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January 07, 2019 01:00 AM

LETTER TO EDITOR: The wide-base super-single story no one is talking about

Joe Casebere
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    Why are retreaders getting squeezed with lower production and profit margins? The tire trade journals have been splashing the effects of cheap "Chinese" Tier 4 tires for many months as the primary cause of production and financial stress for retreaders.

    This is no doubt a major influence and major contributor to this decline. To quote recent media on other political national topics, "This is fake news."

    The major Tier 1, Tier 2 tire manufacturers also are contributing in this shrinkage with the advent of the wide-base super-single (WBSS) tires that have been heavily marketed for nearly 18 years now.

    They, too, are contributing to retread losses. The WBSS tires definitely have prove to be beneficial to many fleets running them, in appropriate applications, due to the revenue and fuel economy benefits.

    An argument of those fleet benefits is not the issue being discussed here. The result, however, for the retreader, is that this has contributed to a lack of production and revenue for them.

    So, Mr. Publisher, the flag brand Tier 1 and Tier 2 suppliers are contributing to retreads' demise, too. It is not just the cheap Tier 4 imported tires being dumped here that affects them.

    It is easy to get publications, associations and unions to rally behind initiatives and sound bites to impose duties or restrictions on the Tier 4 imports. The question should be, is this the only cause of the retreadable casing pool being marginalized? What impact does it have on my business?

    Four years ago the rejection rate of WBSS tires was running at 50 percent. My surveys of a dozen retreaders in 2017 that produce these tire sizes were gladly reporting that the RAR rate today is about 30-35 percent (combined average).

    That is a great improvement, but the wheel position numbers game still puts the retreader at a production and revenue disadvantage.

    Another observation is that it did not take 18 years for radials to out perform bias commercial truck tires in the 1970s'. Why can't the manufacturers do better with the WBSS life cycle?

    I'd like to see more in-depth reporting on how this super-single marketplace is really impacting the industry. It just isn't being reported correctly, and it is a major contributor to the stress being felt by the retread sector specifically. I know because I've been associated with retreaders for 48 years.

    A quick simple math spreadsheet tells a story about this converted segment. If a 100-unit fleet converted from low-profile 22.5 to 445/50R22.5, taking only into account the drive and trailer positions, both tire sizes being Tier 1 product, it is a surprise in numbers.

    I hope you let that sink in, that a 100-unit fleet can affect a retreader negatively by 2,300 retreads. So, why isn't this being discussed at every level of the industry?

    Many reasons are to blame and below is a list of first-hand comments from tire folks I've known for 35+ years.

    At 3 percent of the fleet market and replacement tire sales each year, it is not visible to the retreader.

    Fleets don't make a full conversion at one time. They use trade cycles to convert axle and wheel positions due to cost.

    Because most of this is controlled by Tier 1 and Tier 2 tire manufacturers, they target fleets for the buy-in, not the tire dealer.

    True ROI of WBSS users is not revealed, discussed or shared because the departments charged with detailed records are not transparent with each other, so fleet revenue vs. fuel purchases vs. maintenance/tires are not monitored accurately.

    Forty percent of the fleets that committed to WBSS are looking to get out, because it does not benefit their bottom line in revenue or fuel economy.

    One breakdown service call on the road can cost in excess of $2,000 national account pricing (one tire, one aluminum wheel) and wipe out the fuel savings for the entire lifecycle of the vehicle tires to wear-out.

    Who gave the WBSS manufacturers the green light to shorten the casing life cycle and reduce the number of retreads a casing will accept? That goes against everything the retread industry has stood for forever.

    Are the rubber companies training us to accept a throw-away commercial truck tire like they did 50 years ago with passenger tires?

    I just want the retread industry and tire publications to honestly report the second largest cause of the diminishing retread pool.

    The 2.45 million retread deficit reported by (TRIB's) David Stephens at the International Trade Commission this year is not completely the fault of the Tier 4, cheap, imported new truck tires. That is fake news.

    My estimates indicate that more than one-third of those 2.45 million losses were directly associated with WBSS.

    Folks, this is not hard math to see through. For every WBSS tire that goes into a retread plant, that is one tire short from before their existence.

    Look at their rejection rate, their one and only retread, and you begin to see the impact this 3 percent market share has on the casing pool.

    Joe Casebere

    Involved in retreading since 1970

    Eatonton, Ga.

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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