93 Henderson Street, Riverview, NB E1B 4B6Telephone: (506) 386-4306 • Fax: (506) 387-3987

Email: fconnor@nbnet.nb.cawww.atda.ca

Vol. 17 No.1 June, 2015Summer Edition

A landmark tire:

The Uniroyal giant tire is 50A landmark of a Detroit suburb celebrated its 50th anniversary this week. The giant Uniroyal tire located adjacent to I-94 in Allen Park, Mich., is billed as the largest tire model ever built.

The tire has stood as an important symbol of Uniroyal’s 123-year heritage for half a century, Ray Fischenich, Uniroyal brand manager and country operations marketing manager, told members of the Automotive Press Association (APA) at a luncheon held underneath the tire.

Fischenich also took time to explain Uniroyal’s position in the marketplace now, as one of the brands currently being sold by Michelin North America Inc.

Uniroyal now competes in the third tier tire segment, according to Fischenich. He said this segment is the largest segment of the tire market and also is the fastest-growing segment. Fischenich told APA members that this segment is for the budget-minded consumer who looks for a specific price point.

He added that Uniroyal looks to partner with dealers on three things – pricing, supply and coverage. On a positive note for tire dealers, Uniroyal tires will be at supply levels not seen in years, said Fischenich. Uniroyal will be expand-ing its Tiger Paw GTZ tire line with six new sizes this December and will launch ten new sizes of its Tiger Paw Touring line in March 2016.

As for the giant Uniroyal tire, here are some fun facts, according to the company. The tire originally was constructed as a Ferris wheel for the 1964-1965 World’s Fair in New York. The 96-passenger Ferris

wheel carried more than 2 million riders, including dignitaries and celebrities, including Jackie Kennedy and the Shah of Iran. The company also says that Pete Selleck, chairman and president of Michelin North America Inc., also rode the Ferris wheel.

The structure was designed by Shreve, Lamb and Harmon, the same architec-tural firm that designed the Empire State Building.

When the fair ended in 1965, the tire was shipped by rail in 188 sections to Detroit. It was reassembled in four months and anchored in concrete and steel off I-94 at the Uniroyal sales office.

It is the largest tire model ever built, standing 80 feet tall and weighing 12 tons.

The tire’s interior is 120,576 cubic feet, and the tread measures half-a-foot deep.

The Giant Uniroyal Tire was given its first update in 1994 with neon lighting and a new hubcap added to the tire’s body. In 1998 it was modified again, this time with a giant nail embedded to promote Uniroyal’s self-sealing NailGard passenger tire.

The biggest renovation occurred in 2003, when Uniroyal invested nearly $1 million to refresh the landmark as part of Detroit’s I-94 corridor revitalization effort. Those updates included replacing 30 steel beams inside the tire, installing asphalt and storm drains, painting the exterior, applying reflective lettering, and completing other structural improvements — all made to ensure the longevity of the tire.

Atlantic Tire Dealers AssociationElected Officers & Directors 2014- 2016

Past PresidentStephen Quigley

PresidentShane Sutherland

1st Vice PresidentFen Mabey

2nd Vice PresidentEarle Atkinson

DirectorsErnie Titus

Rod CreaserChad Singleton

Directors to the T.D.A.C. Shane Sutherland, Frank Connor

Executive Director - Frank ConnorEditor - Frank Connor

Is there a tire sales and service company in your area that is not a member of The Atlantic Tire Dealers Association? If so, please

advise the executive director. Also, we would appreciate it if you would contact such companies to advise them of the advantages

of becoming a member.

Atlantic Tire Dealers Association

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MTD January 2015

West Coast port problemsNorth American container port demand has increased

significantly the last three years. Record tire imports have added to the congestion problems at ports, especially in Los Angeles and Long Beach, Calif.

The Long Beach Board of Harbor Commissioners recently approved measures to relieve congestion. It also petitioned the Federal Maritime Commission “for permission to work in concert with the neighboring Port of Los Angeles.” The Port of Los Angeles also wants to work together.

The Commission gave preliminary approval “to a cap of four days for parking or dockage fees charged by the port to ships at berth,” according to the Port of Long Beach. “Due to delays in cargo movement, ships have needed to stay at berth longer and have had to pay higher fees. With the dockage relief, the Port would forgo an estimated $150,000 in fees by allowing longer stays without charge during stays from Dec. 1, 2014, through March, 31, 2015.”

The development of a new generation of “mega ships” and a shortage of “truck trailer frames used to haul cargo containers” have been partially blamed for causing bottlenecks at ports around the country. Increased trade, although desired, has simply exacerbated the problems.

The growth of e-retailing, or e-tailingThere is no question retail tire sales over the Internet are

increasing. But at what rate? And what is the percentage of consumers who buy them online?

When American Tire Distributors Inc. (ATD) launched TireBuyer.com in 2008, it estimated 3% of the tires sold in the U.S. — more than 7 million tires — were being sold to consumers over the Internet. According to its own research, consumers between the ages of 18 and 34 years of age, espe-cially women, were more likely to purchase tires online “and to shop exclusively online.”

When asked how likely they would be to purchase tires online in the future, 30% of the consumers surveyed by ATD indicated they were “very or somewhat likely” to do so.

In 2013, Matthew Walker, managing director of Tireweb Marketing Inc., was quoted as saying 90% of shoppers preferred to purchase tires in the store. “We also know most of them start their research online, and about 50% will leave a website if it doesn’t have pricing information on it.”

The 2013 “Google Auto Tires Purchase” online study de-termined 10% of consumers purchased tires online in 2012. That jumped to 29% in 2013. Online tire buyers also were spending more money per tire, and considering more brands during online research.

In terms of online purchasing dollars spent on automotive replacement parts, three categories represented half of the e-tail dollar volume in 2013 and none of them were tire-related. According to the Auto Care Association’s “E-Tailing in the Automotive Aftermarket” report, the top three product categories were braking systems, primarily pads and shoes; ignition and engine (fuel pumps, alternators, ignition coils, etc.); and glass, mirrors and lamps.”

When even Wal-Mart Stores Inc. is investing a considerable sum of money on e-commerce at the expense of store growth, retail sales online cannot be ignored.

It should be noted, however, that for now, online-only retailers don’t have to pay sales tax. That may change soon.

“The Marketplace Fairness Act” grants states the authority to compel online and catalog retailers, no matter where they are located, to collect sales tax at the time of a transaction. That would put them on a level playing field with local retailers.

However, the act requires states to simplify their sales tax laws before they can receive “collection authority.”

Simplification is required because two Supreme Court rul-ings cite “concern that collecting sales tax for multiple states would be too difficult.” ■

Facts section: Tire shipments

Chart 7WORLD LEADERS IN NEW TIRE SALES

(fiscal year 2014; in billions of U.S. dollars1)

Tire company 2014 2013

Bridgestone Corp. $29.3 $31.0

Groupe Michelin $24.4 $25.5

Goodyear Tire & Rubber Co. $17.8 $18.9

Continental AG $12.9 $12.7

Pirelli & Cie SpA $8.0 $8.1

Sumitomo Rubber Industries Ltd. $6.9 $7.0

Hankook Tire Co. $6.4 $6.5

Yokohama Rubber Co.2 $4.8 $4.9

Cheng Shin Rubber Ind. Co. Ltd.3 $4.3 $4.5

Cooper Tire & Rubber Co. $3.5 $3.4

Kumho Tire Co. Inc.2 $3.3 $3.4

Toyo Tire & Rubber Co. Ltd. $3.0 $3.0

U.S./CANADIAN LEADERS IN NEW TIRE SALES(fiscal year 2014; in billions of U.S. dollars)

Tire company 2014 2013

Bridgestone Americas Inc. $8.8 $9.3

Goodyear Tire & Rubber $7.3 $8.0

Michelin North America Inc. $7.3 $7.7

Continental Tire the Americs LLC $2.8 $2.8

Cooper Tire & Rubber $2.6 $2.5

Toyo Tire Holdings of America Inc. $1.5 $1.5

Hankook Tire America Corp. $1.3 $1.3

Yokohama Tire Corp. $1.3 $1.4

Sumitomo Rubber Industries4 $.90 $.91

Kumho Tire U.S.A. Inc. $.70 $.74

Pirelli Tire North America $.64 $.651 The average exchange rates between foreign currencies and the U.S. dollar differed from 2013 to 2014 as follows: Japanese yen, up 8.2%; Korean won, down 3.7%; Taiwan dollar, up 2.2%. The euro was relatively unchanged.2 Yokohama Rubber Co. and Kumho Tire Co. Ltd. signed a Memorandum of Understanding on Nov. 29, 2013. As part of the strategic alliance, the companies will share resources to “jointly pursue research and development of tire related technologies to compete with the Big 3,” according to Kumho.3 The Cheng Shin Rubber USA Inc. subsidiary does business as Maxxis International.4 Sumitomo Corp. of America is run independently of Sumi-tomo Rubber Industries.

34

56

MTD January 2015

Consumer tire tiers by brands (in random order)

Tier 1 (major tire companies’ premium brands): Michelin, Bridgestone, Goodyear.

Tier 2 (upper- and middle-market brands): Continental, Pirelli, Hankook, Yokohama, Toyo, Falken, Kumho, Dunlop, Cooper, Firestone, BFGoodrich, General.

Tier 3 (value brands; all private brands): Nexen, Hercules, Multi-Mile, GT Radial, Mastercraft, Sumitomo, Big O, Cordovan, Delta, Fierce, Fuzion, Kelly, Nitto, Sigma, Landsail, Delinte, Kenda, Vredestein, Nokian, Sailun, Eldorado, Uniroyal.

Tier 4 (low-cost brands): Atturo, Linglong, Goodride, Dy-natrac, Warrior, Duraturn, Aeolus, Zenna, Starfire, Primewell, Federal.

The International Trade Commission, in determining the need for tariffs in 2009, categorized tires into three tiers. Its Tier

1 definition was the same as ours. Tier 2 included Firestone, Dunlop, BFGoodrich, Continental, Yokohama and Toyo. Tier 3 included GT Radial, Runway, Primewell, Douglas and Riken.

It doesn’t seem to matter where the tire is produced. Consum-ers rely on the tire dealer under our industry’s well-established “70-30 Rule,” which states 70% of consumers have no tire brand preference. They rely on the dealers’ recommendations for the brands they buy.

Of the 30% who have a brand preference, 50% of them buy alternate brands based on the recommendations of their tire dealers. In other words, the dealer greatly influences the tire purchase 85% of the time.

OE market and market shareLight vehicle production in the U.S. was up nearly 5% in

2014. It totaled 11.9 million units, with crossover vehicles

Facts section: Brand share

Chart 92014 ORIGINAL EQUIPMENT BRAND SHARES

(U.S./Canadian light vehicles, excluding imports)

CHRYSLER/FIAT

Goodyear 50%

Michelin 15%

Firestone 7%

BFGoodrich 5%

Continental 5%

Bridgestone 4%

Kumho 4%

Pirelli 3%

Yokohama 3%

General 2%

Nexen 2%

FORD

Michelin 23%

Continental 19%

Goodyear 18%

BFGoodrich 10%

Pirelli 10%

General 8%

Hankook 8%

Bridgestone 2%

Cooper 1%

Toyo 1%

GENERAL MOTORS

Goodyear 37%

Michelin 20%

Bridgestone 18%

Firestone 13%

Continental 6%

Hankook 4%

General 2%

BMW

Pirelli 30%

Bridgestone 24%

Continental 22%

Dunlop 20%

Michelin 4%

HONDA

Michelin 42%

Goodyear 32%

Bridgestone 15%

Continental 4%

Firestone 3%

Hankook 3%

Yokohama 1%

HYUNDAI / KIA

Kumho 38%

Hankook 36%

Nexen 18%

Continental 8%

MERCEDES-BENZ

Continental 29%

Pirelli 26%

Dunlop 19%

Bridgestone 11%

Michelin 10%

Goodyear 5%

MITSUBISHI

Nexen 50%

Toyo 50%

NISSAN

Continental 38%

Michelin 30%

Goodyear 12%

BFGoodrich 8%

Toyo 6%

Bridgestone 3%

Dunlop 2%

General 1%

SUBARU

Bridgestone 68%

Continental 30%

Goodyear 2%

TESLA

Michelin 50%

Goodyear 50%

TOYOTA

Bridgestone 33%

Michelin 24%

Goodyear 12%

BFGoodrich 8%

Dunlop 8%

Firestone 5%

General 3%

Toyo 3%

Continental 2%

Yokohama 2%

VOLKSWAGEN

Continental 52%

Hankook 32%

Bridgestone 16%

38

7

MTD January 2015

leading the way. Canadian production was up, too.

The increase was needed: Light vehicle sales were up 5.8% in the U.S., to 16.4 million vehicles, according to the Na-tional Automobile Dealers Association (NADA), and 6.1% in Canada, to more than 1.8 million vehicles, according to WardsAuto.com.

General Motors Corp. remained the market share leader at 19.2%, followed by Chrysler/Fiat (Fiat Chrysler Automobiles US LLC) at 18%. Ford Motor Co. was a close third at 17.9%.

Toyota Motor Sales U.S.A. Inc. , with a 13.5% market share, and American Honda Motor Co., with a 12% share, rounded out the top five vehicle manufacturers. Nissan North America Inc. was sixth with a 6.7% share.

The youngest and smallest of the OEMs, Tesla Motors Inc., accounts for less than half of one percent of the light vehicles produced in the U.S. However, the electric car company’s output was up 44% versus 2013. More than 60,000 electric vehicles were sold in the U.S. last year, up from the previous year, according to WardsAuto.com. In contrast, hybrid sales were down.

In line with increased vehicle demand, OE passenger and light truck tire ship-ments were up 5% (see Chart 3 on page 30). Five brands were up in market share: Goodyear, Pirelli, General, Toyo and Nexen (see Chart 10).

American car owners drove an esti-mated 3 trillion miles last year, up ap-proximately 1%. (There are roughly 260 million registered domestic vehicles on the road today.) Nick Mitchell, senior vice president of research for Northcoast Research Holdings LLC, said in light of his company’s positive Miles Driven Index reading for last November, “and the favorable outlook for gasoline prices, we believe the improvement in the underlying traffic volume trends should continue in December and throughout 2015. If historical relationships hold true, this backdrop should provide a tailwind to the intermediate demand trends across the automotive aftermarket and tire industries.”

Modern Tire Dealer 100 favors Michelin, but...

The three most popular brands among the Modern Tire Dealer 100

list of the top independent tire dealers in the U.S. are Michelin, Goodyear and BFGoodrich, the same three as last year. Michelin is offered by 78.5% of the top 107 (there was a 10-way tie for the 98th spot), while Goodyear and BFGoodrich are sold through 66% of them (71 deal-ers each).

However, Bridgestone, although sold through a fewer number of dealers, was offered in more outlets than any other brand, 4,604 out of 5,630 (see Chart 11).

Of the 17 top brands, 11 had greater store counts than the year before: Mi-chelin, Bridgestone, Continental, Fires-tone, General, Hankook, Uniroyal, Kelly, Falken, Kumho and Nexen.

For the ninth consecutive year, Mi-chelin topped the list of brands sold by the MTD 100. ■

Facts section: Brand share

Chart 10U.S./CANADIAN OE CONSUMER

TIRE MARKET SHARE(excluding imported

vehicles)

Brand 2014 2013

Goodyear 27.8% 26.4%

Michelin 20.6% 22.0%

Bridgestone 12.6% 12.7%

Continental 10.9% 11.1%

Hankook 4.8% 5.0%

Firestone 4.7% 4.8%

BFGoodrich 4.2% 4.4%

Pirelli 3.4% 3.1%

General 2.6% 2.5%

Kumho 2.6% 2.6%

Dunlop 2.0% 2.0%

Nexen 1.4% 1.0%

Toyo 1.3% 1.2%

Yokohama 0.9% 1.0%

Cooper 0.2% 0.2%

Chart 112014 BRANDS LISTED

BY THE MTD 100(Total outlets: 5,630)

Rank by No. of dealers

Dealers/outlets

1. Michelin 84/4,536

2. Goodyear 71/4,277

2. BFGoodrich 71/4,176

4. Bridgestone 67/4,604

5. Continental 62/3,616

6. Firestone 59/3,069

7. Yokohama 54/3,722

8. Cooper 51/3,308

8. General 51/3,176

10. Hankook 45/3,395

11. Dunlop 41/3,495

11. Uniroyal 41/2,923

11. Kelly 41/1,889

14. Pirelli 34/3,724

15. Toyo 32/2,433

16. Falken 30/3,228

16. Kumho 30/2,651

18. Nexen 23/1,658

Chart 122014 CANADIAN REPLACEMENT

CONSUMER TIRE BRAND SHARES

PASSENGER TIRE(based on 16.5 million units)

LIGHT TRUCK TIRE(based on 2.8 million units)

Brand % Brand %

Goodyear 12.5% Goodyear 16.0%

Michelin 12.0% Michelin 11.0%

Motomaster 11.0% BFGoodrich 9.0%

Bridgestone 8.0% Motomaster 9.0%

BFGoodrich 6.0% Bridgestone 8.5%

Hankook 6.0% Firestone 5.5%

Continental 4.5% Yokohama 5.0%

General 4.0% General 4.5%

Toyo 4.0% Hankook 4.0%

Firestone 3.5% Toyo 4.0%

Yokohama 3.5% Continental 3.0%

Cooper 3.0% Uniroyal 3.0%

GT Radial 3.0% Hercules 2.0%

Nexen 3.0% Kumho 2.0%

Uniroyal 2.5% Pirelli 2.0%

Dunlop 2.0% Cooper 1.5%

Hercules 1.5% Dunlop 1.5%

Kumho 1.5% GT Radial 1.0%

Nokian 1.5% Kelly 1.0%

Pirelli 1.0% Multi-Mile 1.0%

Westlake 1.0% Others 5.5%

Others 5.0%Brands must have at least 1% of the market in ship-ment numbers to be listed at 1% in the passenger and/or light truck tire segments.

40

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10

MTD January 2015

There are more than 550 consumer tire sizes available in the aftermarket, according to the Tire & Rim Associa-tion, too many to seriously consider stocking. If you

were building an inventory from scratch, however, stocking the two most popular sizes would be a good place to start.

The top two replacement passenger tire sizes in 2014 were hardly surprises: 205/55R16 and 215/60R16. Other top sizes (P-metric and metric combined) included the following:

195/65R15 225/50R17 235/70R16 225/60R16 215/70R15 215/55R17 205/65R15 265/70R17 215/65R16 195/60R15 235/70R16 225/65R17

One of the sizes to look for in the near future is the 235/50R18, which has been OE on the hot-selling Ford Escape.

The top-selling P-metric light truck tire sizes were 265/70R17, 235/75R15, 235/70R16 and 245/65R17. LT245/75R16 has been the number one replacement LT size for the last six years; it also was the top OE LT size from 1993-2010. (See Chart 21 for the most popular OE LT sizes from 2011-2013).

Major brand versus low-cost radial pricingThe average advertised price for the 215/55R17 tire is

$138.27, broken down as follows: $144.53 for a major brand, and $98.24 for a low-cost radial (see Chart 24 on page 53 for benchmark pricing). Overall, the price differential between the two is nearly 50%.

Advertised prices for higher cost major brands and low-cost radial LT tires are closer. The percentage difference ranges from 15.1% for the LT245/75R17 to 24.9% for the LT245/75R16.

The split is similar when speed rating is taken into account, at least for the H- and V-rated tires.

Tire Intelligence LLC, which tracks tire pricing on a daily basis in seven countries and has a database of 540,000 prices, broke down the domestic 215/55R17 price structure from T- through V-rated tires.

Advertised pricing breakdown, 215/55R17Speed Major LCR Difference OverallV-rated $148.26 $97.33 52.3% $140.97H-rated $147.10 $102.16 44.0% $143.95T-rated $138.21 $123.96 11.5% $137.08

According to a recent Modern Tire Dealer survey of indepen-dent retail and wholesale tire dealers, the average profit margin on a passenger tire is 26.4%. For a light truck tire it falls to 24%. The average wholesale passenger tire sales margin is 12.4%.

Car dealerships vs. quick lubes

Quick lubes accounted for 34% of the installed lubricant business, based on volume, in 2002. According to Kline & Co. Inc. research, full synthetic motor oil accounted for an average of 12% of all oil used at quick lubes, while synthetic

Facts section: Tire sizing and pricing

Start with 205/55R16Then worry about the the other 500-plus sizes

Chart 22TOP U.S. PASSENGER TIRE SIZES, 2013

Replacement (Top 10 = 22.5%)

1. 205/55R16 6. 195/65R15

2. 215/60R16 7. P215/60R16

3. 225/60R16 8. 195/60R15

4. P235/75R15 9. 215/65R16

5. P265/70R17 10. P225/60R16

Chart 23TOP U.S. LIGHT TRUCK TIRE SIZES, 2013

Replacement (Top 10 = 68.9%)

1. LT245/75R16 6. LT285/75R16

2. LT265/75R16 7. LT245/75R17

3. LT265/70R17 8. 31x10.50R15

4. LT225/75R16 9. LT215/85R16

5. LT235/85R16 10. LT285/70R17Source for Charts 21-23: Rubber Manufacturers Association

Chart 21MOST POPULAR DOMESTIC OE PASSENGER AND LT TIRE SIZES

2013 OE P-metric/metric

Size % of total

P215/55R17 6.1%

P265/70R17 4.0%

P275/55R20 3.2%

P275/65R18 3.1%

P215/60R16 3.1%

2012 OE P-metric/metric

Size % of total

P215/55R17 6.1%

P265/70R17 4.4%

P215/60R16 3.8%

P275/65R18 3.4%

P205/65R16 3.1%

2011 OE P-metric/metric

Size % of total

P215/60R16 9.1%

P265/70R17 5.1%

P215/55R17 4.2%

P235/70R16 3.2%

P275/65R18 3.0%

2013 OE light truck (LT)

Size % of total

LT245/75R17 21.9%

LT245/75R16 14.0%

LT225/75R16 11.3%

LT265/70R17 8.9%

LT265/75R18 8.1%

2012 OE light truck (LT)

Size % of total

LT245/75R17 22.1%

LT245/75R16 14.7%

LT225/75R16 11.1%

LT265/70R18 8.1%

LT265/70R17 7.7%

2011 OE light truck (LT)

Size % of total

LT245/75R17 22.3%

LT245/75R16 15.6%

LT225/75R16 11.9%

LT265/70R17 7.8%

LT265/70R18 7.0%

52

10 11

MINDGetting the best value for customers is always top of mind.

WATCHTakes the time to know your business.

BRIEFCASECustomized insurance solutions.

PHONEEasy to reach and ready to help.

HEARTEmbraces our values of respect, passion and excellence.

FEETAlways responsive to your needs.

What sets us apart?

Put a Federated Insurance Risk Services Coordinator to work for you today.

Visit us at www.federated.ca

12

page 1

KNOWING YOURBUSINESS MATTERS

The five best questions to ask in an interview

Barbara Stepic CHRPHR Business Partner Winnipeg

Career Highlights

Barbara Stepic is an HR Business Partner at Federated Insurance.

Joined the company in 1994.

Her articles on human resources topics have appeared in numerous trade magazines across Canada.

Inviting a prospective employee to an interview is easy, the hard part is knowing what to ask them. The best way to make sure you’re ready for the interview is by preparing questions in advance. This allows for relatively consistent interviews that evaluate all candidates fairly based on their resumé. So what questions should you ask?

A quick word on behavioural questions

The most common interview questions are behavioral. Examples include “tell me how you work under pressure” or “have you been involved in a conflict with a co-worker and if so, how did you handle it.” They’re based on the idea that past experience is a good indicator of future behaviour. Behavioural questions aren’t on this list because they tend to vary by sector but it’s important to ask them in addition to traditional, open-ended questions.

Top five questions to ask candidates

1. Tell me about yourself.

This question gives candidates an opportunity to sell themselves and provide insight on how they communicate – a sought after skill in today’s tech-savvy marketplace.

2. Why did you leave your last job?

Candidates who show a pattern of leaving past employers will probably continue to do so. Reasons for

leaving such as pursuing a new challenge or better opportunity are fine but should be confirmed when completing reference checks.

3. What do you know about our business and the position you applied for?

This question must be asked to all candidates. If they don’t know anything about your business then they aren’t interested in working for you. Serious candidates will research your website, industry and truly show interest in the position they’re applying for.

4. What are your strengths and weaknesses?

Look for an answer that supports their work experience. The candidate should explain how they overcame their weaknesses and how their strengths benefit their work.

5. Do you have any questions?

This provides you with an opportunity to assess the candidate’s interest and gives them chance to tell you about planned trips or any other unavailability.

To successfully interview a candidate, you need strong listening skills, an understanding of the position you’re recruiting and the knowledge, skills and abilities you require in an employee. The most important thing, however, is to hire a candidate that’s well suited for your organization.

Happy interviewing, everyone!

by Barbara Stepic, CHRP, HR BUSINESS PARTNER – WINNIPEG | www.federated.ca

13

page 2

© Federated Insurance Company of Canada. All rights reserved.

This document is provided by Federated Insurance Company of Canada (“Federated”) for informational purposes only to augment your own internal safety, compliance and risk management practices, and is not intended as a substitute for assessment or other professional advice by a qualified person or entity. Federated makes no representations or warranties regarding the accuracy or completeness of the information contained in this document. Federated shall not be responsible in any manner for any loss, or any direct, indirect, consequential, special, punitive or other damages, arising out of your, or any other person’s, use or reliance on the information contained in this document.

Barbara Stepic is an HR Business Partner at Federated Insurance, having joined the company in 1994. Her articles on human resources topics have appeared in numerous trade magazines across Canada.

Not just a ‘muscle brand’BGF unveils upgraded UHP g-Force tire line

CHANDLER, Ariz. – Michelin North America Inc.’s BF Goodrich brand has roleld out the g-Force COMP-2 A/S all-season, ultra-high-performance replacement tire line, the successor to its g-Force Super Sport A/S stable of Z-rated tires.

BFG officials tout the COMP-2 A/S as the brand’s “best ultra-high-oerfirnabce all-season ever,” offering improved wet, dry and snow traction and braking performance over leading competitors.

The new line will comprise 59 W and Z-rated sizes, with the first 33 available in April, 24 more between July and October and the final sizes coming out in the first quarter of 2016, the tire maker told report-ers during a recent ride-and-drive event at the Bondurant School of High Performance Driving in Chandler.

The sizes, ranging from 16 to 22 inches in rim diameter, include a four- and six-rib tread pattern, with 70 percent of the volume being offered in the four-rib design. The tire is geared toward American muscle car fitments as well as Asian and European

luxury vehicles and the tuner market, BFGoodrich said, with half of the sizes being new offerings in the auto market.

“We’re no longer just an Amerian muscle brand,” said Marcus Wilson, country operations marketing man-ager, BFGoodrich. “Although that is our heritage, we are offering all of the fitments for the cool vehicles that are popular today.”

The g-Force COMP-2 – produced at Michelin’s Tusca-loosa, Ala., tire plant – replaces the Z-rated sizes in the g-Force Super Sport A/S line, Mr. Wilson said. The Super Sport A/S recently was named a top pick by Consumer Reports Magazine.

H- and V-rated Super Sport sizes will continue to be available until the launch of the next-generation Advantage line in 2016, Mr. Wilson told reporters.

Michelin said the new tire line will offer best-in-class market coverage for Z-rated tires, with 89-percent market coverage overall.

“Since about 2008, consumer purchase behavior has changed top the tune of 70 percent of all UHP purchases in the market are all-season,” he said, citing three key reasons for the change.

“The performance gap between summer and all-season is closing. It’s not closed, but it’s narrowing,” he said.

“Secondly, all-season tires typically offer a treadwear warranty, where summer products do not.

“And third, in some cases, all-season tires are typically pricess less than their summer counterpart.”

The g-Force COMP-2 carries a 45,000-mil limited treadwear warranty, according to BFGoodrich. Average manufacturer sug-gested retail price for the tire will be “162.

The company claims the tire stops up to 15 feet shorter on wet roads and five feet shorter on dry roads than other tires in the category, while offering 15-percent better snow traction than its own Z-rated Super

Sport A/S tire.The tire incorporates BFG’s Performance

Racing Core (PRC) technology – derived directly from the company’s line of competi-tion tires – which it said delivers responsive control during hard cornering in wet, dry and light snow conditions.

Components of PRC include the company’s ETEC System (Equal Tension Containment), Dynamic Suspension System and g-Control Sidewall Inserts, which BFGoodrich said combine to provide a reinforced internal structure that increases traction and control at high speed; added sidewall stiffness to resist deflection for immediate turning response; and ride comfort.

Another key feature is UltiGrip Technol-ogy, a high-silica, cold-weather flexing compound designed with all-season traction in mind. This combined with the tire’s directional tread design and V-shaped, angled lateral and longitudinal grooves work together to optimize rubber-to-road contact for dry grip, while offering efficient water evacuation, the tire maker said.

Lastly, the company has incorporated its g-Force tread technology, featuring advanced mold design and a performance tread profile that BFGoorich said distributes stresses evently across the tire footprint for improved wear vs. the Super Sport A/S Z-rated tires. It also helps to resist irregular wear often associated with direction tread designs, the company said.

Using larged tread blocks gives the tire a more aggressive

BFGoodrich calls the new COMP-2 A/S the brand’s “best ultra-high-performance all-season tire ever.”

continues on page 15

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MTD January 2015

When the Chinese consumer tire tariffs are fully implemented, everyone in the industry will adapt accordingly. They will have to: The tariffs will be

in place for a minimum of five years, and historical precedent makes 10 years a real possibility. They may even become permanent.

Tariffs are a given in 2015. What else can we expect to see that will affect the industry in general and independent tire dealers in particular? Here are three more concerns that may become commonplace in the near future. At the very least, they will be topics of discussion.

1. Truck tire tariffs? Consumer tire shipments from China were up 86% from 2012 to 2014. Over that same period, truck tire shipments from the same country increased 30%; in addition, they represent a greater percentage of their market (35.5%) than Chinese consumer tire imports do (25.7%).

Truck tire pricing is a concern among retreaders. In 2014, the average price differential between a new and retreaded truck tire was a healthy 46.5%. Unfortunately, some low-cost imports skewed the average.

According to Bob Majewski, owner of Sumerel Tire Service Inc. in Newport, Ky., truck tires from China are almost meet-ing retread prices on a cap and casing. He said a low profile 295/75R22.5 import is selling for $178 ($150 plus the Federal Excise Tax) “and they are getting lower. A cap and a casing is more than that. They need a tariff on it.”

Nick Mitchell, senior vice president of research for Northcoast Research Holdings, believes a tariff is a possibility.

“The ITC (International Trade Commission) voted unani-mously in early 2014 to retain the antidumping and counter-vailing duties that were levied against Chinese off-the-road tires in response to a 2008 judgment, despite the fact that Chinese manufacturers are pressing forward with efforts to fight the ruling.

“The odds look good that similar measures will be finalized

against passenger and light truck tires imported from China. “As such, I would not be surprised if the next area of focus is on the TBR tire market. China has the ability to produce nearly 120 million radial truck tires, so it is clearly a force that needs to be monitored.”

When asked if the United Steelworkers (USW) union is looking at petitioning for the implementation of any other tariffs on imported tires, such as on medium truck tires from China, Wayne Ranick, director of communications for USW International, said the union “will not rule anything out. We are always exploring opportunities to pursue trade cases where U.S. jobs are threatened and the security of families is put at risk by unfair trade.”

2. Private equity influence. What do American Tire Distributors Inc., Dealer Tire LLC, BJ’s Wholesale Club Inc. and Titan International Inc. have in common? Private equity firms have a significant stake in all of them. That trend will

continue, based on the steady performance of the tire industry through economic ups and downs.

The influx of cash from private equity firms can change the landscape quickly. Thanks to backing from TPG Capital LP (Tarrant Capital IP LLC), ATD purchased Hercules Tire Holdings LLC and Terry’s Tire Town Holdings Inc. for $655 million.

In 2014, MHR Fund Management LLC made a major move on Titan, increasing the private equity shareholder’s influence over the company. On its website, MHR says it seeks to “exert control or significant influence on its portfolio companies.”

Dealer Tire already has had two investment partners. The minority stake owned by the first, TA Associates, was purchased by the second, Lindsay Goldberg LLC, late last year.

Carlisle Transportation Products was sold to American Industrial Partners. Wheel Pros LLC was acquired by Audax Group Inc. from Platinum Equity LLC.

Most recently, Raben Holdings LLC, which does business as Raben Tire Co. Inc., sold an equity interest to Palladium Equity Partners LLC. President Tom Raben said Palladium “shares our vision of expanding the Raben Tire footprint within our existing markets and into adjacent markets across the U.S.”

3. Eco-friendly tires. Corporate Average Fuel Economy (CAFE) standards setting a 49.6 mpg average fuel-efficiency goal for 2025 almost necessitate eco-friendly or low rolling resistance tires at OE. The aftermarket is a different story, however.

According to Modern Tire Dealer’s 2014 Eco Tire Survey, tire dealers say 7% of their customers ask for environmentally friendly tires. The highest request ratio is, not surprisingly, for hybrid vehicles, followed by sedan owners and electric vehicle owners. When asked if consumers were willing to pay more for eco tires, 61% of the dealers responding to the survey said “no.” ■

Facts section: Future shock

Look for... more tariffs?You never know. The same goes for the fascination

private equity firms have with our industry

Chart 29NEW P-METRIC AND LT TIRE SIZES/SKUS IN 2015

P275/35R15 SL P305/55R20 XL P315/30R20 SL

P235/45R17 XL P245/40R18 XL LT205/70R15 LRC

LT215/65R16 LRD LT255/55R18 LRD LT235/65R17 LRD

LT255/65R17 LRD LT255/65R18 LRE LT375/45R22

LT355/40R22 LT375/40R24 LRF LT225/70R17 LRE

LT265/65R18 LRD LT285/60R18 LRD LT315/70R17 LRC

37x12.50R22LT LRE 35x13.50R20LT LRE 38x13.50R20LT LRESource: Tire & Rim Association

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Bob Bignell: A Lifelong PassionWell known in the industry, this tire professional is making things happen

A few months ago, during the 2014 SEMA Show in Las Vegas, the Tire Industry As-sociation (TIA) recognized one of our fellow Canadians, Bob Bignell, with a leadership award: “In recognition of continuous strong leadership, and in support of industry legislative efforts that positively affect the role of independent tire dealers and the tire industry.”

That may seem like a very long description of Bignell’s achievements, but in fact the award only scratches the surface of what this tire industry professional has achieved during his more than 30 years in the business here in Canada.

Bignell got in the tire business almost by

accident. What was supposed to be “just a job” that would help him make ends meet over 30 years ago, turned into a career, as well as a lifelong passion for the industry.

Many hats

Bignell wears many hats: board member and treasurer of Ontario Tire Stewardship, executive director of both the Ontario Tire Dealers Association and the Tire Dealers Association of Canada, board member of the Tire Industry Association (TIA), and his day job – president of Veritech Mfg. & Wholesale Inc.

Why work so hard? “You can’t just sit back and watch,” Bignell says, as he explains how he and his colleagues are working on bringing tire service training to the colleges. “I don’t know how you don’t do it.”

Recognized for his achievements, Bignell is not about to sit on his laurels and let opportunities pass him by. We can be certain he will be spearheading many more initiatives in the tire industry for years to come.

appearance, BFG said, while wrapping the tread design onto the shoulder creates the visual perception that the tire is wider with a shorter sidewall height. According to the company, the design offers “functional aesthetics,” providing cornering grip in

addition to a more attractive appearance.“We’ve not weighted the importance

of looks versus performance,” Mr. Wilson said. “What we do know is that for our core consumer, which we’re calling the perfor-mance seeker, performance is key. It’s great and it’s awesome that is also looks cool, but it needs to perform.

“That’s wat the BFGoodrich brand overall is built on – it’s built on performance,” he added. “That will always be our lead, and if we’re able to throw in some really cool design cues that resonate with those consumers as well, that’s an additional (bonus). We look to do that, but we lead with performance.”

According to Mr. Wilson, BFG’s market-ing efforts for the new tire will include a number of ways to engage both consumers and dealers.

“What’s key for us is to educate our dealers and the counter salespeople because we found that they’re a very critical and influential resource to consumers when making their buying decisions,” Mr. Wilson said. “ If we can showcase to them and make it very clear how our products performs versus the competition, we think that will help them make the right recommenda-tions for the consumer.”

The firm’s “Are you driver enough?” national tour, which kicked off this month, will include ride-and-drive events in 20 markets across the U.S. through August.

The tour will feature the g-Force COMP-2

A/S and the All-Terrain T/A KO2 tire, which BFGoodrich launched in 12 sizes last fall. The firm added 10 tire sizes to that line in March and another six in April.

In addition, BFGoodrich is looking at spiff opportunities for counter salespeople.

On the consumer end, the tire will be an eligible product in three upcoming national promotions for 2015, Mr. Wilson said. The company also is seeking to engage consumers online, via its own website and those of its dealers.

“We’ve gathered from our research that a significant portion of (consumer) research and a significant amount of time is spent online during the buying process,” Mr. Wilson said. “So we need to engage them in that way. We’ve also learned from our research that consumers spend more time on a dealer’s website versus a manufacturer’s website.”

As part of its marketing efforts, Michelin is pushing out g-Force COMP-2 promotional videos to its dealers to share on their web-sites and through social media platforms.

While Mr. Wilson did not provide sales forecasts estimates for the tire, he noted the company hopes the product is successful “to the point where we have to add capacity.”

To reach this reporter: wschertz@crain.com; 330-865-6148; Twitter: @Will_Schertz

Marcus Wilson, country operations marketing manager for Michelin’s BFGoodrich brand, said performance is key for the brand’s core consumer.

Not just a ‘muscle brand’ BGF unveils upgraded UHP g-Force tire line

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PARTNERS IN PREVENTION · PARTNERS IN PREVENTION · PARTNERS IN PREVENTION · PARTNERS

Red Flags That May Protect You From Frauds, Scams, or Tricks

Not only are frauds, scams, or tricks increasing, but they are still successful.

Because so many are targeted if only a small percentage respond, a lot of money can be lost and futures ruined. Anyone can fall for these scams from young to old, from high school education to master degrees, and from naïve to worldly.

There are a variety of scams currently circulating; from the Nigerian money scam, to identity theft, to charity scams, to being defrauded of money or property. There is a long list of red flags that point out a potential issue. However, the old adage is always the best one to start with: “If it sounds too good to be true, then it probably is.”

Here are 15 red flags, more can be found on the websites provided later.

Customer is contacting you (often on behalf • of “a relative who lives in the country”) but they are located overseas

E-mails are filled with spelling, punctuation • and grammatical errors

Customer is “ready to make an offer” after • only one or two brief e-mails

Customer is NOT asking the type of basic • questions that your sales staff are used to hearing from leads

The individual is not willing to consider using • your preferred freight carrier, but insists on using their own

Any offer to transfer a substantial percentage • of a large sum of money into your account in return for your “discretion” or “confidentiality”

Requests for signed and stamped blank • letterhead or invoices, or for bank account information

Requests for an urgent air shipment, • accompanied by an instrument of payment whose genuineness cannot immediately be established

Solicitation letters or e-mails claiming that • the soliciting party has personal ties to senior government officials

Requests for advance payment in U.S. dollars • for transfer taxes or incorporation fees

Statements that your name was provided to • the soliciting party either by someone you do not know or by a “reliable contact”

Promises of advance payment for services • to be provided to the government. You have the right to check out any caller by requesting written information, a call back number, references and time to think over the offer

The caller is more excited than you are. • Crooks want to get you excited about this “opportunity” so that you won’t be able to think clearly

LP-153 Ed. 05-2010

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PARTNERS IN PREVENTION · PARTNERS IN PREVENTION · PARTNERS IN PREVENTION · PARTNERS

Criminals love finding out if you’re lonely and • willing to talk. Once they know that, they’ll try to convince you that they are your friend – after all, we don’t normally suspect our friends of being crooks

Some victims report receiving five or more • calls a day, wearing down their resistance. Once a person has succumbed to this ruthless fraud, their name and number will likely go on a “list”, which is sold from one crook to another

In the end, if you have any doubts about the phone call or email, your best defense is to simply hang up or delete the email.

For more information, here are two good websites: http://www.rcmp-grc.gc.ca/scams-fraudes/index-eng.htm or http://www.phonebusters.com/english/index.html.

Partners In PreventionAt Federated Insurance, we believe Loss Prevention is a critical component of your Risk Management Program. Your Risk Services Coordinator, together with our Loss Prevention Team, is available to assist you in developing security measures appropriate for your business. Working together to reduce your loss exposures protects your bottom line!

For more information, contact your Risk Services Coordinator, our Loss Prevention Department at 1-800-665-1934, or visit our website at www.federated.ca

Federated Insurance provides this Loss Prevention Bulletin as a service to our policyholders and their business advisors. The information provided is intended to be general in nature, and may not apply in your province. The advice of independent legal or other business advisors should be obtained in developing forms and procedures for your business. The recommendations in this bulletin are designed to reduce the risk of loss, but should not be construed as eliminating any risk or loss.

PARTNERS IN PREVENTION · PARTNERS IN PREVENTION · PARTNERS IN PREVENTION · PARTNERS

Criminals love finding out if you’re lonely and • willing to talk. Once they know that, they’ll try to convince you that they are your friend – after all, we don’t normally suspect our friends of being crooks

Some victims report receiving five or more • calls a day, wearing down their resistance. Once a person has succumbed to this ruthless fraud, their name and number will likely go on a “list”, which is sold from one crook to another

In the end, if you have any doubts about the phone call or email, your best defense is to simply hang up or delete the email.

For more information, here are two good websites: http://www.rcmp-grc.gc.ca/scams-fraudes/index-eng.htm or http://www.phonebusters.com/english/index.html.

Partners In PreventionAt Federated Insurance, we believe Loss Prevention is a critical component of your Risk Management Program. Your Risk Services Coordinator, together with our Loss Prevention Team, is available to assist you in developing security measures appropriate for your business. Working together to reduce your loss exposures protects your bottom line!

For more information, contact your Risk Services Coordinator, our Loss Prevention Department at 1-800-665-1934, or visit our website at www.federated.ca

Federated Insurance provides this Loss Prevention Bulletin as a service to our policyholders and their business advisors. The information provided is intended to be general in nature, and may not apply in your province. The advice of independent legal or other business advisors should be obtained in developing forms and procedures for your business. The recommendations in this bulletin are designed to reduce the risk of loss, but should not be construed as eliminating any risk or loss.

TRAC Reminds Canadians to Check Tire Pressure

Two thirds of Canadian drivers (69 percent) do not check tire pressures monthly.

As part of “Be Tire Smart Week,” the Tire and Rubber Association of Canada (TRAC) is reminding all Canadians to pay attention to their tire pressure. TRAC would also like all tire professionals in Canada to spread the word about the importance of regularly checking tire pressure.

According to TRAC, only a third of Canadian motorists (31 per cent) measure their tire pressures monthly. The three most common reasons for not measuring tire pressures monthly include the false belief that pressures only need to be checked when tires look low (31 per cent among those who do not check inflation monthly); reliance on a Tire Pressure Monitoring System (23 per cent), and not knowing they should check their tire pressures monthly (21 per cent).

The research also found that almost half of Canadian drivers (45 per cent) do not know where to find the correct inflation pressure for their vehicle. Almost a third of survey respondents (31 per cent) say they inflate to the air pressure stamped on the tire’s sidewall. Additionally, 65 per cent were unaware that pressures should only be checked when tires are cold.

“Today’s technically advanced tires offer drivers unprecedented performance and dependability,” says Glenn Maidment,

president of The Tire and Rubber Association of Canada. “Taking five minutes each month to measure and, if necessary, adjust your tire pressures to the recommended level safeguards optimal tire performance, safety and fuel economy.”

It’s time to spread the news.

BY JACK KAZMIERSKI • MAY 13, 2015

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