INDIANA, Pa.—It may only be a small part of its revenue, but in many ways Specialty Tires of America Inc.'s (STA) race tire division has helped keep the company competitive for more than half of its century of existence.
The Indiana-based specialty tire manufacturer, a subsidiary of Polymer Enterprises Inc., has been a mainstay in American tire manufacturing for 100 years, and in many ways the company has its deep roots in motorsports to thank for that.
Founded by Harry McCreary in 1915 as McCreary Tire & Rubber Co., the tire maker—like many that that launched during the height of World War I—set out to support an exploding automotive aftermarket.
It initially established itself as a premium brand in passenger, light truck and medium truck tires, but the firm soon expanded into other areas, including short-track racing.
Over the years, the company has endured its fair share of hardship, not the least of which took place during the U.S. recession and oil crisis of the 1980s, when McCreary Tire entered a period of insolvency. With the firm on the brink of bankruptcy in 1982, then-CEO Henry McCreary, grandson of the company's founder, promoted McCreary's corporate relations chief Don Mateer Jr. to president and charged him with restructuring the company.
Under Mr. Mateer's leadership, the company cut costs across the board, reducing payroll—including his own salary—and shedding segments of the business that had been losing money. He also phased out the firm's commercial truck tire business and put more emphasis on niche markets, focusing strongly on race tire lines.
Polymer Enterprises was established as the parent company for the firm's businesses in 1986, and in 1992 the McCreary name was discontinued in favor of Specialty Tires of America in an effort to reflect its product offerings better. In 1994, as part of the revitalization effort, the American Racer brand was introduced.
“You don't get to be 100 years old if you don't face some challenges over your history,” said Don Mateer III, Polymer Enterprises chairman and son of the late Don Mateer Jr.
According to Mr. Mateer, motorsports products have been a core part of STA's business for the last half a century. This division has been instrumental in the firm's success and will continue to be, he added, noting that STA is working toward dedicating its Indiana plant almost exclusively to motorsports products.
“Our business model as a niche specialty manufacturer and motorsports company clearly is a market that is a good fir for what our company's strategic business model is,” Mr. Mateer told Tire Business. “We can be responsive and nimble and flexible and put to use the skills, equipment, resources and people to serve that important market.
“And in terms of its strategic fit, we have a lot of work to do to grow our market share and grow our participation in (racing),” he continued. “To the extent that we're able to do that, it will serve a very important duel purpose of helping to not only fill the present capacity that we have but also to provide a dedicated motorsports manufacturing facility from this Indiana, Pa., plant.”
Mr. Mateer said the company's racing product line “came into our wheel house in the 1970s, and it really had to do with finding some things that our bias tire manufacturing technology and equipment and capabilities could handle. It was a good fit for some markets that we were not involved in that met the criteria of having certain value-added opportunities, certain better-than-average returns.”
The McCreary brand became a household name in the short-track racing world, in large part thanks to Joe Jacobs, who pioneered the firm's racing program, according to Scott Junod, director of STA's Race Tires America division. He credited Mr. Jacobs with being the “grandfather of the spec tire rule.”
Mr. Junod told Tire Business that Mr. Jacobs worked to encourage race promoters to adopt single tire rules in an effort to create parity within motorsports competitions. The acceptance of this rule contributed to the sport's growing popularity, he added.
Today, STA derives about 20 percent of its annual revenue from racing products. The firm makes American Racer tires for a variety of applications, including late model, modified, sprint, street stock car tires, both for dirt and asphalt racing, Mr. Junod said.
Most of the company's motorsports products are manufactured at STA's Indiana plant. The firm has a second plant in Unicoi, Tenn.
“From a capacity standpoint, we're in a very good spot to where we can grow our brand, and we have been growing over the last several years,” Mr. Junod said. “We will continue to do so at every opportunity.”
He noted that STA offers private-brand drag and street performance, go-karting, sand, tractor pulling and antique drag tires to various customers, but those products do not intersect with the American Racer offerings.
Mr. Mateer said STA is seeking to gain more penetration into asphalt competition going forward by focusing on adding programs with various sports car clubs around the U.S. Mr. Junod said the company also is in the process of developing its first American Racer brand radial tire.
“The cost of radial sport car racing tires has gotten prohibitive,” he said. “We fully intend to fill a niche and provide a quality product that is not only fast but allows someone to actually be able to afford to do it.”
He said STA has finished final endurance testing on the radial tire and expects to debut it during the 2015 Performance Racing Industry Show, taking place Dec. 10-12 at the Indiana Convention Center.
When Mr. Junod came on board with STA in 2013, the former sales account manager for Goodyear's short track racing program immediately saw one major benefit of working for a smaller, independent company—flexibility.
“The flexibility is so important in the racing industry, because it's changing,” he said. “The same tires that were being sold five years ago, because of the explosion of racing technology at the short track level, don't cut it. You've got to be flexible and you've got to continue to improve your products all the time.”
At the short-track level, much of the challenge for tire makers comes from a trickle-down of racing technology that became prominent in more mainstream racing, such as the use of bump stops and coil binding. Both setups are designed to stop a vehicle's suspension from traveling during a race, transferring the force into the tire to maximize grip on the pavement.
“Even though it was really designed for Super Speedway stuff, a lot of this technology has trickled down to your Saturday night racer,” Mr. Junod said. “A tire that was perfectly fine five, six years ago and virtually bullet proof is suddenly no longer that way.
“You call upon (the tire) to be your springs and your grip and steering component and all that stuff that a tire has to do, and then do it in very, very severe service type situations,” he added. “Even though the racers know that they're calling on the tire to do much, much more than they did five years ago, they still don't care. If something happens, it's the tire's fault.”
In addition to changing technology, Mr. Junod said the racing world is dealing with another problem—it's popularity seems to be shrinking, given the many other sources of diversion.
“I think it just has to do with the entertainment that people have at their finger tips,” he said. “Where 20 years ago going to the race track was one of the only things you could do on a Friday night or Saturday night, there's just so many other things and so many other niches of things that people can get involved in. I just think there's fewer gearheads around today than there were 20 years ago.”
Mr. Junod said he believes much of the change has to do with the cost to remain competitive in today's racing market.
“If you look at the old films, you had standard shocks you could buy off the shelf at your local auto parts store,” he said. “You took a car, busted the glass out of it, put a roll bar in and off you went.... So much of it today is purpose-built race cars, and if you're gonna be competitive you're gonna have to spend more money than you used to as a percentage of your disposable income.”
This is especially critical for manufacturers like STA that cater to the enthusiast market, according to Mr. Mateer.
“Most of our end-users are not Wall Street hedge fund managers,” he said. “They're 'Johnny,' who is a gearhead who has a certain interest in being out there a little bit and racing, and it's a good way to connect him in the Friday night and Saturday night specials they run all over the country.... These are people who are not benefitting from big sponsorships or having a lot of money behind them.”
In spite of these challenges, Mr. Junod said he believes there is hope for a turnaround as the economy picks up.
“At the promoter level, the people who have a good product are still strong and the ones that don't have a good product are gone, so there's a certain amount of renewal that will occur at some point in the future when the economy turns around,” Mr. Junod said.
“I think you're gonna see a lot of people that have been sitting on the sidelines because they can't afford to race. Those cars are still out there, those people still love to race, but maybe they can't afford it.”
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