LOS ANGELES—Nowadays, Chinese-made tires are rolling throughout the U.S. market, but when Greenball Corp. opened its doors 30 years ago in Los Angeles, such tires were a rarity.
The wholesale specialty tire distributor likes to think it played a significant role in boosting the influx of imported tires.
As Greenball celebrates its 30th anniversary, founder and owner Chris Tsai said there are different challenges for the wholesale import business today.
“Initially, our competitors were Goodyear, Carlisle and Armstrong. Cost-wise, we were much lower, but (the U.S. companies) were already set up in the market, so they had an advantage. For cost, we had an advantage over them,” he said.
Mr. Tsai said he believes he contributed to the changes in the specialty tire market in the U.S. When he started, U.S.-made specialty tires dominated the market but were more expensive due to higher labor costs. With the lower-cost Chinese tires it imported, Greenball easily competed on price, and eventually some of the major U.S. tire companies pulled out of the specialty tire market.
With the abundance now of Asian-made tires, competition in the U.S. market has gotten tougher, he acknowledged. “The majority of production is now from Asia, so we are competing with Asia plants.”
A native of Taiwan, Mr. Tsai originally worked for Cheng Shin Rubber Co., a Taiwanese tire manufacturer, and came to Los Angeles in 1975 to open a sales office to bolster Cheng Shin's specialty tire sales in the U.S. One year later he founded Greenball as a separate company and has been importing and selling specialty tires ever since.
A commonly asked question is how he came up with the company name. It was created out of necessity due to the language barrier. He related how as a Cheng Shin representative he had to visit numerous U.S. offices and leave messages with secretaries who often misspelled or misunderstood his name and the company name.
The problem came to a head one day after Mr. Tsai left a phone message with a customer's secretary. Mr. Tsai said about an hour later he got an angry call from the customer who thought Mr. Tsai was calling about his car which happened to be in a repair shop for transmission service. “What do you mean you're changing tires on my car?” the customer fumed.
Instead of “Chris calling about Cheng Shin Tires,” the secretary wrote the message as “Chris calling about changing tires.”
After that Mr. Tsai came up with a very simple—and easy to spell—name and logo.
For the next three decades, Greenball added other suppliers to expand its portfolio and developed its own private label tires that include such names such as Power Master, Tow Master, DuraKing, Dirt Tamer, Mud Buster and Mud Hog, to name a few. Mr. Tsai said the company has established recognition with those names, and the private brands represent a bulk of Greenball's sales.
In the 1990s Greenball began to source wheels from Asia to meet original equipment manufacturers' demands for tire/wheel assemblies. Thus, Greenball expanded into the “trailer manufacturing” field, such as cargo, horse and utility trailers. This in turn led the company to deal with large-sized tire manufacturers, adding larger sized tires for farm and OTR.
Trailer tires are its core business today, but the company also distributes golf cart, boat trailer, ATV, RV, lawn and garden, agricultural, skid-steer and other small tires. The larger-sized farm, OTR and industrial tire sales have continued to increase, he said. Its offerings include both radial and bias tires, and although the overall market for bias tires has decreased over the years, Mr. Tsai said Greenball's bias sales have remained steady.
He declined to release financial figures but said the company's sales have grown over the last two years, although profits have been negatively impacted by competition on market price.
Skyrocketing raw materials prices also have impacted the market, he said. “It's difficult to pass increased costs to the consumer. Manufacturers need to absorb some cost and importers have to absorb some costs.”
As for Greenball, he said the company “has made arrangements and worked out ways so the product cost is competitive.”
“In the next five years it will be interesting to see what importers will be around,” he added.
He predicted that over the next 10 to 15 years, “China will become the most important production base for tires.”
With several hundred tire factories in Asia producing varying degrees of quality, he said, “who you choose is important.” That is especially true in the U.S. market, he added, where tires are held to a higher standard.
“Whoever has the resource will be the winner. We spend time and effort to choose the best plant with the best cost and quality.”
Greenball describes its growth over the years as slow but steady. When the firm opened, it operated with three employees in a 2,300- sq.-ft. office and warehouse. Today, the Los Angeles headquarters is located in a 78,400-sq.-ft. location with seven satellite distribution centers around the country.
The company, which now employs 180, also distributes to Canada and Mexico, but it has no plans to expand its business—at least not for the next couple of years, Mr. Tsai said.
At age 60, Mr. Tsai admitted he and his wife, Jenny, work long hours in the business but “at the present time I have not thought about retiring. We'll continue to work for a long time.”