Consolidating aids “cradle to grave” tire services

Michelin North America’s $69 million acquisition of Oliver Rubber Co., the retreading subsidiary of rival Cooper Tire & Rubber Co., is another salvo in the effort to offer “cradle to gave” tire-management systems to truck fleets

Michelin North America’s $69 million acquisition of Oliver Rubber Co., the retreading subsidiary of rival Cooper Tire & Rubber Co., is another salvo in the effort to offer “cradle to gave” tire-management systems to truck fleets.

“This acquisition complements the manufacturing capability and service network of Oliver with that of the Michelin Retread Technologies (MRT) network, enabling us to extend its reach in the growing commercial retreading market,” said Luc Minguet, COO of Michelin Americas Truck Tire.

“We believe the two brands, managed according to Michelin’s strategic focus, will offer the North American trucking industry broader access to products and services to better meet their needs,” he added.

Michelin’s purchase of Oliver comes hard on the heels of Bridgestone America’s $1.05 billion buyout of national retreader Bandag this June – another effort aimed at creating a “total tire package” for fleets, Saul Solomon, Bandag chairman, CEO & president, told FleetOwner.

“It allows us to manage the tire casing over its entire life cycle, saving fleets money on their total tire costs,” said Solomon, formerly vp & general counsel of Bridgestone America.

Both Michelin and Bridgestone’s retread acquisitions come none too soon. Both new and replacement tire business is down this year – reflecting sharply reduced sales of new Class 8 trucks due to the mandated introduction of expensive emission control systems this year.

“OE [original equipment] truck tire sales are off due to the decline in truck sales die to ’07 emission rules,” Mark Emke, Bridgestone’s chairman & CEO, told FleetOwner. “The replacement tire market has also been a little soft in the first part of this year. But we expect to see that turn around by the end of the year.”

For Michelin, buying Oliver Rubber from Cooper represents the culmination of a two-year effort to vastly expand its truck tire operations. In 2005, it spent $15 million to double the plant capacity of its Covington, GA, tread facility and earlier this year opened a new retread manufacturing plant in Mexico.

“Demand for … retreads in North America is exploding,” said Michelin’s Minguet. “Demand is growing by half a million treads a year and our franchisees plan to open 15 retreading plants this year.”

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