Why don't we have tariffs on Chinese truck tires? We have tariffs on Chinese-made passenger, light truck and earth mover tires.
I'm not debating whether the tariffs are right or wrong. I'm just asking why truck tires have avoided the tariffs so far?
No doubt the Chinese have captured a significant percentage of the market. Some say as much as 35-40 percent. The number is really impossible to track. Why? Simply because not all Chinese imported tires are reported to the Rubber Manufacturers Association.
Oddly enough, the major tire makers Group Michelin, Bridgestone Corp., Goodyear and Continental A.G. have wanted to kid themselves about the impact of the Chinese imports for years. I remember that not too terribly long ago the majors didn't even acknowledge the units they were losing by the tens of thousands in California's Central Valley. I call it the majors' arrogance.
It's driven much in part by corporate cowardice. But that's another rant for another day. Ag tire haulers were literally buying them by the container loads, at costs hundreds of dollars less than the majors. Frankly, it made sense.
We at East Bay Tire Co. take care of some very large ag fleets. The trailer tires stay on the trailers for seven years. The trailers only run, albeit hard, for four to five months a year, often in and out of tomato and carrot fields. They rot off before they ever wear out.
The used tires—roughly half treads—get sold in Mexico. So much for NAFTA (North American Free Trade Agreement).
No doubt, while this was going on, the General, Dunlop, Dayton and Kelly brands were all losing significant wheel positions. Yet, nobody sounds the alarm.
Now it is not unusual to see Chinese tires on some independent long haulers. And you certainly see them on all kinds of urban or regional operators. Southern California, in particular, is inundated with Chinese imports. Of course our state's Long Beach Harbor is ground zero for Chinese imports. The Chinese will buy distribution in North America. They already are in Europe.
Majors, wake up! Pull your collective heads out of the sand and get a plan before it is too late. Or is it already too late?
George Pehanick is CEO of Fairfield, Calif.-based wholesaler East Bay Tire Co. and outgoing president of the California Tire Dealers Association. He wrote this piece for that trade group's newsletter.