U.S. tire companies are looking for a way out and determined to stay in the United States

"Rubber and Plastics News" reporter Mike McNulty reported that the old plant, the cost structure is irrational, the heavy burden of retirement benefits, foreign competitors to enter the United States.

American tire business in talking about these issues, as well as other similar issues have been familiar to Yinjingjudian, recite the point. It was agreed that: the cost is king, the cost to have a say in no way reduce the burden of retirement benefits, it is difficult to deal with foreign competitors to enter the United States.

But this does not mean these companies will soon tire leave the United States. Some of the tire business, such as Cooper Tire & Rubber Co., Ltd. (Cooper Tire & Rubber Co.), Michelin North America Inc. (Michelin North America Inc.), Goodyear Tire & Rubber Company (Goodyear) tires, as well as the mainland of North America (Continental Tire North America Inc.) Both said they plan to continue in the future long-term production of tires in the United States.

But most of the companies intend to have the production base, mainly low-grade tire production base in China and other countries to transfer, in order to reduce costs. However, the next problem is that high-end brand tires How far away from us?

There is no doubt that the tire companies today have to face the only and is the biggest challenge of foreign competition, particularly from low-cost countries such as China and South Korea's competitiveness, based in Ann Arbor, Michigan automotive consulting group Ltd. (Automotive Consulting Group Inc.) Vice President, Mr. Dennis Virag said.

Although the main focus of competition in the low-grade tires, people can only look forward to improve the quality of imported tires. However, over time, competition will only intensify.

Another major factor is labor costs, the U.S. tire manufacturers tend to take for this thing. When they talked about factory will be transferred to the outside when they are stressed in this regard, although this is not everyone agreed.

High wages are not necessarily the same as high-cost, Dick Wilkerson, Mr. bluntly that the United States is a high-wage labor market, but not necessarily high cost. In the face of competition, we need to provide a profitable production, investment in technology to do a good job at the same time control costs. Mr. Wilkerson is currently employed is headquartered in Greenville, South Carolina, Michelin North America Inc., he served as executive vice president. However, the tire maker is facing many other difficulties.

According to Toyo Tire North America Inc. (Toyo Tire North America Inc.) Vice president and director Jim Hawk's observation, our major competitors have large matured plants, the traditional production technology, the need to burden a large number of retirees.

Toyo Tire North America is Japan and Japan Tire & Rubber Co., Ltd., a subsidiary of the U.S. market, New Horizons. The company in late 2005 in Georgia, White opened its first U.S. tire plant, and profit from the very beginning.

In accordance with established policy, the growth in our business, and is fully capable of managing business expenses, Hawk said President. Many U.S. firms are indeed relatively old, he added, by a small number of people continuing to work, but give it a lot more than the number of retired workers to pay generous pensions and health care costs.

At the cost of management

In the United States would like to remain successful, tire manufacturers must focus on cost management and quality. According to Mr. Virag of the view that only the two can help you ward off competition from low-cost countries. I am not in favor of the enterprises have continuously reduced the wages of workers. On the contrary, reduce costs and improve the quality of the best ways through innovation, to maximize the leverage of human resources.

Mr. Virag said then: high-performance companies know not to copy competitors by developing products and manufacturing processes to achieve cost control. Even if this strategy in its own products in the field to highlight differences, and their low manufacturing costs, or close to low manufacturing costs.

In the past few years, to reduce the cost of the tire industry in the United States has become a way of survival. In 2006, Michelin North America Inc., Bridgestone / Firestone Inc. (Bridgestone / Firestone), Goodyear Tire & Rubber Company, as well as the North American tire company, and other mainland enterprises have shut down factories, cuts, part of the production line or be eliminated In a state of semi-production. Among them, Cooper Tire & Rubber Co., Ltd. Alabama its Texarkana tire plant laid off 500 people, to stop the production of certain tire specifications, and the plant back to the factory.

Earlier this year, is headquartered in the city of Akron Goodyear Tire & Rubber Company announced the freezing of the original employees a fixed pension plan contributions by the 401 (k) savings accounts to replace, and this is a number of cost-effective Part of the measures. It is reported that a number of cost-saving measures in the pension plan expenses 100,000,000 U.S. dollars, and other retirement benefits expenses 525,000,000 U.S. dollars.

In fact, the above-mentioned action to reduce expenditure but an integral part of the plan. The plan calls for the end of 2008 to save spending more than 1,000,000,000 U.S. dollars. This includes companies in the world, there are five tire plant scheduled to shut down or stop production.

Headquartered in Charlotte, North Carolina's mainland North American tire company, its German parent company China (Continental AG) out of the North American arm. The company has not closed the trade union organizations of the State of Illinois Mount Vernon tire plant, the original 4 factory reduced to 3, at the same time strengthened production facilities in Mexico, Brazil opened a new large-scale tire factory. According to the mainland, general manager of North American Tire, Mr. Alan Hippe, the above-mentioned actions greatly reduced the company's operating costs.

In fact, we long ago to do a good job of decision-making, but only the implementation be delayed again and again, because we want to do more to address more successfully. We will do our best to do the work of its staff, along with taking the road of innovation, he said.

In the current business environment, companies determine whether they can continue to survive in the United States Tianzi the first factor is the ability to adapt to competition and to remain competitive, Mr. Hippe said.

Fortunately, in the past year we have made great achievements. We have successfully implemented innovative measures to lower costs and in the production process received a significant reduction in the cost of the effects, he said. In essence, to save labor costs and increase productivity together, he added, even if the input at a lower cost, we can produce the same high level of the tires.

Development and growth

According to Cooper Tire & Rubber Co., Ltd. President and CEO Roy Armes, introduced after the last few years of fighting in a row, as Ohio-based tire companies have been signs that the company's financial situation has been very Improvement. However, the company must continue to work hard to achieve a higher level of productivity, and actively take the initiative to cut costs and continuously improve product quality, continue to create a leaner organizational structure in order to remain competitive in the United States, Armes said Mr.

Then, Mr. Armes said Cooper Tire & Rubber Co., Ltd. has already made considerable progress in various fields, is now in full usage of more than 90%, but also rising.

We have to optimize plant in the United States and to maximize the expansion of our global business, Armes said, in the United States, we have 3 plant (Albany, Georgia plant, plant Findlay and Tupelo, Mississippi plant), 7 days a week is the start 24 hours a day of production. We have to Texarkana tire plant in Alabama to back-up facility, 5 days a week to start, 24 hours a day of production. Both the short-term or long-term, we are focused on the manufacturing and business activities carried out in lean production and Six Sigma innovation. We are concerned about all aspects of operations, to continue to improve.

According to Mr. Armes, Cooper Tire & Rubber Co., Ltd. is making great efforts to achieve automation. Program in the United States and around the world, will invest one-half or even three-quarters of the plant used to upgrade the level of automation. This will help to improve quality, avoid errors and improve productivity.

Goodyear Tire & Rubber Company figures show that as long as the cost structure of management to succeed, it will continue to produce tires in the United States. In the past few years, we have adopted a series of actions, including trade unions and in the near future (U.S. steel workers union) on a new labor agreement, we have greater financial flexibility to facilitate our North American tire plants To invest and continue to develop exciting new products, the company spokesman said.

According to the latest trade unions and employers signed the contract, Goodyear Tire & Rubber Company promises to pay 1,000,000,000 U.S. dollars, to establish a trust fund for retired union workers to pay health care costs and prescription drug benefits. At present, this is not a small sum of expenditure, but it's for the future, paving the way for cost-saving. The spokesman said that through the establishment of a trust fund that the company has to find a good solution for both companies to reduce the pay of retirees in the welfare burden, for the same trade union membership provides retirement benefits .

Toyo Tire North America Inc., Mr. Hawk said that the majority of the American tire plants are flexible enough. Your daily production factory 50000-60000 tires, tires each day in the market changes in a dime, you have the reaction it? He questioned.

Hawk said: We have the advantage of flexibility. We do not only depend on the device. I doubt very much that these large-scale factory how to survive. Many people say that they have automated equipment, but not need a lot of people. We do not, that in the oriental-the-art highly automated tire production system when the module, Hawk President said.

Driving Force

Several tire companies do not agree with Mr. Hawk automation. Cooper Tire & Rubber Co., Goodyear Tire & Rubber and Michelin North America Inc. can tell in their own technology and automation has been made or will be the progress made. The above-mentioned enterprises that do not Ziwochuishi not a great efforts to continue to improve, both strong teams and have a wealth of experience.

Automation and the cost of production is closely related to, Michelin North America's Mr. Wilkerson said that the production process is very important, the current automation is the key. As well as the types of products from leading technology, customers want to see innovative products, not copies. They want value-added products, and leading-edge technology is the driving force. As a result, we are committed to this.

On the other hand, despite the continent's North American tire that the technical lead over its rivals, but said Hippe, it does not over-reliance on automation. The more you automate your production more flexible, is limited. That is why we stress that low-cost production. Automation you can not resolve all the difficulties.

Mr. Hawk, tires properly handle the relationship between three major businesses: raw materials, labor and fixed assets. He said that for raw materials, most of the tire companies are sitting in the same boat, which is the same as in the external environment, but most companies is too much focus on lower labor costs, and almost no interest in fixed assets .

We want to know, he said, you will be transferred to the production base for countries with low labor costs, you want to be the low-wage, but how do you deal with inventory and transportation costs?

This may be an accurate assessment, however, why the U.S. tire manufacturer in the United States to establish a number of modern factories, but state or city government did not consider giving more incentives for them? Rubber chemicals market, the joint venture company (Chemical Market Associates Inc.) C4 olefin elastomers and director Bill Hyde, in Houston to issue such a question.

Tire industry in the United States, the average wage of workers are Polish and Chinese counterparts 5-17 times, Hyde said. Direct labor costs account for about tire of the total cost of 20% of the Chinese tire with low labor costs can be 30 times more, he added.

Mr. Hyde, business investment and automation, they will be the most good. He noted that not many state or city government issued a number of generous programs to attract enterprises to invest in the tire. He pointed out that in history, some of the grass-roots organizations have opposed Toyo Tire North America, the company settled in Georgia. It should set out a comprehensive package of incentives to attract entrepreneurs in the United States to build a new plant, Hyde said that the President proposed.

Automotive Consulting Group Co., Ltd. (Automotive Consulting Group), Mr. Virag said the fact that China is positioning itself as the tire manufacturing power.

It is for this reason that the United States at all levels between workers and management to achieve more harmonious labor relations, he said. The two sides need to understand the competitive environment, and work together to maintain a competitive advantage and local employment opportunities. And that both employers and employees should equally share the risk and share returns. Need to pay attention to other things

U.S. land, sea and air forces as the exclusive tire supplier Michelin North America, the company believes that they are a global company, is clearly better suited to operate in various markets to establish a production base. The response is better, we have reduced supply chain costs, Wilkerson said, this is our advantage. But you have to have a sustainable business model. We believe that our plan is a plan to emerge victorious in every battle.

Michelin North America Inc. in the U.S. market to sell tires 90% to 95% of the country's production, the factory tires in the United States a total of more than 23,000 employees.

According to Mr. Hippe, China Tire North America Inc. is implementing a three-year plan, which is to increase the high-performance tires and light truck tire products, increase market coverage. In the meantime, the company was preparing to introduce 500 new products, tires, including the introduction of new products and the expansion of the original product line, covering brands including Continental (mainland) and the General (General).

Mr. Hippe went on to say that in the past few years, China Tire North America Inc. in the United States of the original parts market (market-child support) has made a greater share in the replacement tire market also has potential for growth.

China Tire North America plans to invest over the next three years 700000-1000000 US dollars to the Mount Vernon plant. We produce high-grade tires in the United States for a very long time, and plan to continue to do so Hippe said. The company's low-end products in Brazil tire manufacturers.

Cooper Tire & Rubber Co., Ltd. The main direction has been set in the replacement tire market, focusing on active and rapidly improving cost structure, improving quality and service standards. And almost all of the U.S. tire business, the company's most high-end tire production in the United States also arranged, but low-end products, plans to transfer production to China.

Michelin North America's, Mr. Wilkerson said that the company be able to balance the cost - effective lever to continue the production of tires in the United States. For us, this has been a long-term plan for sustainable development. Our low-end market has been the Chinese occupation. We have to maintain production and the development of a strategy to reduce costs and avoid the loss of other markets.

As for the way in the future, he went on to say that service in the market, Michelin North America will remain the same strength. However, Michelin North America, the company must increase productivity and efficiency. We will stay here, Wilkerson said, we are fighting a war economy, we do not intend to withdraw from the war.

"Rubber and Plastics News" reporter Brad Dawson, Mr. and Mr. Bruce Meyer participated in the report, and would like to note.