TORONTO, Ont. - Teamwork between manufacturers, vendors and fleets could be the deciding factor that will pull each through possible rougher economic times.John Rice, executive vice-president of Miche...
TORONTO, Ont. – Teamwork between manufacturers, vendors and fleets could be the deciding factor that will pull each through possible rougher economic times.
John Rice, executive vice-president of Michelin North America, elaborated on this theme during his speech to delegates at the 38th Annual Canadian Fleet Maintenance Seminar (CFMS) in Toronto. His speech was timely as the theme of this year’s CFMS, which ran from Apr. 30 to May 2, was built around the topic, “Manufacturers and Fleets: Teamwork in Motion”.
Rice began his presentation with an overview of the history of tire giant Michelin, and showed an ad from the company’s early days that included the expression, “nunc est bibendum.” Roughly translated this means, “now is the time to drink.”
Today, said Rice, that phrase could very well equate to ‘now is the time for partnerships and teamwork,’ especially with the threat of an economic slowdown hanging over the country.
“The year 2001 will be tough compared to 1999 and 2000, but compared to the rest of the world Canada won’t be so badly off. Canada is expected to have a softer landing and may even be able to experience a better recovery,” he says.
Rice explains that the U.S. will have experienced the most significant fall, but it’s more a case of the higher they climb, the harder they fall. Consumer confidence today, he adds, only appears lower in relation to history, and is still at a healthy level, and the Canadian dollar’s record low of US$0.64 should actually be positive for exports.
On the transportation side, there will be growth, he insists, but there is some question as to whether it will be positive.
Especially considering that for each one cent rise in diesel costs, a fleet’s profitability goes down by one half cent, he says.
“But the trucking industry has never been profitable compared to some other industries. Truck OEM’s now are seeing orders down by 75 per cent and cancellations have tripled. Only the fleets that are certain are ordering trucks now,” says Rice. The OE tire market also went down 20 per cent in one year, said Rice.
“The good news is that tires are built to be more and more specific to the needs of fleets than ever before, and proper tire selection is the key to lower operational costs for fleets. So to avoid becoming a casualty, fleets should develop teamwork and partnerships with your key suppliers,” says Rice. n
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