Firestone sees some obstacles ahead

Press, 19 February 1983, Page 20

Firestone sees some obstacles ahead

"Although 1982 was a successful year for our company. it was also a year when many things happened that are cause for concern," said the chairman of Firestone NZ. Ltd. Mr R. L Deal, told the company's annual general meeting. One factor causing concern was the increasing number of imported tyres being allowed into New Zealand (about 10 per cent of the replacement market).

Mr Deal suggested that this problem might be intensified by the Industries Development Commissions report on the tyre industry, which recommended even greater competition.

"The uncertainties surrounding the IDC report made long-range planning impossible. There are all kinds of rumours of a shake-up in the tyre industry.”

Mr Deal said that Firestone had made its views known to the IDC, all government departments, and a number of members of Parliament. It was hoped the

Government's position regarding the tyre industry would soon be known, to allow positive plans to be made for the future. Firestone had also made submissions to the IDC study of the vehicle assembly industry. “Since we are major suppliers of tyres to the assembly industry it is very important to us that a strong, viable, assembly industry remains in New Zealand.

“We need the assembly plants to help us to keep up our factory volume, to allow us the benefits of longer production runs and to bring in new tyre sizes and types for new cars today that will be the replacement tyres of tomorrow."

Last year had seen record sales and earnings, but the company faced major obstacles this year, he said. The C.E.R.- agreement was another cause of concern for Firestone, but with tyres being on the deferred list, the expected new, but as yet unknown, competition would not be evident for a number

of years. Mr Deal said that although 1983 would be a very difficult year, he was optimistic that Firestone would maintain its position in the industry. He said that the directors were carefully watching and evaluating operating costs and the amount of working capital required to maintain the present level of busines. “We have set inventory objectives which are economical yet realistic. This, of course, means that if the level of tyre sales drops, the level of factory production will also be adjusted. We cannot afford to carry any excess inventory.” The factory modernization programme, started in 1981. was for all practical purposed completed.

“We are now in a position to produce all our tyres with this modern equipment, using the latest technology and being cost-competitive.” Mr Deal said improved relations between management and employees, with no major industrial stoppages last year, were also beneficial.