TORONTO, (Feb. 21, 2005) — Some trailer OEMs aren’t asking for the wheel to be reinvented — just enough tires to dress the ones they have would be nice.

A few trailer makers are grumbling, both privately and publicly, that their tire suppliers have told them there’s not enough rubber to go around. What is available is earmarked for specific, larger orders, meaning trailer companies don’t have anything extra to play with, and some carriers and owner-ops aren’t getting what they’re used to spec’ing.

The stories — a mix of anecdotes and perhaps a dash of urban legend — are bountiful. One has a tire supplier telling the trailer OEM to take its entire 2005 order now or get nothing; while still another tale describes how tire company X tells trailer company Y that they’ll be cut off in six months. Period.

As Today’s Trucking has reported extensively in recent months, parts and component suppliers — tiremakers included — are at full capacity, and the appetite of other foreign markets for raw materials is driving North American manufacturing costs higher, taxing the ability of assembly lines to ramp up, and squeezing availability for the end user.

“We have seen a very high increase in demand for tires in the aftermarket and in the OE market,” says Clark Johnson, commercial OE account executive for Bridgestone Firestone. “Like other parts and component suppliers, we have experienced heavy cost increases for the raw material. Natural rubber has increased dramatically over the past few years, and the cost of crude oil affects our manufacturing costs, not to mention the cost of steel and other things.”

Bridgestone’s North American plants are operating at full capacity, and Johnson admits it’s getting hard for the industry to keep up. “It’s nice to be able to sell everything you make, but it’s not easy to be able to make everything you could sell.”

Still, while tiremakers acknowledge that global raw-material demand is squeezing supply in our own backyard, most deny a widespread problem exists.

Don’t tell that to Manac Canada President Charles Dutil, the only one of several trailer OEM officials that agreed to comment. “Absolutely,” said Dutil when asked if his Quebec-based company is experiencing difficulties getting tires. And he’s got some fightin’ words for those who insist it all has to do with manufacturing capacity.

“When a tiremaker says ‘I’m limiting my sales to you, but if you need tires here are the names of some of our distributors, you can get them there,’ it’s not because they run out of tires, it’s because they want to re-focus their sales through their distribution network instead of selling direct to OEs,” he says without hesitation. “Tire makers were probably overcommitted to OEs for a while and they realize today they were not maximizing their margins this way. They have a better margin in selling to distributors instead of OEs.”

That theory is quickly brushed off by Michelin North America Marketing Manager Ralph Beaveridge. While some tiremakers may be fed up with trailer and truck manufacturers buying tires at OEM prices and then putting them out on the market, Beaveridge denies any systematic attempt, with Michelin at least, to eliminate that trade channel or restrict availability.

“What is happening really is not a big mystery,” he says. “We build our inventories, plan our production, and manage our costs based on our forecasts. Now the market in 2004 was up over 20 per cent versus what we forecast. To increase tire production over what the current capacity is, takes two to three years of advanced notice. You can’t just flip a switch.”

Beaveridge maintains that Michelin has not had a problem fulfilling its customers’ orders over the last year, although he admits that an overnight boost for some customers isn’t going to happen. “I can’t say that if they ask for two extra tires they won’t get them. What I’m saying is if we weren’t a primary supplier and they’re buying, say, 20 tires a month, and now come to us and ask for 150, well, the bottom line is, no, we’re not in a position to do that,” Beaveridge says.

“Can we send 24 instead of 20? Chances are we could if they’re available. But we have planned our production based on the demand shared with our customers in advance.”

Asked if some trailer OEs are now paying for lack of loyalty to the tiremakers over the years, Dutil became slightly annoyed. “I cannot comment for other trailer manufacturers, but Manac for the last 10 years bought 80 per cent of the tires we installed from one main supplier,” he says. “We changed our suppliers in 2003, but overall Manac is very loyal to its suppliers.”