he said.
Denton Good is president of Good Tire and is secretary/treasurer of P.G.T., which ranks 35th in Tire Business' annual listing of North America's largest medium truck tire retreaders.