[DeTomaso] DON'T Smoke'em if you got'em!

michael@michaelshortt.com michaelsavga at gmail.com
Mon Jun 27 11:49:43 EDT 2011


Looks like everybody else is catching up to our dilemma

Michael Shortt

  The scramble for scarce tires
------------------------------

<http://autoweek.com/storyimage/CW/20110627/CARNEWS/110629894/AR/tires-getting-scarce.jpg>
 *Uniroyal*
Tire manufacturers are raising prices amidst a shortage of popular tire
sizes.

 By DAVID SEDGWICK AND MIKE COLIAS, on 6/27/2011

Related Articles

North American automakers are struggling with a nagging shortage of tires,
caused in part by tire plant closings and rising demand for low-volume
specialty tires.

Automakers are paying much higher prices -- double-digit percentage
increases from a year ago -- as tire makers gain pricing power.

"We have been bombarded from every side for additional tires, and we can't
keep up," said David O'Donnell, Continental Tire's vice president of
original equipment in the Americas. "We are at maximum capacity, and all
shifts are maxed out."

The shortage doesn't appear to have significantly crimped production plans,
though automakers are scrambling to secure supplies. Earlier this year, Dan
Knott, Chrysler Group's senior vice president of purchasing and supplier
quality, said the company was short of premium tires for some nameplates.

"The tire shortage will not clear up over the next year," Knott predicted.
"It's going to take awhile."

Automakers pay as little as $75 per tire for low-end models to as much as
$300 or more for high-performance tires.

To meet demand, Continental will expand plants in Illinois and Brazil and
will build a factory somewhere in North America. But this will take time.
The new lines in Illinois and Brazil won't hit full production until 2013,
O'Donnell said.

Continental is investing $224 million to expand its plant in Mount Vernon,
Ill., plus $210 million to expand its plant in Camacari, Brazil.

Other tire makers also are maxed out. Michelin is running its North American
plants at full capacity, although it has met some requests for more tires,
Vice President Rob Murray said in a recent interview.

The shortages come at a time when demand is rising. According to a forecast
by consulting firm IHS Automotive, automakers in the United States and
Canada will buy 62 million tires for new vehicles this year.

That's up from 55 million tires in 2010. By 2016, North American demand for
original equipment tires will rise to 79 million units, IHS estimates.

Fewer tire factories


Read more:
http://www.autoweek.com/article/20110627/CARNEWS/110629894#ixzz1QUYl9BaR

-- 







Michael L. Shortt
Savannah, Georgia
www.michaelshortt.com
michael at michaelshortt.com
912-232-9390


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