A decade ago, a dozen major tire manufacturers, half of them American, vied for world leadership. Today, just six giant companies, one in the process of formation, are dominant. The only one based in America is the Goodyear Tire and Rubber Company. Consolidation has come about because of slackening demand and global competition. With long-lasting radials accounting for 93 percent of new tires, motorists buy fewer replacements. Weak demand has forced companies to invade one another's territories. And as the auto industry becomes more global, auto makers favor huge tire companies that can fill their needs anywhere.
In the last five years, foreign companies have bought out most of the best-known American labels, including Firestone and Armstrong. The agreement five months ago by Groupe Michelin of France to buy the Uniroyal Goodrich Tire Company will create the world's largest tire maker - if, as expected, American antitrust regulators approve. In the United States, aside from Goodyear, only the smaller Cooper Tire Company remains independent.
Goodyear, the leader for decades, is contending for second place with the Bridgestone Corporation of Japan, which two years ago bought Firestone. Next come West German Continental A.G., which bought General Tire; Pirelli S.p.A. of Italy (Armstrong), and the Sumitomo Tire and Rubber Company of Japan (Dunlop). Two smaller Japanese makers, the Yokohama Rubber Company and the Toyo Tire and Rubber Company, are both concentrated in the Far East.
Consolidation has intensified competition to cut production costs and increase quality. The industry has become surprisingly high-tech, spending more than $1 billion on research and development last year, up by one-third from five years ago.
The Research
Now It's Microchips Instead of Road Tests
At Goodyear's vast research and development center in Akron, the rubber meets the microchip before it meets the road. Rows of technicians at computer work stations design tires. They test them with programs that seem like video games. On screen, cars whip through courses with potholes, ice slicks and hairpin turns. A decade ago, designing a tire for a new automobile model required testing 200 to 300 tires. Today, it takes about 65. ''In the last few years, tire designing has moved from an empirical art to a science, because of the computer,'' said F. Vincent Prus, Goodyear's executive vice president for research and development.
The major tire companies are spending freely on research and development. They are buying computers to test tire durability, traction, fuel efficiency, compatibility with new car designs and even noise. Analysts consider Goodyear the research leader. The company spent $300 million on research and development last year, or 3.5 percent of revenues - up from 2.5 percent five years ago.
Companies are also using research to cut costs, especially for original equipment, the tires that auto makers buy for new cars. Although original equipment sales account for just a quarter of production, nearly 70 percent of consumers replace their tires with the brand that came with the car. Since auto companies want a distinctive tire design for each new model, tire makers are striving to develop lines more quickly. Goodyear says computer-aided design helped cut development time from 117 weeks in 1980 to 65 weeks last year. The goal: 20 to 25 weeks by 1995.
The Chemistry
Exotic Synthetics Mean More Mileage
Tire company executives say the public believes their jobs are no more complicated than pouring molten rubber into molds. ''Outside of the industry, I don't think anyone really understands how much effort goes into making a tire,'' said Frederic J. Kovac, Goodyear's vice president for technology. Tires are actually built, not molded, from a combination of natural and synthetic rubber wrapped around polyester and steel.
Rubber chemistry has become much more complex since the day 151 years ago when Charles Goodyear invented strong, vulcanized rubber by accidentally dropping sulfur and crude rubber onto his stove. Tire company chemists now stir up exotic synthetic rubbers to improve traction on wet streets without sacrificing fuel efficiency.
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