In many respects, 2004 brought many issues to bear for the entire tire industry-some still pending or unresolved.
The short list: rapidly rising raw materials prices; the contentious presidential election; the siren song of the Chinese market's huge potential; the haggle over the Motor Vehicle Owners' Right to Repair Act; and a spate of destructive hurricanes. But the year also saw a number of accomplishments and challenges for individual businesses.
Here is a roundup of the year's biggest news:
* After years of red ink and questions about its future, Goodyear brought its overall business and struggling North American Tire (NAT) unit back into the black in the second quarter.
The Akron-based tire maker posted net income of $25.1 million in the second quarter, with NAT reporting segment operating income of $30.4 million. Progress continued in the third quarter with net income of $36.5 million and segment operating income in NAT of $13.5 million.
But company officials stress the turnaround isn't yet complete. The year's upswing was helped by the successful launch of the Assurance tire line in February. The Akron-based tire maker also hopes to reinvigorate its ailing Dunlop brand with three new tires that were launched in November at the Specialty Equipment Market Association (SEMA) trade show in Las Vegas.
* Yokohama Tire Corp. also returned to the black after three years awash in red ink.
With that accomplishment under its belt, the firm is targeting 50-percent sales growth by 2008, primarily on the strength of the performance tire business and an overall expanded product range. The subsidiary of Japan's Yokohama Rubber Co. Ltd. launched three product lines at the SEMA Show, including an all-season tire aimed at gaining distribution in the U.S. heartland.
* The architect of Bridgestone/Firestone's comeback from the Firestone tire recall of 2000 decided to retire.
John Lampe, a 30-year company veteran, said in January he wanted to spend more time with his family, though he would remain on the Bridgestone Americas Holding Inc. board of directors. ``I believe it is time for a change,'' he told employees at the time, ``and this is an instance of my head overruling my heart. While my heart is telling me that I can stay, my head is telling me it is time for a fresh set of eyes, a new perspective and increased energy levels.''
He passed the torch to Mark Emkes, who vowed to make the tire maker's North American unit profitable. For the first nine months of the year, Bridgestone Americas recorded operating income of $235 million on sales of $6.8 billion as passenger, light truck and medium truck tire sales in North America were strong in both the replacement and original equipment markets. For the same period, parent company Bridgestone Corp. reported net income of $724 million on sales of $15.8 billion. Also in 2004, BFS launched the Fuzion HRi, the second tire for the Fuzion tuner line.
* Openings and closings also marked 2004. Marangoni Tread North America Inc. celebrated in June the official opening of its $10 million plant in Madison, Tenn. The plant, which began production in April, is the first tread rubber plant in the U.S. for Marangoni.
Toyo Tire & Rubber Co. Ltd. broke ground in October on a $150 million passenger tire plant-the first new tire factory in the U.S. in a number of years-near Cartersville, Ga. Production is slated to begin by January 2006.
Continental Tire North America Inc., on the other hand, announced it will cease tire production at its Mayfield, Ky., plant by year-end. Conti said the 44-year-old facility carried high operating costs, and the tire maker had been reducing production levels since late 2003. It plans to use the facility for mixing and as a warehouse.
The Tire Industry Association closed and sold its Louisville, Ky., training center.
* One major player exited the automotive aftermarket repair business while a few others increased their efforts in the crowded tire-retailing arena.
Sears Canada Inc. left the business by divesting or closing all 49 of its auto repair centers. Tire dealerships Kal Tire, President Tire Canada and Active Green+Ross picked up most of the outlets. The move did not impact Sears Auto Centers in the U.S.
Meanwhile, in 2004 Precision Tune Auto Care (PTAC), Midas Inc., Monro Muffler Brake Inc. and Pep Boys-Manny, Moe & Jack upped their tire presence.
PTAC's franchise facilities launched a plan in January to offer tires. By May, about 50 of the firm's 340 U.S. stores had started participating.
By summer about 721 Midas outlets had started selling Bridgestone/Firestone tires under a program inked in 2003. The retailer had hoped to have 1,200 of its 1,900 franchise outlets signed on by the end of 2004.
Monro this year bought 36 Mr. Tire outlets plus five retail outlets from Donald B. Rice Tire Co. in Baltimore.
And Pep Boys began its roll-out of name brand tires in May. In addition to its private labels, the retailer now sells Continental, General, Goodyear, Michelin and Hankook.
* American Tire Distributors Inc. increased its reach by acquiring Big State Tire Supply of Lubbock, Texas, and Target Tire Co. of Jacksonville, N.C. ATD's network of warehouses increased to 80, including Target Tire's 11 warehouses that served about 1,800 customers in five states and portions of others. ATD also became a member distributor of American Car Care Centers Inc., taking over much of Target Tire's former region.
* The Tire Industry Association (TIA) plan for a checkoff program hit a major roadblock this year when the Rubber Manufacturers Association (RMA) withdrew its support for the measure, which would have allocated 50 cents from every new tire sold to fund consumer education and an industry and government training program. But TIA said it still has hopes for the proposal if the group can muster industry consensus. ``We want to move forward with this, but we aren't going at full speed,'' said Larry Morgan, TIA's outgoing president.
But at the SEMA Show, TIA and the RMA said they were joining forces to advance a common policy agenda for the industry. ``Hopefully, by combining forces we can do more for the betterment of our industry,'' said Dick Gust, TIA president.
* The Northeast Ohio Regional Tire Dealers Association dissolved its organization under the financial strain of a lawsuit. NORTDA was named as a third party in a lawsuit against a hypnotist hired for the association's 2001 Christmas party. Though the suit was later settled for about $1,000, NORTDA, which did not have liability insurance, had already disbanded.
* Cooper Tire & Rubber Co. agreed to sell its automotive business, Cooper-Standard Automotive, for $1.17 billion to a group formed by Cypress Group and Goldman Sachs Capital Partners.
While focusing efforts on its tire business, the company said it plans to invest some proceeds from the deal overseas, where executives envision making Cooper the largest tire maker in China in five years. The deal, however, was threatened by a lawsuit by the United Steelworkers of America (USWA), which charged that the union had a right to negotiate new agreements with the buyer before a sale of four unionized plants. But Cooper reached an agreement with the USWA in December that would allow the deal to move forward.
* Michelin North America Inc. settled a strike in August at its BFGoodrich plant in Kitchener, Ontario, and sealed a new contract for three BFG plants in the U.S.
The tire maker also pledged $150 million in new investments to upgrade capacities at the four facilities. The two-year deal in Canada ended the nearly three-month-old strike, and the U.S. master contract gave job security for union members and production cost cuts for Michelin.
Separately, Bridgestone/Firestone and the USWA returned to the bargaining table in December-the first time in more than a year. The union walked away from the talks in November 2003, claiming BFS's proposals didn't address important items from the contract reached with Goodyear. The union this November also broke off talks with Continental Tire North America Inc. over a severance package for workers who were laid off when production ended at Mayfield. Talks are continuing with Yokohama Tire Corp.
* Sears, Roebuck and Co. and Kmart Corp. shook the retail industry with the announcement they would join forces to create the country's third largest retailer, Sears Holdings Corp. The $11 billion deal will likely see many Kmart stores switch to the Sears nameplate, though details still are being worked out. The companies also are mum about what effect the move could have on Sears' Auto Centers or former Penske Auto Centers Inc. sites in Kmart locations.