Firestone treads carefully

Press, 24 February 1978, Page 13

Firestone treads carefully

“It is as yet unclear what effect the Government’s recent relaxation of the regulations covering new car [sales will have on local [assemblies,” the chairman of Firestone New Zealand, Ltd, (Mr C. W. Campbell) said at

jhe annua! meeting in I Christchurch. [ “The assembly plants ran [into increasing problems to- ' ward the end of last year, [with the result that 61,824 [new car sales represented [the lowest level since 1969. “There has, however, been ! a stronger demand for ret- [ rends as new tyre prices have risen, but production In i this area has been limited bv the availability of sound casings.

“Surveys carried out by Firestone ' indicated that motorists were tending to run their tyres past the legal 1/16 inch minimum skid depth,” said Mr Campbell.

The company was able to recover increased costs under the Price Control Regulations category “B” except for the three months price freeze, but the absorption of incurred costs during this period adversely affected profit, which rose 11 per cent in the year to October 31.

“With continued inflation of about 15 per cent Firestone was unable to generate sufficient cash-flow to finance planned capital expenditures or the higher receivables and inventories, and it was necessary to borrow an additional S2.BM. “Plans are well in hand for the re-financing of term loans falling due in March, and for cash requirements for the rest of this financial year.

“Forecasts of petrol consumption for 1978 indicate similar overall usage as in 1977, which should mean industry tyre and retread replacement sales will be about the same,” said Mr Campbell.

Firestone is upgrading the equipment and production facilities in its retread shops, and has recently produced the first New Zealand steel belted radial car tyre.

The publicly listed Firestone notes will convert to ordinary shares in August, which will be listed on the stock exchange in September.