Top Retreaders Are 'Building for the Future'
They See Opportunity Ahead
For many retreaders, 2020 wasn’t a year to invest in major expansion. As Michael Berra Jr., president of Community Tire Co. in St. Louis, Mo., put it, “2020 was a survival year.”
But for Jim Parkhouse, 2020 turned out to be the year he opened a new Bandag plant. “Timing is everything,” says Parkhouse, CEO at Parkhouse Tire Inc. “It took us three years from the time we bought the property and went through all the permitting. California is difficult to build anything.”
And construction turned out to be even more difficult than usual in 2020 due to COVID-19. Parkhouse says at one point, the electricians on the job were infected with the virus and couldn’t work for two weeks. With that and some other delays, the plant, with a capacity of 800 to 1,000 truck tires a day, began production on December 14. The company’s original timeline called for a Sept. 1 start.
The Fontana, Calif., plant replaces a smaller one across the street. The older plant kept producing until the new one was operational. Its structure will be used to expand a commercial service center, says Parkhouse. The new retread facility increases Parkhouse Tire’s capacity by 600 units.
“We’re building for the future. We felt like we needed more production. With the cost of land in California, it’s better to do it with bigger facilities than it is with small ones. We rolled the dice and here we are.”
With the construction work behind him, Parkhouse says he’s facing another hurdle when looking at long-term growth.
“We’re trying to build a larger crew. It does take time. People don’t want to work right now. Our government has made it too easy for people. It’s very difficult to find people. That’s the biggest hurdle to growing.”
Bruce Chamblee, chief operating officer at Dorsey Tire Co. Inc., agrees that labor issues are presenting a significant burden.
“We have always had challenges finding staff members. However, since COVID-19 entered the world, we have felt an even more significant strain on finding staff members,” he says.
“We are not getting the number of applications we were before COVID-19. The ones who do apply often will not return phone calls or emails to schedule interviews. The ones who do schedule interviews — only 50% show up to the interview, and of those, we can only hire 50%.”
The issue is compounded by new hires who start work, but don’t stop looking for other job opportunities, says Chamblee. If they find something where they can earn more, “they leave with no notice or explanation.
“At the same time this is happening, you are trying not to overwork your current staff and keep them from becoming disgruntled because of the lack of staff to help perform the work.”
And eventually, Chamblee says it becomes noticeable to customers, because you can’t provide the level of service they need and should receive.
Fred Schmidgall, president at Morton Supplies Inc., describes 2020 as “a tough year.” Even when there was opportunity, personnel issues held the retreader back.
“Demand was good. However, finding workers was nearly impossible.”
With trucking services in demand and fleets on the road throughout the pandemic, Schmidgall had hoped to capitalize with more retread business. But he says that “one seemed to offset the other, so we had essentially no change.”
In Grand Rapids, Mich., when Jose Rojas, plant manager for MTI Retreading Co. Inc., was trying to add a second shift, it was nearly impossible to find workers when the company was offering to pay $12 an hour. “It’s hard to find people to work second shift.”
After the company boosted hourly pay to $15 for that second shift, it made hiring a bit easier.
“After that, we finally got a good group,” Rojas says.
H&H Industries Inc. President Noah Hickman says his company’s greatest opportunity for growth continues to be building partnerships with service providers and end users. “We’re also offering long-term, web-based customer inventory information, in- voicing, analysis reports and end-user specific data” for customers, “so they don’t have to.”
Investing in Facilities and Equipment
While Parkhouse Tire may have been alone in building a new retread plant during the pandemic, a new BestDrive LLC plant opened just as the nation was shutting down due to the coronavirus.
Continental Tire the Americas LLC opened a new “mega plant” in Forest Park, Ga., replacing another facility on the same site that the company acquired six years ago when it bought Hill Tire Co.
Sonny Simpson, managing director of BestDrive, says the new plant opened in March 2020 and has a capacity of 330 retreads a day. In 2021, the company plans to add more equipment to boost capacity to 450 truck tire retreads daily.
“We see continued demand for (Continental) retreads in this region,” he says.
Bridgestone Americas Tire Operations LLC also expanded its capacity in 2020. Josh Holland, vice president of operations for Bridgestone’s GCR Tires & Service business, says capacity was added at two retread plants, though the company declined to name which ones. “And we are planning for additional capacity expansions in 2021.”
Notably, GCR didn’t add to or sell off any of its assets after it sold 19 stores to Pomp’s Tire Service Inc. in January 2020. The previous year, GCR had sold nine retread plants and 59 stores in two separate deals with Southern Tire Mart LLC and McCarthy Tire Service Co. Inc.
Holland says, “GCR Tires & Service has not entered into any agreements to acquire or sell any part of our operation in 2020. We remain focused on strengthening operations at our 72 GCR Tires & Service stores and 15 retread plants in the U.S. and Canada.”
H&H Industries Inc. purchased a full line of OTR tire precure molds that had been part of the Continuum line.
Noah Hickman, president at H&H Industries, says the molds will supplement the company’s existing line and ultimately, will be consolidated into a new product line, NeXus.
“This will be for our own precure retreads, as well as retread rubber for sale to other OTR retread manufacturers.”
H&H Industries also installed a TRM Eagle cutter and buffer, which Hickman says is “the first of its kind in the nation.”
At Community Tire Co., Berra says the company bought a new truck buffer, an OTR buffer and several molds and presses.
“These are to handle some increase in post office business, but mainly updating older equipment.”
Syracuse Retreaders bought a Goodyear UniCircle machine and is in the midst of a construction project, says Dennis Beaudette, company vice president.
“We are currently adding a new, state-of-the-art, 40,000-square-foot building attached to our headquarters,” says Beaudette, noting the space will increase Syracuse Retreaders’ production “to its highest level.”
Demand for the company’s retreads grew in 2020, in part due to the unusual year in the trucking industry, Beaudette says, and also because of shortages of new tire supplies after tiremakers shut down their factories last spring.
“We have seen an uptick in the retreading business due to (plant shutdowns.) However, we are still seeing rubber backorder issues on the retreading end, too.”
In addition to their production facilities, retreaders also made moves in their related commercial service centers.
John Ziegler Jr. says Ziegler Tire & Supply Co. added four commercial centers in 2020, including two in Kentucky — Bowling Green and Greenville — and two in Indiana — Evansville and Jeffersonville.
Maine Commercial Tire Co. closed a “cramped” location in Augusta and relocated it 22 miles away in Waterville, Maine. President Jim McCurdy says the facility is a former Ryder terminal and is much larger than the previous space this location occupied.
McCurdy says Maine Commercial Tire had its “best year in the history of the company, with an increase in both revenue and gross profit.”
McCarthy Tire Service Co. Inc. consolidated two commercial locations into one last summer. The company’s commercial tire store in Bensalem, Pa., moved into a former Gallagher Tire building and then weeks later, McCarthy moved its industrial tire operation from Philadelphia to the Levittown, Pa., location. The company also closed and sold two retail stores. Neil Horn, vice president of operations for McCarthy Tire Service, says the dealership did add one commercial location — a commercial store in Norton, Va., that it acquired from Southern Tire Mart LLC. The location handles OTR, industrial and commercial tire sales and service.
Beasley Tire Service’s plant is in its fourth full year of operation, and President Bob Beasley said, “We made a large initial investment in retread plant capacity that would carry us through the first five years.”
Making Moves in 2020
Even in the unusual environment of 2020, retreaders proved there was room to grow through acquisitions.
Ahead of the damage caused by COVID- 19, in January 2020, Dorsey Tire purchased Gibson Tire Service, a Marangoni retreader, in Charleston, S.C. That deal came just months after Dorsey Tire bought Dublin Tire Co. in September 2019 in Dublin, Ga.
In the midst of the pandemic Pomp’s Tire Service Inc. in May acquired Tire Associates, based in Mankato, Minn., with additional locations in Cedar Rapids, Iowa, and Alexandria, Minn.
Also in May, Jack’s Tire & Oil Inc. com- pleted its merger with A&E Tire Inc., giving the new company six retread plants, plus five additional locations. The entities are doing business under their original names and operate under the umbrella of Jack’s Tire & Oil Management Co. Inc.
In July, Service Tire Truck Centers Inc. (STTC) acquired three Pennsylvania-based commercial locations and a Michelin Retread Technologies (MRT) plant from Highlands Tire & Service. The Highlands retread facility in Carlisle, Pa., was one of the first MRT plants in North America.
Walt Dealtrey, STTC CEO and president, says his company is investing in the plant by upgrading equipment and expanding its capacity.
STTC also has relocated another one of its facilities into a new, 40,000-square-foot building with expanded mechanical capacity. Dealtrey says he has “plans for a few more (investments) in 2021.”
The year ended with Border Tire LLC buying Canyon Tire Sales, a $45 million commercial tire dealership with five locations and a Michelin retread plant in southern California.
Border Tire says the deal made it the largest servicing Michelin retreader in the state of California.
Justin Cogdill, managing director at Border Tire, says the company also added a new chamber and builder in its Fontana, Calif., retread plant during the third quarter of 2020.
El Paso,Texas-based BorderTire made major acquisitions in California in 2018 and again at the end of 2020, when the dealership purchased Canyon Tire Sales, a $45 million commercial tire operation. Both deals included a Michelin retread plant. Justin Cogdill, Border Tire’s managing director, says the company also added a new chamber and builder at its Fontana, Calif., plant during the third quarter of 2020. First shift employees at the company’s Fontana plant, pictured here, are ready for work.
Off to a Hot Start in 2021
If 2020 was the year for many retreaders to hunker down and survive, 2021 is already shaping up to be a year of some big moves. In January, Purcell Tire & Rubber Co. made big back-to-back announcements. First, the longtime Goodyear retreader joined the MRT and Oliver retreading networks. And secondly, the company said it had closed 2020 by acquiring Quality Tire Co., which had three retread plants already using the MRT and Oliver systems.
In March, BestDrive sold six of its commercial locations, including a retread plant near Dallas, Texas, to Conlan Tire LLC. Tom Fanning, head of Continental’s U.S. market for truck tires, noted “this sale is not indicative of any plan” by Continental “to exit the retail business.”
Conlan Tire now has 25 locations, including three retread plants, in six states. Also in March, Wonderland Tire Co. Inc. announced it had acquired the three retread plants owned and operated by Sumerel Tire Service Inc. The two dealerships had been longtime associates.
After Sumerel Tire trademarked the AcuTread retread process in 1994, Wonderland Tire eventually implemented the process at its plant in Michigan. Later, the dealers were part of a group that formed the AcuTread Alliance Group.
Sumerel Tire Service’s Bob Majewski says the deal “is a marriage of like-minded cultures and people who know each other and share in a common commit- ment to quality products, our customers and employees.
“We manufacture and sell identical re- manufactured AcuTread tires, as well as the same new tire brands, so this combination will provide increased scale and geographic reach in the competitive and continually evolving tire market.”
Majewski will consult and serve as technical director to Wonderland Tire, which now has two of the largest AcuTread plants and an overall capacity to produce more than 137,000 retreads a year across four plants.
Don Mead, CEO of Callaghan Tire Inc., says the Bradenton, Fla.-based tire dealership has its eye on acquisition opportunities.
“We are actively investigating select, targeted acquisitions in 2021. Our focus in 2020 was the same as it has been for the last few years — understanding where we make money and where we don’t — then directing our efforts and investments in the geographic markets, end user segments, products and brands that drive that profit.”
Mead says Callaghan Tire’s “primary opportunity remains expansion into a hand- ful of key markets in our area that we are not serving.” But there’s also room to grow by expanding the company’s service and sales capacities, though that is dependent on finding the right people for those jobs. “Talent in these areas was hard to find before the pandemic and is even more challenging now,” he says.
Tredroc Tire Services Inc. is among those retreaders looking ahead to more growth. CEO Larry Jeffries says there were no capacity changes in 2020, but Tredroc is planning “an expansion in one of our markets to increase capacity. If everything goes according to plan, it should take place in the first quarter of 2022.”