AKRONTires are only going to get more dynamic, and government regulations aren't going anywhere.
That's the message delivered by James Hawk, chairman of Toyo Tire Holdings of Americas Inc., in his keynote address at the recent International Tire Exhibition & Conference (ITEC) for Tire Manufacturing in Akron.
The 40-year tire industry veteran, who oversees Toyo's only tire manufacturing operation in the U.S., located in White, Ga., said companies can stand out by showcasing reliability and safety. And to do that, tire manufacturers must invest in research and development.
We've seen so many competitors come into our market because it's the largest consumer market in the world, said Mr. Hawk, who was named the 2013 Rubber Industry Executive of the Year by Rubber & Plastics News, an Akron-based sister publication of Tire Business.
So what we need to do as on-shore U.S. manufacturers, he continued, is be able to sell the difference. Sell our technology and not give our consumers a reason to buy some of these less expensive imports.
Research focusing on technology and material science is very significant and ultimately is the key to success in the tire industry, Mr. Hawk told attendees of ITEC, held Sept. 9-11 in Akron. Today, material science is broken apart all the way down to the molecular and nano-technology level. With automotive original equipment manufacturers pushing new standards constantly, that research will only become more important, he said.
One example Mr. Hawk cited is fuel economy initiatives. Car companies have their agenda from the federal government that trickles down to tire manufacturers. That is true particularly for new hybrid vehicle models.
Mr. Hawk said rolling resistance standards are coming and already are implemented in Europe. The Rubber Manufacturers Association (RMA)of which Toyo is a memberis trying to get ahead of the impending standards by aligning itself with the European standards, thus avoiding a scenario where companies would have to do double testing.
Mr. Hawk is confident the U.S. government and the RMA will work out an effective set of standards, and that there is a fair chance the standards will be aligned with Europe's.
Rolling resistance is a major, major criteria now, and it's not just throwing silica or sand in the treads, Mr. Hawk said. It's element analysis, mold shapes and designs at the molecular level. That's a lot of good work that's going on in our industry, and it will pay off in better fuel mileage.
The last thing we want is for the U.S. to come up with a new standard, and now we're testing to a Euro standard and a U.S. standard. We're working to get some alignment with our federal government with the European standards so we only have to do it once. We know it's coming.
Mr. Hawk said the RMA has been an important voice in ensuring the industry is heard in Washington, D.C. He commended the National Highway Traffic Safety Administration (NHTSA) for its recent position on tire service life, saying there is not enough science and technology to predict aging of tires.
He expects the federal government to roll out tire labeling standards in the near future, but he is not worried about the delay because he would rather the organizations get them right.
Recently, there's been a very good connection between (the RMA) and the Tire Industry Association, which represents dealers and retailers, Mr. Hawk said. Finally we have a common agenda and have gotten on the same page, which is good for our industry, so there's no more confusion regarding service life, tire aging and things like that.
But it wasn't all praise for the government.
Mr. Hawk said it is one of the reasons the U.S. isn't improvingdespite a recovering economy, decreased unemployment, stronger car business and low interest ratesis the government's inability to pass a balanced budget.
I don't completely blame (President Barack Obama), but the whole scenario in Washington is deadlocked, he said. They only make decisions where there is a crisis or they have a deadline. You see and hear these things about the fiscal cliff, and that leaves a lot of doubt in people's minds.
It creates so much anxiety and doubt in consumers. I think the government being more disciplined, enforcing and passing balanced budgets could do a lot.
Business-wise I don't care who is in office. Let's just be effective and work together.
Fitments for a single tire product have increased dramatically. Mr. Hawk said the norm for the future will be products with between 60 to 80 different fitment styles. He cited a Toyo tire light truck pattern that includes 51 fitments.
Fitmentsat least the ones Toyo deals withcome in a variety of aggressive patterns, which Mr. Hawk said is a lifestyle choice driven by customer enthusiasm.
It's being driv-en by OE, Mr. Hawk said. Tires are part of the lifestyle that people want to have and demonstrate. The light truck market is huge in North America, and throughout the country you see so many fitments for light truck.
Toyo is meeting this demand with its proprietary process used to manufacture tires on a hands-free basis at its White plant. Mr. Hawk said these Advanced Tire Operation Modules (ATOM) produce tires at a highly repeatable rate.
The facility employs 1,100 and represents about a $500 million investment, but once its fourth phase is complete, Mr. Hawk estimates employment will reach between 1,400 and 1,600 and the total investment will be near $1 billion.
The tire maker's White facility operates 34 ATOM machines, which can produce seven to eight tires at a time and produces about 5 million a yearwith 50 percent focusing on light truck tires and about 25 percent consisting of sport-utility vehicle tires.
Mr. Hawk said Toyo's current production is the equivalent of 15 million passenger tires. Its latest expansion is projected to bring the total to about 40 machines and increase its output to about 9 million tires.
This story appeared in Rubber & Plastics News, an Akron-based sister publication of Tire Business.