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How tire manufacturers are responding to Covid-19

March 22nd, 2020 | by Tire Review
How tire manufacturers are responding to Covid-19

Tire manufacturers explain how their businesses – production, operations and distribution – have been affected by the coronavirus.

As the coronavirus continues to spread, Tire Review reached out to tire manufacturers to see how their companies are responding to this global pandemic and the economic challenges that have come with it.

Scroll below to see how manufacturers are currently responding to the coronavirus outbreak. Yokohama Tire Corp., Kumho Tire USA and Sumitomo Tire North America declined to respond at this time.

Apollo Vredestein
Apollo Tyres said in a statement March 23 that it is scaling back production in its European plants in Hungary and the Netherlands, in addition to taking measures to protect its workforce in line with government health advisory and measures.

“Coronavirus has largely impacted our production and distribution across the tire industry,” the statement says. “The production for passenger car tires in the Netherlands will cease as of Friday, March 27, initially for a two-week period. As there is a strong need for agricultural tires across Europe, the production of certain critical tire sizes will continue to support this demand, but under strict measures and only in line with local health advisory.”

The company’s Hungary plant is due to be shut down March 28 for a two-week period. Plans to fully reopen both plants will be announced as the company continues to evaluate the market conditions and health and safety of its employees. Apollo Vredestein’s sales and distribution channels remain open under strict precautions to ensure the safety of its employees, the company said.

On March 20, the Apollo Tyres Leadership Team announced they would take a voluntary reduction in pay due to the impact of COVID-19 on the automotive industry. Onkar S. Kanwar, chairman and managing director, and the Neeraj Kanwar, vice chairman and MD, will reduce their salary by 25%. The company’s senior management team has also taken a voluntary reduction in their salary by 15% “in a show of solidarity due to the rapidly deteriorating market conditions caused by the COVID-19 pandemic,” a press release from Apollo says.

Bridgestone Americas, Inc.
Bridgestone Americas announced March 19 a temporary phased shutdown of its manufacturing facilities in North America and Latin America, slated to start March 21. The company said it plans to resume normal operations on or before Sunday, April 12 and monitor the situation closely to adjust its plans as necessary.

The company says it has a sufficient supply of product to meet customer demand and its distribution centers, plant warehouses and logistics teams will continue to fill orders, but is executing this temporary shutdown to align supply to the predicted demand in the market.

Rachel Withers, director of communications, Bridgestone Americas, Inc., issued the following statement on behalf of Bridgestone Americas:

“Our most important priority is to ensure the well-being and safety of our employees and the integrity of our operations. We are continuing to monitor advice from the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO), as well as government regulations in countries where our teammates work and travel to update our global response plans.

“At this time, we’ve had no significant impact to our global supply of product to customers. We are continuing to monitor the supply situation daily and taking additional steps such as, but not limited to, securing additional supply and capacity as needed. Cross-functional teams throughout our global operations are meeting regularly to assess the impacts to the regions in which we operate as well as mitigate any potential impacts to our supply chain.

“We are also working very closely with our OE customers around the world to assess their needs and taking appropriate action to ensure business continuity. As they continue to make decisions on their global production and supply needs, we will make adjustments, as necessary.

“In addition, we also continue to assess the impact to our retail stores and our teammates providing service to our retail customers. As this situation continues to rapidly evolve on a global basis, it is still premature to speculate on short- and long-term impact to our overall business performance.”

CMA/Double Coin
With the global outbreak of COVID-19, Tim L. Phillips, vice president of marketing and operations, said in a statement that CMA/Double Coin has implemented a word-from-home policy for staff able to do so.

He said the company’s seven North American warehouse facilities will remain open and are operational.

“We do not have any slowdown of direct container shipments coming into the country from our Thailand plant. Additionally, we have put in place safe practice measures for all of our facilities as recommended by the CDC,” he said. “We greatly appreciate our team and the loyalty of our customers, and we look forward to the end of this global crisis.”

Continental Tire the Americas
In a statement to Tire Review, Continental Tire the Americas, LLC, said the following:

“Since the outbreak of the coronavirus, our main focus has been on the health of our employees, customers and, in addition, on maintaining our supply chains. We are in frequent communication with our direct customers to monitor this uncertain situation and to manage supply with the most accurate information. We are also continuing to review our supply chains and are working closely with our suppliers to minimize any disruptions. Currently, our ability to supply passenger, light truck, and TBR tires to our customers in North America is not impacted as a result of the situation.

“Continental has business continuity plans to be put in place in the event of a pandemic, which are put into action on a case-by-case basis. These plans were already successfully implemented during the swine flu pandemic in 2009.

“For the protection of our employees and in response to the production adjustments of our customers, we are gradually adapting production in our plants around the world in coordination with our customers and suppliers. In North America, as of today, all tire plants are operating normally. However, the situation remains highly dynamic.”

Cooper Tire & Rubber Co.
Cooper Tire & Rubber Co. says it will temporarily shut down its tire manufacturing facilities in the United States, Mexico and Europe to protect the health and safety of employees and respond to market demand that has been impacted by the coronavirus.

The process of phasing down production at its U.S. plants began March 21 and will proceed on a rolling schedule over the coming week, with facilities expected to be closed for two to three weeks. Phasing down production at Cooper’s European plants, located in Melksham, England and Kruševac, Serbia, will begin in the coming days, and each facility is expected to be closed for at least three weeks, the company said. Cooper will continue to closely monitor the situation and adjust timelines as necessary.

Cooper’s plants in China, which reopened several weeks ago and have continued to ramp up production, remain in operation.

Cooper said it is also closely monitoring supply chain and product inventory levels as it focuses on continuing to serve customers. The company says it believes it currently has a sufficient supply of products and will continue to operate distribution centers until further notice to meet customer needs.

As the coronavirus has continued to spread across the globe, Cooper has put in place measures to protect employees and meet the needs of all stakeholders including travel restrictions, remote working, social distancing, additional cleaning and disinfecting of facilities, limited visitor access and other necessary steps, which all remain in effect.

Goodyear Tire & Rubber Co.
In a statement to Tire Review, Goodyear Tire & Rubber Co. said the following:

“During this unprecedented and extremely fluid situation, Goodyear’s top priorities are the health and wellbeing of our associates and service to our customers. We are closely monitoring both inventory levels and supply of raw materials and have optimized our warehouse and distribution operations to continue delivery of Goodyear products.

“All associates who are able to perform their roles remotely have been encouraged to work from home through the end of March, and manufacturing plants in Europe and the Americas have begun a temporary shutdown of operations.

“For Goodyear facilities that continue to operate, we have put in place preventative measures to help protect associates and reduce the overall spread of COVID-19, including additional cleaning and availability of sanitizing products; limiting visitors to business-critical guests only; and practicing appropriate social distancing.

“We can’t comment on any potential business implications beyond an expected impact on first-quarter sales.”

Hankook Tire
While Hankook Tire America Corp. is currently open and operating, a Hankook spokesperson said the company expects that coronavirus will impact business in some capacity, but it’s too soon to tell how.

“As the impact of coronavirus continues to evolve, we may have to reassess our U.S. plant operations,” Hankook says. “Our Nashville headquarters is currently telecommuting and for our manufacturing facilities, we’ve added preventative measures such as additional sanitization of workspaces in order to help minimize and mitigate risks. Our first priority is to keep our employees safe.”

Hankook said it is in constant communication with its employees, stakeholders and partners to update them on current events and any business impacts due to COVID-19. A Hankook spokesperson said currently all of the company’s plants, including those in China, are operating in normal order around the world.

As a Hankook policy, all employees and partners have postponed any unnecessary travel, the spokesperson said. For employees and partners who travel for personal reasons, the company has asked that they self-quarantine for two weeks as outlined by the Centers for Disease Control (CDC). Hankook said it is also “working on a number of strategies to enhance e-commerce in light of the current situation and are evaluating and adjusting plant activities as needed through the second quarter.”

“Currently there is a lot of unknown, and it depends on what happens as events unfold in the United States over the next three to four weeks,” a Hankook spokesperson said in a statement. “Hankook facilities are connected worldwide, and we are ready to step in where we are needed to support the facilities if they need our help. We are already seeing automotive manufacturing plants shutting down worldwide, so we would expect a fall-off in OE demand. It’s a difficult time for everyone right now and we hope that the economic conditions will begin to recover in the second half of 2020. Meanwhile, we will take strategies to secure profitability given the decline in the prices of raw materials.”

Michelin North America
Michelin North America, Inc., will begin a temporary, phased shutdown of some of its tire production facilities in the United States and Canada due to the effects of the coronavirus

The company said the phased suspension of some manufacturing will begin immediately and, based on the current outlook, will last for at least two weeks. The affected production currently excludes vital and critical tires for the country’s economic continuity. Distribution and logistics activities will continue to support customers through existing inventories, Michelin says.

The company said it will continue to follow all guidelines and directions from state, local or provincial governments, with the goal of limiting the spread of the virus.

“While we are facing some supply chain disruption, our components, semi-finishes and products are still able to circulate,” the company says.
As the situation changes we will make adjustments to our production accordingly. It is still too early to assess any possible impact this situation could have on our industry long-term.”

The Michelin Group said in a statement released March 19 that global passenger car and light truck tire markets are down 9% year-on-year and the truck tire market is down 16%, according to Michelin market data as of the end of February 2020.

The Group is taking “all the measures required to safeguard the health of its employees” and has decided to close its production facilities in the European countries most affected by COVID-19 for at least one week, the statement said. The Group said its guidance for 2020 will also be revised due to the economic effects of the COVID-19 crisis.

Nexen Tire America
John Hagan, executive vice president of sales at Nexen Tire America, said that Nexen is not experiencing any manufacturing delays, but the company will follow the global demand.

“As of today, March 20, we are limiting physical interactions as much as possible in order to follow our company and customers’ policies on visitations and meetings. That being said, we are able to practice social distancing while still being available to our customers via telephone, video conferencing and other means via technology. Our dealer meeting has been postponed, motorsports events such as Formula Drift, Hot Import Nights and off-road events have all been either postponed or canceled, and consumer events such as Man City Cup and FCA Spring Fest have been postponed.

“We will help [our tire dealer and distributor customers] in any way feasible. We understand it’s a very difficult time, and we will manage together and get through. Our sales team is constantly talking to our customers and ensuring we are always available for conversations.

“We’re still analyzing the impact of this situation, but there is no doubt about it, these are dire situations. With non-essential businesses closing everywhere and people staying home, purchasing tires is not a priority for many Americans. We will continue to monitor the situation, just as we all are, be there for our customers and neighbors and take it all day-by-day.”

Nokian Tyres
In a statement on its website, Nokian Tyres said it has temporarily suspended all business travel and asked employees not to have face-to-face meetings. The company has also moved to remote work in all the roles possible.

Wes Boling, marketing communications manager for Nokian Tyres, said the company’s Dayton, Tennessee factory remains open, but the company has taken measures such as social distancing throughout the production processes, travel and visitor restrictions and enhanced cleaning protocols, to protect employees. It has also instituted extreme screening measures, rotating lunches, and modified employee entrances and exits to minimize the volume of people in shared spaces. Tire production remains stable and supply hasn’t been impacted, Boling said.

Nokian Tyres PLC said it has postponed the expansion for additional capacity at its U.S. plant as it continues to ramp up production. At its plant in Russia, Nokian announced March 23 that it will be adjusting production output in line with global demand in a flexible way. Construction work on its new testing center in Spain has been ceased temporarily.

As of March 18, Nokian Tyres PLC entered into two weeks of employee cooperation negotiations to determine whether some Finland-based employees may be subject to temporary layoffs, due to decreased demand in the European car and tire market as a result of the COVID-19 outbreak. The company said it will provide updates about affected employees after those two weeks of negotiations conclude.

Nokian Tyres PLC said it is tracking updates from global health organizations and following guidelines issued by local governments. The company has also issued self-quarantine rules to employees traveling internationally in high outbreak areas, asking them to stay self-quarantined for 14 days after returning.

“Currently, Nokian Tyres raw material supply chain is not impacted by the corona outbreak. We have taken extra risk management measures to mitigate the risk in the supply chain. So far, all our raw materials suppliers operate as normal. However, we do expect delays in transportations due to the blank sailings, but we do have safety stocks that cover the delays, so they do not put our production at risk. We also have back-up suppliers. We are following the situation actively and updating the status as it develops.”

Pirelli & C. SpA
Pirelli announced March 20 that it will reduce operations at its tire production plant in Rome, Georgia, starting March 22, in an effort to protect the health and safety of its workers amid the spread of the COVID-19.

The company has halted production temporarily at its plants in Settimo Torinese and Bollate, Italy, as well as at its plant in the U.K. and in Romania.

In a statement to Tire Review, Pirelli said it is currently evaluating the global situation and “defining measures to mitigate its effects on the business.”

The company said for health safety reasons, compounded by the economic impacts of the coronavirus health crisis, it has slowed down production in a number of factories and temporarily halted it in others so that they can run with fewer employees and safe distances can be ensured, in a context of weakening demand.

To maintain safety, Pirelli has moved all interaction between dealers, carmakers and other clients onto digital communication platforms and providing training on these platforms. The company said it has also canceled some events and postponed product launches, which will be done “when possible and compatibly with the evolution of the health crisis and the slowdown of the market.”

“Pirelli is doing everything it can under the circumstances, while keeping health and safety as its priority, to ensure that dealers and distributors continue to receive the best service possible and continue to receive our products,” Pirelli says.

Toyo Tire USA Corp.
Roy Bromfield, president and CEO of Toyo Tire U.S.A. Corp., said Toyo’s office and field staff is working remotely and avoiding travel in response to precautions taken around the coronavirus.

“In addition, on March 17, we were informed factories in Malaysia will close March 18, until the end of the month,” he said. “This aligns with announcements made by the Malaysian government. We do receive some products from Malaysia but fortunately, we have several manufacturing facilities around the world supplying tires to the U.S. market. Our customers can expect direct communication from us as we all navigate these uncharted waters.”

The company’s distribution center in Ontario, California remains open and fully operational. Toyo Tires’ business operations fall within the exemption for federal critical infrastructure sectors referenced in California Governor Newsom’s “Stay at Home” Order, issued March 19.

Toyo’s distribution centers, including its Ontario, California center that receives tires from both domestic and overseas manufacturing and distributes them across the country, will remain open.

Triangle Tire
Four Triangle Tire manufacturing plants are now operating near full capacity after a three-week shutdown due to the Chinese New Year and subsequent coronavirus shutdown, said Manny Cicero, CEO of Triangle Tire USA.

“With much uncertainty about how the coronavirus pandemic will affect global tire production, we are grateful that the four Triangle plants are now operating at above 90% capacity,” said Manny Cicero, CEO of Triangle Tire USA. “Our main concern remains the health and welfare of all Triangle team members worldwide and that of our customers’ employees and families. We are thankful, nevertheless, that our production is up and running.”

Cicero said there are numerous containers of Triangle tires headed to the U.S. from China, and the Triangle logistics department is navigating obstacles created by the worldwide coronavirus pandemic. He said Triangle Tire USA staff is working from home, and the company has suspended one-on-one customer meetings for the time being.

In the tire industry as a whole, Cicero said: “On the supply side, more and more tire plants in North America and Europe are shutting down. Depending on how long that lasts, supply could become a big issue.

“On the demand side, consumers will be driving less and projects requiring OTR tires may likely be curtailed,” he continued. “On the TBR side, trucking will continue to play an important role of delivering products across the land. Trucking could be impacted down the road if the manufacturing of consumer goods slows down.

“All in all, this is a very challenging situation for the tire industry. There are thousands of great folks in the tire industry, and we just all need to pull together to help each other.”

Article courtesy of: Tire Review

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