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Tuesday, February 7, 2012

Tire Rant

My day job is in the tire wholesale industry in the middle of the United States.  Today's post is a rant about Tires.  Specifically, two areas, the Tariff's imposed by President Obama on Chinese Import tires, and the worker's lock out at the Cooper Tire Plant in Findley, Ohio.
It just so happens that both of these have a direct link to the United Steel Workers Union!
The first year in office it was brought before President Obama to impose a 30% Tariff on Chinese import tires.  It was argued that this would stop the influx of cheap tires from coming into America which was supposedly hurting the American Economy and therefore hurting the Unions.  This same proposal was brought before the previous President and President Bush refused to enact this particular tariff.
I believe and stand behind the belief that we do need some tariffs against Chinese goods coming into this country but not in regards to tires or auto parts!  The automobile industry, which includes tires, has become and is a Global industry.  The parts needed to build an automobile come from all over the world.  Major Tire Manufacturers are Global Companies, with plants located all over the world.  What most people don't know is that many of the tires that are made in China inexpensively are made in tire plants using OLD U.S. tire molds!  We sold this old outdated equipment to the Chinese to build the tires that are used to replace tires on old 1970's and early 80's model cars.  Because of these same Unions who are kicking a fuss about cheap Chinese tires it was cost prohibitive to make old tire sizes with a declining market for them in the United States.
Major tire manufacturers are building the newer more improved tires in current tire sizes to fit the more recent models of cars which is predominately what is being driven in the United States and European countries.  People might have noticed that tires sizes have been changing!  They have been getting bigger since the mid 90's.  When is the last time you drove a car that had 75 series tires on it?  That is if you even know what a 75 series tire is.  The United Steel Workers are hurting the tire industry as a whole and costing Americans more money to get older sized tires.  American companies don't have the molds and would be retarded to retool current factories to manufacturer out dated sizes.  We buy them from the Chinese because they are cheap and they own the molds and have the equipment to build these particular sizes for a decreasing market.
This tariff was originally set at 30% to decrease over three years and drop off 2/3 of the way through 2012.  The damage has been done.  Tire prices went through the roof all the way through 2011 because of Super Speculators screwing with the supply and demand of natural rubber and the rising cost of petroleum products.   The tariff imposed three years ago by President Obama raised the price of what would have been cheap late model tire designs.  These sizes couldn't be produced and supplied by the USW or American based tire manufacturers.  If anything it only benefited the Mexican, South American and other Asian countries that were able to introduce their tire brands into American markets.  In many cases American companies just had to suck it up, buy the Chinese tires and raise the prices yet again because that's all that was available.  You couldn't get those sizes of tires anywhere else!
The President has the option in the original tariff agreement to extend the tariff year by year from here on out or let it drop off.  In order to further pacify the USW and keep their support it is fully expected that he will re-up the tariff for one more year!  If you have an older late model car when you go get new tires on it you can thank our President and the USW for the much higher price you have to pay for that tire.  Guaranteed it won't be made in America!  To stay competitive Major tire manufacturers have moved on to stay up with current technology and automobile tire sizes!  Plus almost every major tire manufacturer and many smaller ones are GLOBAL COMPANIES!  Plants all over the world, including the United States!
Secondly, for those who didn't know Cooper Tire, the last solely American Made Tire Company, in Findley, Ohio, has been forced to start building tires elsewhere and they have locked out the Union Workers from their Findley, Ohio plant since around last November!  American Companies cannot afford to keep kowtowing to Unions and passing the increased prices on to customers through their products and stay competitive in the world economy!  If this continues our economy will collapse, our manufacturing base will collapse, and so will our bankrupt broken government!
The country will continue if the government collapses!  It just means others will have to step in and try and manage where the previous elected leaders have failed.  If our companies fail, and our economy collapses there won't be anything for a government to govern!  It will just be people promising to take care of you with no means of fulfilling the promises.
Several years ago Titan Wheel Company wanted to change wheel sizes and aspect ratios of the tire and wheel combinations for farm and industrial equipment.  Unless tire companies followed suit it wouldn't work.  So Titan Wheel bought Armstrong Tire in order to make tires for the new wheels they wanted to make.  At that time Armstrong Tires was as famous as John Deere or Caterpillar; it was the name in Farm and Industrial Tires and had been for years.  As soon as Titan Tire bought the plant the Unions raised their ugly heads and asked for more stuff or they would strike.
The owner of Titan Wheels and New Owner of Armstrong, which they changed to Titan Tire, drove up, shut down and locked the tire plant up!  Titan Tire lost millions in sales and production for the US!  They didn't build a tire for a year and half!  What a way to start your new venture.  They broke the Union!  Titan Tire today is a world leader in farm and industrial tires.  They just signed a three year 100M dollar agreement to supply the Caterpillar Company with tires for their equipment.  This stunt by the unions in the name of helping the worker caused a tire shortage in Industrial tires that the world is just now starting to recover from.  Not to mention that during the time Titan Tire wasn't producing tires it opened a flood gate for foreign tire manufacturers to bring their tires into the country to supply the need for American equipment.
I hope and pray for everybody who has ever loved the phrase "Made in America," that Cooper Tire either breaks the Union or cuts a deal with the USW that will allow them to be competitive and keep building tires IN AMERICA!  Unfortunately if the Union wins it will be another kick in balls for American manufacturing and another step towards the demise of American Industry!
In a stroke of utter futility the USW took their misguided pleas and wants and protested 150 retail tire dealerships on January 14th of this year.  Let me see if I have this right!  Their plan was to interrupt the business and protest tire dealerships because of their disagreement with Cooper Tire Manufacturing, and then ask and expect these same dealers to support them!  Are they insane?  Yes, we want to picket your business and protest and then ask for your support to go against the very companies that make the products you sell for a living!  The USW better wake the hell up and sniff what it's shoveling?  If Cooper Tire is forced to make an agreement that makes them more uncompetitive in the world market it will be further forced to ship jobs out of the country.  Tires will have to be made somewhere else where they can be manufactured at a competitive price.  Where will the USW be when there are no more American manufacturers?
Times are tough all over the world.  Americans need to tighten their belts and get tough to stay in the game.  For over twenty years American manufacturing has been on a decline and the rise of manufacturing in other parts of the world have increased as a direct result.  If we can't maintain our manufacturing base in this country we can't maintain this country!  The Unions had their place in our countries history.  Unfortunately they have grown fat and incompetent along with aspects of our Federal Government.  The fight for the future of jobs in America is with the Unions and the Federal Government over stepping their bounds and inflicting themselves into American Companies and American Business. 
Amen!  May God Bless You and Cooper Tire!  Hang in there guys, America is counting on you!


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