Tire makers watching impacts of UAW strike

AKRON — As the United Auto Workers' (UAW) strike against the Big 3 domestic car makers drones along into its fourth week, industry pundits are starting to turn their attention to the inevitable domino effect on the industry's suppliers. 

A recent survey by the Motor & Equipment Manufacturers Association (MEMA) — which represents more than 1,000 companies in the U.S. — of its original equipment supplier members revealed that close to 30% of them had to lay off some direct labor employees, and more than 60% expect to start layoffs by mid-October.

The MEMA membership does not include tire makers, which up to the start of the strike had been benefiiting thus far in 2023 from rising OE demand on growing new car sales.

"A defining characteristic of the automotive market so far in 2023 has been recovering new vehicle production leading to increasing new-vehicle inventories, growth in new-vehicle sales, improving affordability through modest price declines — or at least not increases — and more sales incentives," Jonathan Smoke, Cox Automotive Inc. senior economist, wrote Sept. 29.

"In other words, in many ways, we've seen a shift to more normal trends in most parts of the auto market."

And while OE tire demand was up —  the USTMA's mid-year forecast projected OE shipments of 43.9 million passenger tires, or 5.6% ahead of the 2022 total —  replacement market shipments are projected to fall 3.6% short of the 2022 total. Part of the shipment decline is blamed on wholesalers' building down inventories bloated by overordering during the recent supply-chain crisis.

As for tire companies that supply the domestic vehicle makers with tires, it should be noted that "Detroit 3"  -- General Motors Co., Ford Motor Co. and Stellantics N.V. (Chrysler/Jeep) --- hold a combined 40% share of the North American car/SUV/LT market, according to Automotive News estimates, down significantly from the 68% they controlled in 1999. 

So, who potentially could be impacted?

Tire Business data indicate that Michelin North America, Bridgestone Americas, Goodyear and Continental Tire the Americas — including their respective house brands — hold the greatest shares of North America's OE tire market for passenger and light truck, assuming there is little change to the 2022 figures.

Last year, Tire Business estimated Goodyear held the largest share of OE passenger/light truck tires in North America at about 23%, ahead of Michelin (21%) and Bridgestone and Continental (17% each).

The data also indicate those tire makers hold the largest shares of the OE fitments for the Detroit 3 — and by a significant margin, assuming 2022 estimates hold fairly steady.

Besides the four major tire makers discussed already, other tire makers supplying North American vehicles makers include Hankook Tire America Corp., which held an estimated 10% to 25% share of Ford's OE business last year and smaller (less than10%) shares with both GM and Stellantis.

Pirelli Tire North America, likewise, held small shares for Ford and GM fitments in 2022, and Sumitomo Rubber North America (Falken) and Kumho Tire USA also held small shares of Stellantis' OE fitments.

While Michelin, Bridgestone, Goodyear and Continental are the largest suppliers of the Detroit 3 vehicl makers, they also have diverse OE portfolios that include a number of fitments outside of the Detroit 3.

Michelin, for example, last year held shares of at least 25% of the OE tire business with Honda North America, Nissan North America and Tesla, according to Tire Business estimates. It also held 10% to 25% percent of the OE share for Mercedes-Benz of North America and Volvo Car Corp.

Michelin said it is monitoring the UAW strike but declined to comment specifically on the strike's impact.

The Greenville, S.C.-based company did emphasize its commitment to all of its North American customers, however.

"We will continue to work with all our customers to ensure we deliver products and services best suited for their needs," Michelin told Rubber News.

Likewise, Bridgestone held shares of 25% or more of the OE business with BMW of North America, Mazda (North America), Subaru of America, and Toyota Motor Manufacturing, according to Tire Business estimates, along with an estimated share of 10% to 25% at  Honda North America.

As the strike continues to play out, Bridgestone said it will monitor the situation and can adjust as needed.

"As a major supplier of original equipment tires, we supply to most major auto companies, including Ford, GM and Stellantis," Bridgestone Americas said in a statement provided to sister publication Rubber News.

"Our team is continuing to monitor this situation closely, maintain open lines of communication with all of our key stakeholders, and utilize our flexible and agile management to adjust as needed."

Goodyear told Rubber News it has the ability to shift production to meet demand on the replacement side, which helps to mitigate any direct impacts from the UAW strike.

"We are closely monitoring the UAW situation and have the ability to shift production to our replacement portfolio to minimize impact to our business," Goodyear said.

For its part, Goodyear last year held a 25% or greater share of Honda North America's OE busienss, along with estimated 10% to 25% shares of the OE business with Mazda (North America), Mercedes-Benz of North America, Tesla and Toyota Motor Manufacturing, Tire Business data shows.

Continental, meanwhile, held significant OE market shares (25% or more) for BMW of North America, Mercedes-Benz of North America, Nissan North America, Tesla, Volkswagen of America and Volvo Car Corp. Tire Business estimates it also held 10% to 25% of the OE business with Honda North America and Subaru of America last year.

To date, Continental manufacturing has not been impacted by the UAW strike.

"Continental manufactures passenger, light truck, SUV and commercial truck tires for OE and the replacement market in the U.S.," the company told Rubber News. "Continental manufacturing operations will continue at normal capacity."