AKRON (April 9, 2007) — Now it looks like Bandag Inc. is passing from the scene—at least the scene of independent tire industry companies based in North America.
Bridgestone Americas Holding (BAH) Inc.'s pending purchase of the retreading franchisor is a momentous event in the retreading business. Bandag is the largest retread system supplier in North America, holding a 45-percent market share. That's big, although eroded from the days before Michelin North America Inc. became a force in the field. And then Good¬year always has been, and remains, a big player in retreading.
Continuing a trend that started in the 1980s, Bandag's change to being a foreign-owned company—like the former Firestone Tire & Rubber Co. and General Tire before it—leaves just Goodyear, Cooper Tire & Rubber Co. and Titan International Inc. as major U.S.-based tire industry companies.
I always liked Bandag because of its independent streak. I'm sure that characteristic originated from the family-owned nature of the business, which was founded by Roy Carver after he acquired the North American rights to a German-developed retreading system. It also was nice that a company in little old Muscatine, Iowa, could become a major force in the rubber industry.
Longer ago than I would care to admit I went to a Bandag dealer meeting in Acapulco, Mexico. It followed the script of the meetings the big tire manufacturers put on for their dealers—high-end resort, lots of entertainment, make the customers happy.
Bandag demonstrated it ran with the Goodyear/Firestone/General Tire/Michelin/B.F. Goodrich crowd, even if it wasn't quite up to their sales.
Talking to Bandag dealers back then, they seemed pretty loyal to the company. In later years…well, a number have switched to Michelin's retreading system and tread rubber materials.
Who knows, maybe that was the impetus to “anti-competitive practices” Michelin claimed Bandag and Bridgestone/Firestone were engaging in against the company when Michelin sued them back in 2002. They settled out of court, so that's a buried secret.
Since then Bandag has spent a lot of money on development and worked hard to maintain profitability in a difficult business climate. Last June Bandag did what was best for Bandag when it announced it planned to reduce its work force by 15 percent and changed its generous pension plan for its staff, a move to save the company money.
So Bandag, a publicly held company still controlled by the Carver family, has become more like most of its peers in the tire sector, and the Carvers are cashing out. The growth of the tire industry oligarchy continues.
Mr. Noga is editor of Rubber & Plastics News, a sister publication of Tire Business.