OTR tire shortage could last until 2008
The on-going large OTR supply shortage presents both good and bad news. The good news: Mines and other operations that depend on OTR tires are learning how to squeeze more hours out of the tires they are currently running.
The bad news: Supply in 2006 will be worse than 2005. In fact, one OTR tire manufacturer doesn't expect a significant letup until 2008! That's a long time to wait, say OTR tire dealers. Mines will soon begin parking machines if they can't get replacement tires, says Al Chicago, senior vice president of Purcell Tire & Rubber Co.
"It's hand to mouth. Customers don't know what to do. They have equipment they want to buy, but where are they going to get tires?"
"We manage tires for 80 different customers," says Britt Johnson, co-owner of D&D Tire in Fernley, Nev. "It's frustrating when you're just scraping by in getting the tires you need."
"It sounds a bit cliche-ish, but this really is the perfect storm," says Shawn Rasey, executive director, North American OTR sales, Bridgestone/Firestone Off-Road Products.
"All of the material prices are up: Coal is up, copper is at record highs, gold is up near record highs, the aggregate industry is at record levels. "We've had disasters in the Gulf Coast that required lots of mobile equipment for clean-up and reconstruction.
"And then we have two separate engagements going on in Afghanistan and Iraq where the military (is placing) additional orders. All of these things hit at the same time.
"It's not an issue of supply being cut back. I think there is probably more supply than there's ever been. But nobody anticipated growth in all of these things at the same time."
Bridgestone announced production increases at its OTR plants in Japan last year. "But everything is so specialized (in large OTR)," says Rasey. "The equipment is bigger, the molds are bigger, you have longer lead times -- it adds to the complexity." Other tire manufacturers report they are doing what they can to put more tires in circulation. Jack Fenner, director of NAFTA, OTR replacement sales, for Continental Tire North America Inc. (CTNA), says CTNA's OTR plant in Bryan, Ohio, is running at full throttle.
"Our plants are maximized in their production," says Tim Good, manager, global accounts, off-road tires, for Goodyear Tire & Rubber Co. Goodyear makes OTR tires in Topeka, Kan., and also in Luxembourg and Japan. (Most of the Goodyear OTR tires sold in the U.S. are produced in Topeka.)
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