NAPLES, Fla. (Feb. 19, 2004) — Michelin Americas Small Tires (MAST) plans to integrate its Alliance dealer marketing groups in Canada, Mexico and the U.S. into a single North American entity as part of an ongoing effort that began last year to re-energize and grow the dealer program.
Company executives made the announcement at the Michelin Alliance Customer Meeting today in Naples. The move will bring together about 550 dealerships representing nearly 2,000 locations, said Herb Johnson, general business director for the Alliance programs. He expects the larger clout of the combined group will enable MAST to negotiate better deals with suppliers as it establishes more value-added programs for Alliance participants. He gave no timetable for when the integration would take place.
In the U.S., the Alliance program has 208 participating dealers, with another 168 in Canada and 180 in Mexico. When joining the program Alliance dealers sign a three-year agreement and commit to buying at least 51 percent of their tires from Michelin.
Mr. Johnson said while one of the goals is to expand the Alliance program in the U.S., the first priority is to maintain the current number of participants and help them grow their businesses. In adding new Alliance dealers, the company also is more interested in quality points of sale rather than quantity, he added.
At the Naples meeting, which was for U.S. Alliance dealers only, the Michelin executives stressed repeatedly the importance of the Alliance program to its overall distribution efforts, noting Michelin has no company-owned stores of its own in the U.S.
“You, our Alliance dealers, are critical to our strategy,” said Jean-Michel Guillon, executive vice president of Michelin North America Inc. and COO of MAST.
Mr. Guillon also promised dealers improved fill rates beginning in 2004, noting “we can't be a premium partner with substandard fill rates.”
While he wouldn't provide specifics about the company's order fill percentage, he said Michelin needs to achieve sustained fill rates above 90 percent. “This will be my commitment to you, and we will deliver sooner than later,” he said.
Dealers attending the meeting also learned about several new Alliance initiatives for 2004.
Among them, the company will introduce a training plan called the Alliance Certification Program, which will provide dealers “with everything they need to know to sell and service a tire,” Mr. Johnson said. The company also will begin an Alliance tire advertising test program in four markets later this year.
In addition, the company has established an Alliance Customer Council, consisting of nine dealers each elected to three-year terms.
Members of the council are:
Bob Beasley, vice president of Beasley Tire Service, Houston; Paul Bernstein, vice president of Delta World Tire Co., New Orleans; Jeff Buettner, vice president of Tire Distributors Inc., Winchester, Va.; Ron Burt, co-owner of Burt Brothers' Tires, Bountiful, Utah; Janine Calabro, business manager, Calabro Tire & Service, Pittsburgh; Ed Hogan, president of Hogan Tire Co. Inc., Woburn, Mass.; Jerry Nerheim, president of Waukegan Tire & Supply, Waukegan, Ill.; Ara Tchaghlassian, president of ATV Inc., Irwindale, Calif.; and Jim Whaley, president of Jim Whaley's Tires, Dothan, Ala.
“The new council is designed to facilitate development of best practices on planning, marketing, pricing, training, service and product development,” Mr. Johnson said.