Need more reasons to take better care of your tires?

Need more reasons to take better care of your tires?

Here are some that will get your attention.

By Lori Lovely
"This is a crisis that affects everyone,” Kevin Rohwling, senior vice president of education and technical services for the Tire Industry Association, says of the global tire shortage. “Demand far outweighs capacity, and no one has excess supply.”

This phenomenon, which began in 2003, has “shocked the market,” according to Continental General Tire Off-the-Road (OTR) Field Manager Cara Junkins, who predicts the production shortfall to last an additional 18 to 24 months. “It caught everyone off guard,” Gary Nash, director of OTR sales for Yokohama Tires, reflects. “We’re behind in production about 10 months, with heavy back-orders. In 40 years in the tire business, I’ve never seen anything like this.” Prashant Prabhu, president of Michelin Earthmover Worldwide, adds, “This demand is unprecedented in the history of the industry and was unanticipated by the industry.”

Andrea Berryman, Goodyear’s global marketing manager for OTR tires, says her company’s plants are “full-out globally,” with no open capacity. “Every single tire is allocated.” She doesn’t see any relief from this crisis until late 2007, possibly 2008. “There’s simply an unprecedented level of demand, with the mining and construction industries, the military, and OE all cycling high at the same time.” She warns that 2006 will be a tougher year for tires than this year has been, because the reserves that manufacturers relied on to get through 2004 are nearly gone.

“Skyrocketing demand for OTR tires has resulted in a strain on tire supplies globally,” says Rob Mills, manager of marketing services with Bridgestone/Firestone Off Road Tire Co. “This heightened demand is expected to continue for several years, and our customers are projecting this growth trend to continue beyond the historical cycle of a four- to six-year period.”

While the off-road business has historically documented peaks and valleys, a convergence of events combined to create a global shortage that’s putting the squeeze on the construction and mining industries, according to Nash. “In 2003 inventories were at an all-time low,” he explains. “Business had been slow for five years, so instead of a normal five- to six-month supply, we were down to a three- or four-month supply.”

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Motors are running but there's no rubber to burn!

Motors are running but there's no rubber to burn
By Nick Hanson
njhanson@stcloudtimes.com


Although most Central Minnesotans probably don't know it, there is a worldwide shortage of off-road tires.
The heavy-duty tires commonly known as OTRs are mostly used on construction vehicles.

A similar shortage isn't evident for tires on passenger vehicles, but local construction companies, tire suppliers and some other businesses are all feeling the impact.

If it continues, the shortage has potential to delay area construction projects and put a dent in profits for local construction businesses.

For Sauk Rapids-based concrete and asphalt construction company Bauerly Brothers, the situation already has started to take a toll.

"The prices for the tires have gone up considerably and they are hard to get," said Jake Bauerly, president of Bauerly Construction Companies. Bauerly Construction employs about 800 people and owns about 75 machines that use OTRs.

The severity of the situation is best described by a situation at Bauerly's earlier this year: An engine in one of Bauerly's loading vehicles failed.

But Bauerly workers mitigated the loss by salvaging the tires from the broken machine and transferring them to one that sat unused because of a lack of tires.

"We're functioning," Bauerly said of his company. "But it's a big pain."

What's happening


The shortage of OTRs is credited to a number of factors, said Mark Merchlewicz, marketing manager of Royal Tire in St. Cloud. There is unprecedented demand for OTRs in countries such as China, Russia and India, Merchlewicz said.

The spike is mainly a result of a worldwide increase in demand for minerals such as coal, iron ore, copper, nickel and bauxite. Mining them requires heavy construction machinery.

There is no matching increase in OTR manufacturing. The shortage is a classic case of supply and demand, Merchlewicz said.

"The tires are in high demand, yet the supplies are limited," he said. "An OTR tire could easily be (cost) $4,000 and could go way up from there."

In turn, construction companies are faced with two problems. They can't afford the higher cost of money needed for new OTR tires, and even if they could, many suppliers are out of stock.

So, how is a supplier like Royal Tire dealing with the problem?

"We have worked pretty diligently on creative ways to deal with our customers," Merchlewicz said.

Royal has focused its efforts on retreading old tires and developing new methods.

"We have a state-of-the-art facility for OTR retreading," he said. "We are able to cap some of those tires and we often have used tires available."

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