OTR dealers eager for return to normalcy

Last year brought uncertainty. This year brings the same. And hope.

There are many questions and opinions surrounding the market for off-the-road (OTR) tires, as there are in life, as 2021 begins to unfold amid the continuing pandemic.

Times are anything but normal as vaccines begin to roll out around the country, but uncertainty about supply and distribution as well as skepticism by some means this year remains clouded regarding a return to normal life.

At the Tire Industry Association (TIA), the trade group had to cancel its annual OTR Tire Conference, scheduled for February at a resort near Tucson, Ariz., due to the ongoing impact of COVID-19.

Nevertheless, TIA President Dan Nothdurft said he sees 2021 as being a good year for that particular segment of the tire market — and the market as a whole, for that matter.

"For the entire Tire Industry Association, it's going to be an up year. For the OTR business, I think it's going to be business as usual. There's a lot of growth coming out of the western segment of the country," he said.

Last year "ended up decent for the most part, …" Mr. Nothdurft said. "We were all in uncharted water and didn't know where the market was going."

With those experiences now under the industry's belt, the TIA president expects the OTR segment "to be really good this year."

Mr. Nothdurft pointed to different factors that could impact how the OTR market performs in 2021, including the possibility of a significant federal infrastructure bill coming out of the White House. If Congress can agree, that could free up additional money to help boost the economy, including industries using OTR tires.

While infrastructure is one area that's seen as a potential, or even probable, area of growth, mining is a little murkier. That's because it remains unclear what actions the new Biden administration could take in terms of regulating the industry and the potential impact, he said.

Mr. Nothdurft said it will be "business as usual" until it's not.

"There's some uncertainties in that area," he said, "but for the most part, I think OTR is going to be fantastic."

Challenging year

For Ty Smith, vice president of OTR sales and operations at McCarthy Tire Service of Wilkes-Barre, Pa., 2020 was demanding.

"Last year was a challenging year. With the COVID issues, just actually getting product to customers was very tough," he said, "and it's basically the same this year.

"Obviously, our overall business has been off. The earthmover part of our business grew, but it was basically due to acquisitions."

McCarthy Tire Service acquired 13 GCR Tire commercial locations and three retread plants in 2019 from Bridgestone Americas, and the added sales from those sites helped boost OTR tire numbers throughout 2020, Mr. Smith said.

"This year, coming up, who knows? This election. I don't know. And I hate to say that, but the election itself, we just don't know what the new administration is going to be," he said. "We don't know stimulus money. We don't know what they are going to do as far as the infrastructure."

If additional federal stimulus money does get pushed through, Mr. Smith said, "it will definitely help the industry. It is definitely much needed."

McCarthy Tire Service saw business hold steady through May last year before seeing a dropoff in June and July. The last five months of the year were fairly steady, he said, although December brought a boost for the business as some customers were in the position to pre-buy tires in 2020 to get cash off the books for tax purposes.

"I think for the whole, business was off 15 to 20%. That's commercial and OTR. Our business, personally, was pretty strong in the earthmover. We had a decent year. I'm on several different boards with dealers, and it was pretty much across the board a 15 to 20% (decline)," Mr. Smith said.

That was also the case at Lewis General Tires Inc. of Rochester, N.Y.

"We were down about 15%," President Craig Lewis said about OTR tire sales. "Pretty close in line with the rest of the commercial business. Our retail business was pretty flat."

While Lewis General Tire did not shut down, many customers did for a period of time last year and the business has not quite returned to normal since.

"What should have been our super-busy season was busy to steady," he said.

As for 2021, Mr. Lewis said he could see the year going either way.

"I could make an argument as to why it's going to be a terrible year. I could make as to why it's going to be a great year," he said.

"I don't know if we've felt the full effects on the economy of all the shutdowns. But on the other hand, we might be able to pull a rabbit out of the hat and print enough money to make things look good for a while," Mr. Lewis said. "My gut tells me it's probably somewhere in the middle. It usually is."

This year is "about holding things together and keeping our customers taken care of. We've had a lot of challenges," he said. "I would certainly say we've been very focused more on cash than anything. We have certainly cut back on capital expenditures. I would say keep your power dry."

Best year ever

Maine Commercial Tire in Lewiston, Maine, also saw some customers pre-buy tires in December in preparation for the new year. That was just part of a trend the company saw all year.

"This (2020) is the best year we've ever had. I'm not sure what's driving it," CEO Jim McCurdy said.

"I don't see a reason to think it's going to slow down. All our customers are very healthy. Quite a few of them were wanting to spend money before the end of the year because they made so much money. So they bought tire inventory that they didn't need just to have it. So I don't see any downturn at all, especially related to the coronavirus," he said.

Mr. McCurdy said his area of the country is experiencing a strong economy for companies and people in blue collar work, a trend that's helping drive tire sales for his firm.

As far as OTR tire supply, Maine Commercial Tire has experienced some issues from certain brands at certain points. But the firm has been able to cover any deficits with other brands to keep their customers' machines rolling.

"It's sort of a ping-pong match with off-the-road tires," Mr. McCurdy said, about availability. His customers, however, do not mind switching brands as needed. "As long as it's round and black and holds air, they don't care."

Maine Commercial Tire has been running flat out and wants to hire even more people these days to help meet demand. The company, however, like many others, is having difficulty attracting enough skilled workers.

After a bit of a dip in work earlier on in the pandemic, Lewis General Tires is back up to full staffing, and Mr. Lewis said he's impressed with the new generation of staff that's coming on board.

"I can tell you that I'm more and more impressed with the generation just entering the workforce. I, myself, am a millennial. And we get a pretty bad rap, and it's largely deserved, although there's a lot of factors involved in that," he said.

"We've got a bunch of young guys here who are barely 20. I've been pretty impressed with that generation so far."

"Really to me the key is always have your eyes open and keep your good people. Take advantage of the opportunities that come your way," Mr. Lewis said when it comes to hiring.