Dealers confused about FET issue
WASHINGTON-The changes in computing truck tire federal excise taxes go into effect Jan. 1, but the Internal Revenue Service (IRS) still hasn't given tire dealers and manufacturers any guidance on how to comply with the law, according to tire industry spokesmen.
``We're getting five or six calls a day on this,'' said Roy E. Littlefield III, executive vice president of the Tire Industry Association (TIA).
One problem is that tire dealers probably will have to differentiate between tires received before and after Jan. 1 for purposes of computing the tax, and their computer systems are not set up to monitor their inventories that way, Mr. Littlefield said. TIA also is concerned that the 11th-hour provision to tax super single tires at half the rate of conventional radials could hurt the rule's revenue neutrality and lead to new taxation methods that are less favorable to tire dealers and retreaders.
The Rubber Manufacturers Association (RMA) has asked for interpretation on inventory and other FET-related issues but has yet to hear back from the IRS, according to John Falardeau, RMA director of government affairs.
``The FET simplification was part of a much larger bill, and this issue isn't exactly on the IRS's front burner,'' he said. ``To put it mildly, they're swamped.'' But he added that there is little to fear from the IRS at this point: ``They won't be going out to dealers and distributors before the interpretation is out.''
The FET formula is as follows: 9.45 cents for each 10 pounds of load capacity above 3,500 pounds; for bias-ply and super-single tires, the tax is halved to 4.725 cents.
Tread shipments grew 2.3% in '04
WASHINGTON-Shipments of tread rubber this year are expected to be 2.3 percent ahead of last year's levels, according to the Rubber Manufacturers Association (RMA).
The 2004 shipments equate to about 16.7 million retreaded tires in the U.S., the RMA said.
Steady economic growth should fuel a continued increase in tread rubber demand, the RMA said, with growth expected to continue through 2007 at an annual rate of 1.9 percent.
Bridgestone plans automated rollout
TOKYO-Bridgestone Corp. will spend $237 million over two to two-and-a-half years to install its ``BIRD'' automated tire manufacturing system at its Hikone, Japan, tire plant, where production of car tires using the system should reach 12,000 units daily by early 2007.
Bridgestone's decision comes after a nearly two-year-long test production run demonstrated the system's ``mass production worthiness'' at a prototype unit at the firm's Tokyo plant, the company said.
Bridgestone said the BIRD-Bridgestone Innovative & Rational Development-process automates the entire sequence of tire manufacturing from processing raw materials to inspecting finished tires. Previously the firm said the system cuts energy consumption by 40 percent and floor space up to one-third while doubling productivity and improving tire uniformity and balance. It also handles small production lots efficiently.
Bridgestone said it plans to deploy BIRD initially in Japan to meet growing demand for high-performance and larger diameter passenger tires.
Associated sells tread rubber biz
TALLAPOOSA, Ga.-Associated Rubber Co. has sold certain assets related to its tread rubber business to Industrias de hule Galgo of Mexico.
The deal includes Associated's precure press and ancillary processing equipment in Calhoun, Ga. Associated Rubber still owns the plant in Calhoun and continues other operations there, but the sale included some equipment and tooling that had been at the plant, a spokesman said.
Associated Rubber said it will continue all other operations excluding tread rubber sales.
The deal's terms were not disclosed.
Galgo said it would move the purchased equipment to its production facility near Mexico City, where the firm produces Pre-Q treads and other tread-related products. Galgo's U.S. distribution company is Pre-Q Rubber Ltd., which operates from a 60,000-sq.-ft. distribution center in Dallas.
Galgo said Associated Rubber had been the initial U.S. distributor for Pre-Q treads from 1989 to 1998. Pre-Q Rubber began direct distribution about six years ago.
TBC hires chief marketing officer
PALM BEACH GARDENS, Fla.-TBC Corp. has hired Erik Olsen as senior vice president and chief marketing officer, a newly created position.
In the post, Mr. Olsen, 41, will be responsible for the development of the company's proprietary brands with an immediate focus on the retail segment brands, including Big O, Tire Kingdom, Merchant's and NTB, TBC said. He will report directly to Larry Day, president and CEO.
Mr. Olsen previously served as vice president of sales for Michelin North America Inc.'s North America Passenger and Light Truck Division.
Pirelli opens Ga. warehouse
ROME, Ga.-Pirelli Tire North America Inc. (PTNA) and its logistics partner Kuehne + Nagel International have opened a distribution center in an industrial park southeast of Atlanta to service customers throughout the eastern U.S.
The warehouse, in McDonough, Ga., is situated to serve not only Pirelli's factory in nearby Rome, but also to receive more than 2,000 containers of tires annually from Pirelli factories in Europe and South America shipped through the port of Savannah, Ga., Pirelli said. McDonough is about 20 miles southeast of Atlanta along Interstate 75.
The 247,000-sq.-ft. facility is designed to house more than $35 million worth of inventory, Pirelli said.
Cooper extends date for sale
FINDLAY, Ohio-Cooper Tire & Rubber Co. and the investment firms buying Cooper's Cooper-Standard Automotive business have agreed to extend the closing into 2005 and to adjust the transaction price by up to $30 million pending a post-closing accounting of the working capital.
The original final date for closing the deal was Dec. 15. This was extended to Jan. 31 by Cooper and Cypress Group L.L.C. and Goldman Sachs Capital Partners, Cooper said in a filing with the Securities and Exchange Commission. Nonetheless, Cooper said it expected the deal to be completed before year-end, subject to the buyers' receiving financing and other customary conditions.
Regarding the agreed-upon purchase price of $1.17 billion, Cooper agreed to let the buyers withhold $30 million until a working capital adjustment is finalized following the closing. At that point the final sale price will be set.
Conti's Ky. plant ends production
MAYFIELD, Ky.-Continental Tire North America Inc. has indefinitely suspended tire production at its Mayfield plant.
Mixing and warehousing operations will continue for the foreseeable future, the tire maker said. Continental had announced in June that it would suspend tire production by year-end.
With the suspension, about 650 hourly and 80 salaried employees will be laid off. Conti said the layoffs are effective Dec. 31 so the employees will be paid through the holidays. Hourly employees are eligible for severance under collective bargaining agreements with the United Steelworkers of America.
The union broke off talks in November over a severance package, but Conti said it is willing to discuss the package.
Hankook opens fifth warehouse
WAYNE, N.J.-Hankook Tire America Corp. celebrated the opening of its new tire distribution center Dec. 13 in Portland, Tenn.
The 312,000-sq.-ft. center-expandable to 450,000 square feet, Hankook said-is the firm's fifth warehouse in the U.S. It also operates two centers in California and one each in New Jersey and Oregon.
Bill Bainbridge, marketing director for Hankook, said the Tennessee warehouse will use enhanced software to rapidly identify inventory and expedite shipping plus increasing accuracy. ``In short, this is a major step forward in servicing our dealer network immediately and into the future,'' he said.