Michelin countersues Bandag

GREENVILLE, S.C. (Nov. 29, 1999) — The U.S.-based divisions of Michelin are counter-suing Bandag Inc., accusing the company of trying to lock them out of the retread market in North America.

In September, Bandag filed suit against Michelin Retread Technologies and Michelin North America alleging that the companies misappropriated trade secrets, spread false rumors about Bandag, engaged in predatory pricing, and pressured Bandag dealers to convert to Michelin’s retreading system.

Michelin claims Bandag has “engaged in exclusionary conduct” to keep its monopoly position in the retread tire business. It alleges that Bandag has used highly restrictive long-term franchise agreements that prohibit franchisees from using other retread processes, acquired commercial truck tire dealers to prevent them from converting to Michelin’s system, and offered substantial financial incentives for dealers not to convert to the Michelin system.

Michelin has asked the court to award it damages, prohibit Bandag from enforcing the illegal terms of its franchise agreements, and to immediately dismiss most of Bandag’s claims filed in its lawsuit.

“It’s illogical and incorrect to allege that Michelin is attempting to monopolize the retreading market,” said John Rice, chief operating officer for Michelin Americas Truck Tires. “We have only 30 retread locations compared to Bandag’s more than 400 locations. We are merely a new entrant in a market long monopolized by Bandag.”