With the truck tire market changing rapidly, Bridgestone/Firestone (BFS) executives promised commercial dealers recently they will continue to make necessary changes to ensure adequate tire supply.
``We've taken steps to ensure we can support you because our success will always depend on your success,'' Kurt Danielson, BFS' director of marketing-truck and bus tires, told dealers April 28 at the tire maker's Bizcon 9 commercial dealer meeting in New Orleans.
Describing the current state of the market as a ``perfect storm,'' Mr. Danielson said demand has outpaced supply in both the original equipment (OE) and replacement tire sectors. The result is that BFS has changed some of its practices by limiting its OE business and shifting inventory to the replacement market, he said.
``No longer will we accept tire orders simply because our competitors are unable to fulfill their contracts,'' Mr. Danielson said. ``We have taken a very strategic approach to distributing our products at the OE level.''
He noted that another big initiative BFS began last year and is continuing is ending ``bad business'' or gray market activity-and he sent a strong warning to dealers regarding engaging in gray market transactions.
``At the last Bizcon, we told you we would enforce a zero tolerance policy on gray market tires,'' Mr. Danielson said. ``We have done that. You may have heard of all the legal action we've taken against violators. We canceled fleets; we canceled dealers. We've even fired employees.... There's nothing worse for us than supplying tires to people who think nothing of cheating us.''
Art Campagnoni, director of North American commercial sales-truck and bus tires, said BFS has placed responsibility and accountability to stop gray market sales on the shoulders of its district managers and regional managers. The Nashville, Tenn.-based tire maker also has gone after gray market offenders aggressively, he said, by sending warning letters to all of its dealers and identifying the offenders.
``We've named names, a practice some might consider risky,'' Mr. Campagnoni said. ``But we do that so there's no misunderstanding who some of the offenders are.''
Neither he nor Mr. Danielson named offenders at Bizcon, but one dealership in particular BFS terminated as an authorized dealer and then sued in 2004 for alleged failure to pay federal excise taxes on Bridgestone- and Firestone-brand tires was Hempstead Tire Service Inc. in West Hempstead, N.Y.
BFS and Hempstead Tire later settled in November for undisclosed terms.
Mr. Campagnoni promised dealers that BFS would continue to crack down in 2005 on cross-border tire shipments between the U.S. and Canada.
Other changes BFS has made in response to the truck tire market include simplifying its pricing policy to eliminate monthly specials and offering dealers help with human resources functions. (See ``Behavior evaluation'' story below.)
Mr. Danielson also addressed the issue of ``super singles'' or wide-base truck tires, saying he believed there is confusion in the industry over BFS' position on the product line.
``What we've shared with you is what our competitors are learning the hard way.... We said then just as we say now that super singles are not for everyone,'' Mr. Danielson said, adding that BFS is aware of a number of fleets that have tried wide-base singles but went back to duals.
BFS in late 2004 launched its Greatec wide-base radial truck tire line, which previously had been available only in Japan. The company has called super singles a niche item, and Mr. Danielson had some strong words for competitors that say super singles will be more than that in the replacement market.
``Our competitors' approach to super singles has been to throw it all against the whole market and see what sticks without regard to real world applications or real servicing issues,'' he said.