Year closing on positive signs

The recovery so far of the U.S. economy from the so-called "Great Recession" has been described as slow, sluggish, anemic.

Consumers are less than enthusiastic about current economic conditions and are keeping a close eye on their budgets.

The top headlines of 2011 in the tire industry, however, reveal a different picture. Tire companies are investing at unprecedented rates in expanding their capacities, including a handful of new plants.

Tire retailers and wholesalers, as well, are buying up outlets and expanding into new markets, although a portion of their spending is considered consolidation rather than outright growth.

Overall, most businesses involved in the U.S. tire market are reporting improved sales and profits.

Tire makers that once were looking overseas for production are now viewing the U.S. with renewed interest. Consider the plans that have been announced just this year.

Continental Tire the Americas L.L.C. will build a $500 million passenger and light truck tire plant in South Carolina and is spending $224 million to expand capacity at its Mount Vernon, Ill., passenger and light truck tire factory.

Bridgestone Americas is investing nearly $1.5 billion to build a radial OTR tire plant in South Carolina and expand capacity at its Warren County, Tenn., truck tire and Aiken, S.C., consumer tire plants as well as a steel cord facility in Clarksville, Tenn.

Michelin North America Inc. is boosting capacity at its Lexington, S.C., and Woodburn, Ind., passenger/light truck tire plants, and Cooper Tire & Rubber Co. has been upgrading its Tupelo, Miss., car tire plant.

Marangoni Tread North America Inc. is adding capacity at its tread rubber plant in Madison, Tenn.

These capital investments mean more American jobs as well as additional potential tire sales as these companies also try to address fill rate shortages in the retail market.

New vehicle sales are increasing at a slow pace, which means skittish consumers will be visiting tire dealerships and repair shops more often to maintain their aging vehicles for the foreseeable future.

What does this all mean? From afar, the U.S. economy is on a slow climb to regain its pre-recession stability, though that may be several years off.

From a close-up view of the tire industry, investments and expansions are happening at a feverish pace as tire companies prepare and position themselves for that inevitable recovery.

All these factors indicate a positive vision for the North American tire industry, even though the business is somewhat slow, at least for now.

http://tirebusiness.com/

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