Detore: Wave of tire industry news so far in 2023

It's often a challenge to reset to work mode after you've spent eight days on a white-hot sandy beach and comfortable fishing boat on a bucolic lake in Northern Ontario.

It is especially difficult when the WiFi is so spotty that you have no choice but to disconnect and wait until you get home in order to share photos of the 8.3-pound, 29-inch walleye you landed.

A 540-mile-plus drive through one province and three states, though, slaps you back to reality like a rogue 4-foot wave.

And as I thought about the first six months of the year — the July 17 issue is the second of our two Mid-Year Tire Reports we proudly produce — I kept shaking my head in disbelief.

The sell-off of 590-plus TBC retail outlets ... an investor group making demands of Goodyear, North America's No. 1 tire maker ... the growth and subsequent might of Turbo Tire ... Nexen Tire USA's plans to build a North American tire plant .... the list seems endless.

More industry-rattling events occurred in the first six months of 2023 than usually happen in any single year.

As I travel across the world and talk to tire dealers, it's clear that some don't hear about every piece of industry news. Makes perfect sense. They are so focused on keeping their dealership successful that they shield themselves from the world around them.

So in an effort to review the industry at mid-year, here's a quick look at some of the more newsworthy events that have occurred in the last 182 or so days:

The most significant event, of course, occurred in late May when Mavis Tire Express Services Corp. completed its purchase of 595 retail stores from TBC Corp. operating under the NTB Tire & Service Centers and Tire Kingdom Centers brands.

Mergers and acquisitions have been around longer than the tire itself, but this one, involving that number of stores and that number of employees was jaw-dropping.

We heard rumors of this impending transaction back in November at the Specialty Equipment Market Association (SEMA) Show. As they say, where there is smoke, there is fire.

With the final stroke of a pen — and likely a boat load of cash (the purchase price was not disclosed) — private-equity-backed Mavis solidified itself as the largest independent retail tire dealership in North America. It is estimated that the TBC retail holdings generate up to $2 billion in revenue annually.

It's as if Michael Jordan's dynasty Chicago Bulls team of the 1990s had acquired LeBron James in his prime.

It was a couple of weeks earlier in May when a West Palm Beach, Fla.-based investment firm, Elliott Investment Management L.P., disclosed that it had approached Goodyear management, calling for significant changes in the way the tire maker conducts business, in an effort to "reverse this period of negative performance and set the company on a path to sustainable value creation."

The investment group, which claims to represent "approximately 10% economic interest" in Goodyear, implored the Akron-based tire maker to: appoint five new "highly qualified" individuals to its board to improve governance and spearhead change; divest its corporate retail stores and use the subsequent capital to pay down debt and improve financial flexibility; and form an operational review committee to develop an operational and development plan.

Goodyear, to its credit, responded immediately, agreeing to meet with the group. Whether that meeting has taken place at this writing remains unknown.

Of course, these sorts of exchanges between investors and corporate entities are common. In the tire industry, though, not so much.

The last similar scenario to garner as much interest happened in late 2016, with Icahn Enterprises L.P.'s successful takeover of Pep Boys – Manny, Moe & Jack.

This is probably the last news that Goodyear — the No. 3 tire maker globally — wanted in the public domain in the months leading up to its 125th anniversary.

No matter how this plays out, the iconic American brand will remain an industry leader in the next 125 years and beyond.

It isn't every day that a overseas tire maker reveals plans to build plant in the U.S.

But that's exactly what happened in late May when South Korea's Nexen Tire Corp. said it expects to finalize a location for a U.S. plant — its first in North America — by the second half of this year, with the intent to begin producing tires there within the next five to six years.

Nexen is targeting sites in eight states in the Southeast for the plant. It would mark Nexen's first new factory overseas in nine years.

At least four other tire manufacturers announced plans in the last decade to build a plant in the U.S. — Balkrishna Industries Ltd.; Guangzhou Vanlead Group Co. Ltd. (Wanli Tire); Qingdao Sentury Tire Co. Ltd.; and Triangle Group — only to pull back because, among other factors, economic conditions.

But Seoul-based Nexen seems determined to follow through, based not only on its success — Nexen's sales jumped 25% in 2022 to $2 billion — but also its burgeoning OE business.

Turbo Wholesale Tires made some industry noise in June with its surprise merger with Tire Wholesalers Inc. (TWI), two venerable wholesale businesses with decades of experience and extensive customer bases.

Both companies will retain their separate identities in the marketplace.

In addition, private-equity-backed Turbo held a gala on the West Coast to announce the expansion of its tire lineup, adding to its Lexani, Lionheart and RBP brands, while introducing the company's first run-flat and electric-vehicle (EV) lines.

Speaking of EVs, not only have the premium brands ramped up production of EV tires — Bridgestone, Goodyear, Hankook, Michelin, Pirelli and Yokohama among them — but the value tiers have jumped into the fray.

In addition to Turbo, Omni United and Sailun Tire Americas either announced plans or released EV-specific products.

Meanwhile Continental A.G. leads a handful of tire makers steadfast in their belief that the tires they currently produce can serve the EV market as well as it can serve vehicles powered by internal combustion engines.

Follow the leaders

And if that is not enough, several companies within the industry have new leaders, all named in the first half of this year.

Among them: Hankook (Rob Williams); Mickey Thompson (John Bodart); TireHub (John Cavanaugh); TBC (Sam Kato) ; Pep Boys (Scott Collette); and Ralson Tire North America (Jim Mayfield).

Two disasters that incurred in the first half also are noteworthy.

Goodyear's tornado-ravaged plant in Tupelo, Miss., plant was to resume production in early June and be back to full production by the third quarter. The company said the natural disaster will cost it up to $130 million in lost sales in the second quarter.

Meanwhile a fire in mid-March halted production at Hankook Tire & Technology Co. Ltd.'s factory in Daejeon, South Korea. Hankook said part of the plant that was not affected by the fire is doing test-run productions. It's unclear when full production might resume.

The road ahead

And let's not count the announcement that Carlstar Group is phasing out the Carlisle brand name on its products. That news was revealed on July 5, a great start to the second half of 2023.

Buckle your seat belts. If the second half of 2023 is as memorable as the first, it will be a ride like no other.