The Tire Crisis No One Wants To Talk About
In this November 2025 episode of Around the Bead, hosts Joe Pahanic and John Holsey cover key trends and challenges in the tire industry across trucking, mining, agriculture, and fleet operations. They discuss legislation affecting retreads, the evolving market for tier one, two, and three tires, shifts in fleet purchasing patterns, and the impact of tariffs on tire pricing and supply chains. The hosts also explore financial pressures on major manufacturers, dealers, and fleets, emphasizing the importance of value, maintenance, and operational efficiency. Throughout, they balance technical insight with practical takeaways for fleet managers and commercial tire buyers.
🔧 Topics Covered:
HR House Bill 3401: tax credits for retreads and industry implications
Retread market trends and automation impact on jobs
Financial performance of major tire manufacturers (Michelin, Goodyear, Bridgestone, Continental)
Freight market influence on tire demand and fleet decisions
Shifts in tier one, two, and three tire adoption
Role of maintenance in cost-per-mile and tire performance
ATD distribution strategy and tier two/three market expansion
FS591 vs. FS592 steer tires: mileage, pricing, and value proposition
Consumer vs. fleet purchasing behaviors and price sensitivity
Tariffs and import volatility: effects on agricultural, medium truck, and light truck tires
Operational challenges for manufacturers and dealers due to tariffs
Broader implications of mining and aggregate sectors on infrastructure
Show Notes:
Episode: The Tire Crisis No One Wants To Talk About
Host: Joseph, John Holsey
Runtime: 49 minutes
Summary: The tire industry is shifting fast and this month’s news might be the biggest shakeup yet. In this episode we dig into the retread tax credit bill (HR 3401), why fleets and dealers barely know it exists, and how it could reshape profitability for retread shops, manufacturers, and commercial tire dealers. We break down the freight recession’s impact on Goodyear, Michelin, Bridgestone, and Continental, along with why some carriers are thriving while others are disappearing. Joe and John also explore whether fleets are shifting permanently toward tier-2 and tier-3 products, and how ATD’s newest brand additions signal a major distribution strategy pivot. From the FS591 → FS592 steer tire evolution, to the true cost-per-mile argument, to the 25% baseline tariffs now hitting all medium truck tires — this episode covers the real issues affecting trucking, OTR, agriculture, distribution, and commercial tire profitability. If you want fleet-focused tire talk that’s honest, informed, and unfiltered, this is your monthly breakdown!
What You'll Learn:
How legislative changes could affect retread pricing and fleet economics
Why automation is changing the retread workforce
How freight market pressures influence tire choices and fleet purchasing patterns
The importance of tiered tire strategy: choosing between cost, value, and performance
How maintenance impacts tire lifespan and overall fleet savings
How tariffs and import policies create volatility for manufacturers, distributors, and fleets
Insights into the evolving distribution strategies of companies like ATD
Key differences in fleet vs. consumer decision-making for tire purchases
Links:
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Transcript:
00:00:05
Around the bead podcast, tire talk for trucking, [music] mining, agriculture, and more. Your home for fleet solutions. Aiming to inform, pioneer, [music] and entertain the tire world in connected industries. Sponsored by [music] East Bay Tire, keeping essential industries moving forward. Good day and welcome back to Around the Bead. I am Joe Pahanic and I'm joined with my co-host John Holsey. We've got a our November 2025 news episode and we're going to get right to it. John, you ready to kick the tires?
00:00:46
>> Let's get to kicking. >> Okay, so HR House of Representatives 3401, yes or no? True or false? Did you know about this 48 hours ago? I did not know about it, but I've done a little bit of research since then and [laughter] and it's it's you're you're laughing is probably the right reaction. >> So, retreading is a is a topic that nobody wants to talk about, but is is a factor in our industry. Um, and there is a bill that is being pushed through the House of Representatives to provide a
00:01:20
$30 tax credit or up to 30% of the price of the retread to a fleet >> for a threeear span. >> Thank you. >> Yeah. >> Um, and uh, nobody in the industry is talking about it. >> Probably nobody knows about it. I certainly didn't. And I I try to stay up on things. Um, if you didn't tell tell me, I wouldn't have known um 48 hours ago. >> Well, it's not it's not the fleets pushing it, right? Because we would we all deal with fleets, right? Um, it's
00:01:51
not big fleets. It's not small fleet. There's nobody out there saying, "Yeah, let's go let's go get some retread money from the government. Um, it's not from tire dealers." >> You know, it's it's funny. You know, it's um the the thing that stuck out most to me was we're doing this to save [clears throat] jobs. We're doing this to keep the the retread shops employed. And my first thought was that's BS. That's Um the reality is every
00:02:21
retreader is probably looking at fully automated shops in the future, which is going to eliminate probably half of the, you know, the employee um base out there. Um the reality is they should just call it what it is. We need to be more profitable. >> Yeah. Yeah. The the retread is dropping at 3 to 4% annually with no end in sight. >> Yeah. >> Um and there's a lot of reasons for that and that's probably for another pod, but you're you're exactly right is the the
00:02:49
goals within the industry is to reduce headcount at a plant by 30 to 40% initially. Um with 50% being the long-term goal. Um, [clears throat] it's hard to imagine this bill getting passed with literally no support from any of the industry's infrastructure, but you never know. I mean, politics has a funny way. [laughter] >> Yes, it does. I I I I tend to think it will get passed because politics has a funny way. >> Yeah. >> Um, you know, I I look at and I go, you know, who's really driving this bill?
00:03:24
>> You know, it's um is it the the retreaders ourselves? Is it the major manufacturers? Is it Bridgestone, Goodyear, Continental, uh Michelin? Um who's who's really driving it and what's the what's the true reasoning behind it? >> Well, a majority of the industry is not driving it. It's not fleet driven. Um if the bill passes, retread pricing is going to go up $30 or 30%. >> Absolutely. That's that's my first thought is, you know, for for years we've talked about retreaders strugg
00:03:55
struggling to make money. Um, in fact, if there wasn't, you know, subsidies from manufacturers or or backside money or discounts behind the scenes, they'd probably all lose money. Um, is this the first step of reducing some of that um to pass some price increases on not only to the retreader, but to the fleets to compensate for the $30? At the end of the day, I don't believe there's going to be any fleet saving money in the long run. >> Uh, not a fleet or a retreader. It's
00:04:21
it's going to be rubber manufacturer where the big gain is. >> Yeah. Um, [clears throat] everybody else will be in the same boat. >> Yeah. All right. U, let's let's move on from that. Uh, I got some headlines that do kind of tailor to this. Um, coming from some of the trade magazines out there. Goodyear financial wos continue. Uh, Michelin blames North American sales for earnings drop. Um, uh, that coupled with I I I follow freight waves. You follow freight waves >> a little bit. Yeah. Yeah, I like Freight
00:04:55
Waves and Freight Caviar. Freight Caviar is the the brokers. >> Yeah. >> Um it cracks me up. Uh they're talking about double brokering and and dealing with uh trucking companies and they have a a pretty humorous viewpoint on it. >> Oh yeah. >> But uh freight waves uh it it shows when I when I look at on a day-to-day basis, it shows basically winners and losers. And there are a lot of losers in freight and transport right now. The market sucks. >> It's tough. It's tough. It's brutal. Um,
00:05:25
there are some winners out there like JB Hunt is uh out there beating their earnings expectation. Um, but undoubtedly I guess my my question is when it comes to freight and you hear that those trade magazine publications about Goodyear's performance, Michelin's performance, tire manu major manufacturer tire performance. Is there a tire industry issue or is this solely based off of the current economic state of freight? >> You know, I I I don't know. I I go back and forth on it. I think it's um you
00:06:02
know, we all know that OE demand over the next couple years is going to be really uh really tight and and probably declining. Um which should hopefully be good for replacement. Uh but we also know that the trucking industry, you know, especially in freight, is is struggling, you know, and I You know, I'm looking at this and I'm going, you know, the guys who provide the best service in my opinion are the guys who are really s um suffering. You know, we we deal with freight ourselves. We ship
00:06:26
out and you know, JB Hunt's a perfect example. You know, they're they generally come in at a price point that looks really good except for you don't know when your freight's going to get there. And you know, and that, you know, has always been a reason we've stayed away from them in some cases. But as the economy, you know, goes through struggles, people start looking at price more. And is that driving their growth versus someone, you know, like a CRST who who is probably struggling a little
00:06:52
bit this year? >> I I don't know enough about freight to to say on that end from a a performance in economics, but it certainly seems like uh it's a good time to be big, right? The bigger you are, you're you're seeing some uh economies of scale there. And every tenth of a percent matters. Are >> are we looking at a near future where one of the other big boys go out unannounced >> uh from a tire manufacturer from freight? Yeah, potentially or absorbed. I mean yellow yellow was last year.
00:07:25
>> Um I think it was year before which was a big surprise I mean to a lot of people. I mean >> it's um it was certainly to me but are we looking at that possibly happening again? the the more I look at it um and a lot of this comes from freight waves and different news magazines as it relates to to transport is there's more challenges there than meet the initial eye right not just supply and demand take uh these huge huge lawsuits um and and I bring this up with retreading that's a a little sidebar is the
00:07:58
liability of retreading when it comes to a a transport fleet >> yeah Um but whether it's it's union driven personnel driven liability on the on the side of the road um [clears throat] fleets are incurring huge damages due to regulation due to the liabilities of running a fleet and that's that's cutting right out of their bottom line. >> Yeah. I mean you know us being in California we've probably been at the forefront of that uh with emissions. I mean, it's chased a considerable amount
00:08:33
of freight carriers and other trucking companies out of California, and the ones that have maintained aren't aren't as profitable they were four or five years ago. Yeah. >> And the foreseeable future is that's only going to get worse. And I, you know, I think being in California, we've we're pretty familiar with the word liability, lawsuits, >> stuff like that. And I think maybe the rest of the country is starting to catch up and um and taking some of that that, you know, them blows.
00:08:58
>> It certainly is. And these these big these big transport companies or just transport in general where it's high revenue um become targets, right? They maybe have a very tight bottom line, but their their revenue is huge and they become targets for for people who are looking to take some of that. >> Yeah. >> The um I'm [clears throat] wondering if right now we're seeing a shift and I'd love to get some transport guys on the show if we're seeing a shift in the way
00:09:23
that transportation is being handled in the United States. And what I mean by that is less than we we'd look at uh less than truckload, full truckload. Those are kind of the basic numbers last mile delivery. But are we seeing really structural infrastructure changes in how a product is delivered to an end user? Um because of Amazon, not because of Amazon um [clears throat] uh warehousing um direct to consumer business. Are we seeing a dramatic shift where some are winning and some are losing because of
00:10:00
it or is this just a point in time where people are buying less and uh they're not moving as much freight? >> I think it's combination. I mean I I want to you know I see more and more you know you know I call it I tell my wife because she has a tendency to have an Amazon package or two delivered daily. >> [laughter] >> So, as I'm roughing her up on that, you know, I I notice more and more personal vehicles delivering Amazon packages. Are are we are we going to transition to
00:10:27
either a lot of the the vans as we've seen the Sprinter vans and so forth doing a lot of this, you know, smaller package, mediumsiz packages >> and maybe even a Uber type delivery system? I I think there already is a a a B-toB Uber type agreements set up out there. Um where if they can find somebody to do it cheaper than doing it themselves, they'll they'll head that route. >> Um and I I don't know if that's temporary or if that's a that's a long-term play. I think it depends on
00:10:57
the amount of people that are willing to drive and deliver packages for $4 a package or whatever it is. >> Yeah. >> Yeah. Okay. Um, well, I'm I'm with you. I think it's a little bit of both. Going to where the tire industry is. I think there are some inherent challenges with what the value of a tire or value of a service is to is to fleets out there. But I also think a lot of the the financial challenges for the big majors, dealers, retreaders is freight driven. >> Yeah. You know, I think, you know, Joe,
00:11:28
and you and you and I have certainly had multiple conversations on it um >> just about every day. every day there's um >> you know there there's a big disconnect between the the tire dealer commercial tire dealer and the fleets and u I think that needs to be bridged um I I don't think um a lot of freight companies really understand what the cost is by not running the proper tire um and and having a program >> right >> and um and I think that's affecting their bottom line more than they they
00:11:58
they they're aware of it and I think the people who could solve that are going to be ahead of the game. >> Well, that's really the whole point of this podcast is for us to get closer to fleets. Yeah, >> it is a fleetdriven podcast. >> Um, I'll give you a quote and hopefully he's listening, but I was I was looking at getting a CEO um or somebody from his team on the show and [clears throat] he's listening and uh he's going basically giving me feedback that it it
00:12:25
feels too technical to a a fleet. Um, and that resonated with me, right? like, okay, we we have to put this in terms and value that is absorbable for a fleet. Um, but this is this is a guy who runs a big business and uh somewhere down the line there's a P&L with a probably a big number for tires and his quote was, "I'm not going to buy we're not going to buy the cheap Chinese, but we're not going to buy a Michelin either." >> Yeah. >> Right. Um, anywhere in between is good.
00:13:01
It says a lot of where we need to go. >> It absolutely does. And and I think we hit on that three or four podcasts ago where we're, you know, what's the future of u of the tier two, tier three tires, >> you know, is the tier two the next tier one? I mean, is that going to be the focus point for most fleets >> um to get the, you know, best bang for their buck >> until value is proven otherwise? Absolutely. >> Yeah. Um, I can't talk about freight being down and not talk about aggregates
00:13:29
and mining being good. Um, some some quarter three woes I think from tariffs, which we'll talk about tariffs. Um, but still uh your big players out there, your your Vulcans, your Martin Mariettas, your uh big international miners posting still really nice earnings per share. Yeah, you know, I I was having a conversation yesterday with a gentleman and we were talking about mining and and you know, it was funny. Um he he made an interesting comment where he said, you know, people in the world don't
00:14:02
understand the world cannot operate without mining operations and aggregate it drives everything whether it's electricity, fuel, um precious metals, batteries for our Teslas >> and everything else. I mean, everything we do has some type of mind and operation attached to it. >> Yeah. Yeah. I I don't think it really popped into my head until I heard it from Aaron Wit and the Build Wit team and those guys talking about just how how crucial it is to the global economy. >> Absolutely.
00:14:36
>> Yeah. Um, [clears throat] we want to get into industry stuff. >> Sure, let's do it. >> Okay. Um, ATD uh I should say one of the tradem published that ATD has signed CMA which is double coin for the most part product line >> GT radial and nex. >> Yeah, you know it's um it's interesting. Um, >> so while you're thinking about it, for the for for the viewers out there, ATD is the largest wholesale distributor of tires on the planet. Um, they just went
00:15:17
through their third bankruptcy. They've got uh new leadership. Most of the assets have been boughten back from their previous owners or major financial lenders and um they've been uh cancelled by a lot of major tire brands for credit reasons and because those brands have built their own distribution over the last 10 years. So now they seemingly don't need it to compete. Um but these are three uh I would say interesting brands of choice to jump on board. >> Yeah. And and maybe more so than brand
00:15:57
maybe it's a interesting concept. Are they moving away from tier one product and looking at a replacement u market that is focused on tier two tier three and and [snorts] that's what they figure is going to drive their profitability because I think everyone agrees if they can't figure out a way you know to become profitable they're going to be in their fourth. >> Yeah. before long. So, is this a shift on their business model that say, "Hey, we need to bring in more tier two, tier
00:16:24
three products and focus on that." >> I I think it absolutely is. Whether they have a choice or not is a different story. >> Um, but I I like the play uh by ATD and I like the play by a lot of those brands. Um, you know, Doublecoin was a huge brand in the basically late 2000s. Yeah, >> this gives them a ton of distribution. Um, GT Radio was uh a top 10 manufacturer globally in the late 90s to basically 2010. They got hit with a tariff uh one of the first rounds of tariffs and basically never recovered.
00:17:05
>> Yeah. >> Never came back. >> Now they have US production. Right. So, two two factories coming online that I think are interesting is Hanook >> uh has a PLT and a truck factory and I believe that's the same thing with GT radial is they've got domestic truck but c most certainly domestic uh passenger light truck. >> Yeah. In fact, I think GT announced a a US manufacturing plant probably 10 years ago and just never I mean they've been looking at this for a long time
00:17:31
>> but yeah a long long time. >> Yeah, it's uh it's nice to see it happen. And I mean I, you know, I've always um I was selling GT 20 25 years ago um when we didn't use the abbreviation on um GT and we called it by what the real name was, which I could never pronounce properly. >> Can you try for our viewers because I don't remember. >> I'm really I'm going to get it, but it was um Gouta Tonga, I think, something like that. I I I just I'm going to get a lot of
00:18:00
comments on >> uh editors, if you could clip that that part right there. Um [laughter] uh thank you. >> Uh you set me up completely there, Joe. >> Yeah. No, this is being recorded. >> Y >> u So I mean GT Radio's a a monster. They could they could really take a lot of market share. And then you have Nexon coming on board, which Nexon has really had poor distribution in North America. They've got a new CEO, if I recall, it's uh Paulo, formerly from uh Traborg. It's
00:18:31
been a relatively niche winter tire on off-road and onroad. >> Big following kind of like Toyo in a lot of ways. I mean, yeah, I think Toyo's probably had a little bit better marketing and distribution, but um Nexon is is right there with them. I think >> it has some it has some substantial brand loyalty and so now it's kind of going big box big leagues, which would be interesting. >> It'll be real interesting. Yeah. >> Yeah. >> It's um it's exciting to see. I mean, I,
00:19:00
you know, the GT's always been a good good performer for where it sits in the market. >> We'll see if they don't try to make a a really a solid jump to a true tier two to compete with people like Nexen, Hand Cook, um, >> Toyo, if they're if they're going to try to make that move with the US manufacturing. Well, I think with with all of it, we talk about tier three, we talk about tier two, we talk about tier one, we we more or less define those by market share, price,
00:19:31
um, uh, perceived value. Um, but going back to the fleets that may or may not be listening is is the industry is going to have to do better. We're going to have to do better at showing that value. Why should an Nexon be worth tier two pricing? Why should a Michelin be worth tier one pricing? Why should Doublecoin be worth tier three pricing? >> I'm good with the rest of the industry just sitting where they're at and let us do that job. [laughter] >> That's a that's another quote. That's a
00:20:05
bold statement right there. >> Let me tell you, I'm okay with them not selling value. [clears throat] >> Just keep selling price. We'll we'll worry about the value prop. >> We we do need to and we talk about data a lot. We talk we're going to talk about it. Let's let's just move right into the FS592. >> Yeah. >> So, the FS591 was a really popular tire in certain markets in the United States, >> especially in California. >> It's a premium steer. California uh
00:20:29
Texas is a premium steer tire. Uh selling between 300 and 400 bucks for most of its uh its time. >> Um and uh getting between 80 and 120,000 miles, you know. >> All right. I think it's been really [clears throat] underpriced for for the quality that it's put out >> um over over the last four or five years. >> Well, I would like to stack that up so we can kind of talk about some of those. If you if you had a a Michelin and a Goodyear that both could exceed 200,000.
00:21:01
So, they could get to 220 230 if wellmaintained. Um but, uh poorly maintained, you're seeing 160 to 180 >> at best. um at best, which is an interesting argument that I I'm going to put this out here, is uh a well-maintained valuepriced tire will outperform a poorly maintained premium tire >> every day. >> Every day. Um and that's something that the industry and fleets, uh that's going to be your best spend. That's going to be your best direction. Even consumers
00:21:39
could whether you're a consumer, you you run a 500 power unit fleet is good maintenance. Whether it's in-house or through a tire dealer, you're going to outperform your whatever you bought as an asset, whether that was a Goodyear, whether that was a Firestone, whether it was a Michelin, whether it was a double coin. U but let's look at those numbers. So, let's say a a Firestone uh FS591 was 400 bucks getting 100,000 miles. Your Michelin at uh 200,000. We can call it 200 in there.
00:22:14
>> Yeah, call it 200. Yeah. >> High six. Close to seven. >> Yeah, >> it it's it's close enough that maintenance is going to matter, I guess, is is my point. >> Yeah. >> Right. Theoretically, when you consider tire changes, a Firestone would be more expensive in the long run in that position than a Michelin. Um, but that assumes great maintenance, right? And if you had poor maintenance and you were down to 150 160 on the Michelin, all of a sudden it doesn't cost out.
00:22:49
>> Yeah, it doesn't cost out. And there there's so many other little things that go along with that. Fuel economy. Um, you you mentioned just a second ago, you know, the cost of doing a tire change, you know, service call, dismount mount, that's another, you know, if you do two steer tires, it's another 140 bucks, 150 bucks if you factor in alignments. >> Most people are doing alignments at that same time. Yeah. >> Um, so, you know, when you really factor all that in, um, the the two tire
00:23:16
changes, the one tire change, um, the Michelin's really costing out. you put a good maintenance program behind that and you increase their fuel economy, you you save them money in other places, now it's really costing out. >> Yeah. >> What I what I think is very interesting about that premium steer segment is the the spread of spend. >> Yes. >> Um [clears throat] so you could get as high as $700 plus dollars on a steer tire. You could be trying to play a tier three game, which
00:23:44
I think they're going to break through the 100,000 mile barrier this year. Um, I think that's a given, but >> we have some running that are going to break it. >> Yeah. >> Yeah. We're going to bring data on the show to show them chasing that number. Um, but you could get 8090. Um, which is putting pressure on everybody to to move up, but the spread of spend could be anything from $250 to $700 uh on a steer tire. It's a huge huge spread. So, Firestone, one of their most popular
00:24:16
tires. They move it to the FS592. Similar to Michelin with the XDN2, now going to the Xline grip D plus V vcoded directional. >> Yes. >> Um, little bit of joking there. I don't actually know the name. >> Um, >> you're close. >> That's close. Thank you. >> Yes. >> Can you pronounce GT again for me? >> No. [laughter] >> So, uh, uh, they've it's a it's a move that they have to do, right? Um because if the tier three are chasing 100,000,
00:24:50
okay, then what's the expectation? What from your chair, FS592, how many miles does it have to run to be successful? >> I I think it has to be pushing 150 um to to be a replacement. I I think um you know, and I think if it's under 150, then they replace the tire just just to replace the tire because they felt it was time. Uh the big question is are they gonna are they gonna value that tire at what it should be valued at? Are they going to raise the price on it finally? And were the customers buying
00:25:23
it not only because it had a name brand on it, it ran well, but also because of the price point, would they have still bought the 591 if it was $100 more? >> Yeah. Um and I don't I I don't know if I I wouldn't say I even think that Firestone priced it uh incorrectly. I just think the it was a tough value proposition for the dealer and you saw dealers basically giving it away at cost >> um or close to cost whether for backend incentives or um didn't have another option. Either you're getting pressured
00:26:00
from the top end uh the the guys that are running 200,000 miles. But you think about it, if you're getting a h 100,000 and you've got a tier three right below it that can easily get 80 and it's not three $400, it's $2 to $300. >> Um all of a sudden that cost comparison is super super tight. So I just think it was the the the performance um and the dealers need to move that tire that >> they need to move. Yeah. It's, you know, we talk [clears throat] about it, you
00:26:30
know, what is that um um commodity tire, you know, and and generally, you know, for commercial tire dealers, it's been the tier three trailer tire. Low Pro 225 is the commodity tire. You sell it to get the position. You're not making a lot of money on it. And I think for Firestone, it was the FS591. >> Yeah, >> that was the commodity tire to [clears throat] get them units on vehicles. >> Yeah. Well, it was incredibly popular. It had great reviews. Uh people were were happy with getting to that 100,000
00:27:00
mile mark pressures on for FS592. >> Yeah. Let me ask you something, Joe. What we we talk about tier one, tier two, tier three. Mhm. >> Do you do you see a possible shift from the tier one not also being because there's people not being able to prove value on it or because the state of the transportation industry over the last couple years and probably for the next couple years people are looking at their upfront cost versus their longevity and and the long-term cost per say cost per
00:27:29
mile versus acquisition cost. >> Your your ask is are we seeing a temporary or a long-term shift in purchasing patterns? Yeah. >> Um >> I mean, if a fleet, you know, midsize fleet, 40 trucks, they're looking, hey, two steer tires, labor, alignment, I'm $2,000 out the door, right? For for a tier two tire, solid tier 2 tire. For a tier one, you're 23, $2,400. Are they looking at that now and going, "Hey, I could get a a good quality tier three tire. I'm not going to get what I'm
00:27:59
going to get out of a tier one, but my price points now is 1,500 bucks out the door." Do you see a shift? because they're looking at upfront cost versus cost per mile long term. >> Okay. So, yes, I think I think it's anybody from somebody going to the store to buying milk to a transportation company saying, "I'm going to need to make some uh some initial cost decisions that may have negative long-term financial consequences." But yeah, I'm going to buy something cheaper
00:28:33
right now and I'll worry about the rest of it later because it's a war of attrition and freight >> survival. >> It is 100%. You mentioned uh JB Hunt, you know, having lower uh lower rates out there. I don't know that, but they it they can do that for as long as they can in order to weed everybody else out and then it demand goes back up, price spot market goes back up and they crush it. Yeah. >> So, um yeah, I think fleets are are making those decisions and they should they
00:29:06
have to >> they have to >> um because it it them winning and losing may may be one quarter's worth of expenses. >> Yeah. >> At this point, >> right? It's how many truck how many drivers can you keep in those truck in those seats profitably? Um, and if it has a X effect, Y effect on fuel or casings or what have you, someone needs to quantify it, right? And that's that's where on the dealer side, it really needs to come in. Um, which more or less we talk about again every
00:29:40
single day. >> Um, but I think there's uh there's a shift short-term and I also think there's a long-term shift. I think that concept of I'm not gonna buy the cheapest thing, but I'm also not gonna buy the ultra premium. Ultra premium has to prove why it needs to go on >> and everything in between is fighting for a majority of the market share. >> I agree. >> Yeah. >> Which puts more emphasis on why ATD is going the route they're going. >> Yeah. I well um [clears throat] they got
00:30:10
you think from a business standpoint they got burned pretty uh I want to say it it was a long-term burn but >> yeah there other people built distribution around them and then didn't feel like they had to rely on them. Um, ATT is still very interesting to me because it was more or less the first major wholesale distributor that had zero investment from manufacturers. >> Yeah. >> Um, and uh they'll they'll adjust based off of buying patterns for sure. And if Byron patterns are hitting tier two,
00:30:49
tier three, that's that's probably where they're headed because there's not any need for more major manufactur major manufacturer distribution. >> If you want a Goodyear or Michelin, you can get on any corner, any street practically globally. >> Yeah. >> Yeah. Um, okay. We talked about uh the the retread bill FS591 distribution plants. Um, >> let's talk about Michelin's u financials and and outlook. >> Well, what do you want to talk about? >> I think, you know, you look at you look
00:31:25
at all four of the majors, which I would consider, you know, Michelin, Bridgestone, Goodyear, Continental, not necessarily in that order. Um, but, um, they all seem to be suffering. And I think Michelin has probably made the most dramatic changes internally, at least [clears throat] from my perspective, over the last few years, reducing staff, changing the way they go to market. Um, and they have some of the most dramatic um drops also in their financials and on their outlook. Um, I I wonder if that
00:31:56
doesn't have a little bit to do with it. >> So, I I I would say to that that it's all relative. the major the the the the major manufacturers um uh with the exception of Goodyear outperform every other element of every other supply chain in the industry including the customer base. So your your big three out there are pulling down net profits of 10 plus percent on anywhere between 15 and 30 plus billion dollars. Um the wholesalers are not are are pulling down less than two dealers,
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less than two um we already mentioned distributors and fleets fleets incredibly tight. So there there certainly are some woes there. Um but I'm not raising the red flag uh that hey there's u there's going to be a big shift and it's going to jump down to zero. um >> see that happening, >> but it's it's certainly been impactful. They're not, as of right now, not enjoying the the healthy net profits. I don't know if field support will ever return. We can get into AI here for a
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little bit. Uh but, uh everybody's trying to cut down on customer service. >> Yeah, I agree with that. I I just question whether they're a little bit too soon to that ball game yet. um are are they especially in the the fleet the commercial side of it where in a lot of ways relationship still ma matters you know when I'm talking to big fleets medium fleets um construction companies that used to have u representation from the major manufacturers and now they don't even know who their rep is or
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their rep is you know two 2,000 miles away I don't see anybody who's happy about that who is saying hey I I'm enjoying the the level of customer service I received today what I'm hearing is, "Hey, my price is going up and my customer service is going down and I'm pissed off." >> Um, I mean, I don't I don't disagree with that. Relationships are why pretty much we do everything. I would slow like to get help at Costco and and Safeway when I go, but and I don't always get it, but
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I still got to go to the grocery store. You know, I just be a little bit more bitter, a little bit more older, cranky man about it. But I I move on, right? >> You know, I I got called out for being a old grumpy old grumpy guy the other day because I still refuse to go to self selfch checkckout. >> Mhm. >> And my wife's like, "Just get your together." And I'm like, "I'm not doing it." >> You know, my issue with selfch checkckout is is that when you do selfch
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checkckout and then it doesn't work >> and you still need help. >> I am hot. I am hot. I've got to wave somebody down. And the lowest the lowest totem pole in the in the grocery store is the selfch checkout help person. Yes. >> Right. So they are so angry to see me and I'm like trying to run something through and I can't get the barcode to work and >> I'm with you, man. I I hate it. >> I have I feel like I'm doing them a favor. Can you please come over and help
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me with this machine? >> They're not paying me. >> It's not my fault. >> I'm with you, man. They're not paying me to bag my own groceries, right? >> No. my cost of food didn't go down. >> So, my point is on the grocery store thing is there was once upon a time um I'm young but not I can still remember this where you basically could find help in every aisle. >> You could flag somebody down and be like where are the olives? Oh, let me walk
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you to there, sir. They're on aisle F18. Um and grocery stores had to pivot because they for whatever reason competitive reasons couldn't afford. Now, I'll I'll play a little devil's advocate. So, we can critique, hey, there's not enough uh support in the field from major manufacturers. Okay. Well, you've got 100 million,200 million, 500 million imports manufacturers running with five people in the United States, 10 people in the United States. So, they have a lot less infrastructure cost now.
00:36:03
They're running on lower margins, >> right? Um, we'd have to make sure the math maths right there. Uh, but my point is is that they can do that very very efficiently. And if you're on the other side of the coin and you've got thousand reps in the field, you got to start thinking about that. >> Well, but we also talk about value. >> And and I think the the imports, the tier three, tier four, they're not worried about value at this point. They're worried about I need to be
00:36:32
cheap. I need to get into the fleets. um a majority of them and I think [clears throat] there are a group of them now that are recognizing we need to up our game and we need to move into that upper tier um you know three or mid-tier three um the manufacturers aren't selling on price in most cases >> so uh okay a lot of things to unpack there uh I heard this uh from a industry association uh that was given a pitch on the retread bill and they were like the the the cheap Chinese don't retread. Um, and
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that's not true at all. Some of them have the best retread uh warranties out there. They do perform. Two, >> everything is imported pretty much. I mean, there is some domestic supply, but so much is imported. Um, and uh, you make a great point which is if you are the flagship, let's call it the Whole Foods of Safeway or Whole Foods of Grocery, you do have to have premium customer service, right? If you're not, you know, completely different ball game. So, I think that is probably
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>> Shop the Nugget, man. >> The Nugget is nice. [laughter] The Nugget is the Nugget uh, exist uh, nationally or no, it's just a West Coast thing. >> It's locally owned actually. Um, I think there's six or seven stores still locally independently owned. >> Yeah. It's like the um it's like uh it's like Whole Foods before Whole Foods became Whole Foods. Yeah. >> Right. >> Yeah. Absolutely. >> You know, it's nice. >> Yep. Never have to wait cuz they'll open
00:38:02
up another check line for you. They greet you with a smile. >> Oh, yeah. You get you could spend a whole day there. You could have pay a little bit more money. >> You could have a sandwich, a beer, >> you know, do some wine tasting, get some desserts. It's It's nice. >> Yeah. >> Yeah. Okay. All right. Uh, that's all I got for today. I mean, oh, I I got I got one more thing for Oh, we should talk about tariffs. We really should talk a little bit. >> We have to talk about tariffs. People
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love talking about tariffs. It's exhausting. >> Yes. >> So, before we get into tariffs, I'm going to do one stat. We still we 20 years ago the average import passenger light truck tire car tire truck light truck tire for all intents of purposes came into the United States at $33. Today this year 2025 it is $113 but we all sell a truck tire still for 200 300 bucks. >> Yeah. >> Why? we feel we have to because we don't have a value proposition to to to demand more
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money. >> So, okay, I I I agree with that. It hasn't necessarily improved for the fleets. Um, but have car tires improved that much? No, I I think you know in a lot of ways you know on car tires you're looking at um you know you know the average person goes in with their Subaru and buys a set of tires. >> Michelins are going to cost them 17 $1,800 Michelin Bridgestones. >> Um >> the average person can't go in and afford to buy a new set of tires, you know, every few years at that kind of
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money. And then what they're finding, I I believe what they're finding is when they go to that tier two, tier three, tier four product, and there's some bad tier four products, don't get me wrong, but there's some products in that tier three range that are pretty decent, and people are going, "Hey, I'm paying I mean, sometimes on the on the consumer side of it, it's a third of the price." >> Yeah. >> And they they're putting these tires on and they're going, "Hey, wait a second.
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I feel like I replaced my Michelins in the same timeline as these." They're probably off a little bit, but in their mind they're going, "Hey, this is a every three, four year expense. Um, if I reduce it by six months >> and I'm paying a third, I'm winning all day long." >> Do they really notice the biggest difference, which is probably going to be wet weather traction? Do they really notice that? I don't think the average person could tell you one bit if a
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Michelin's handling better than a than a than a GT. >> Well, and how long are they keeping their cars? So, when I >> when I think about it, I think, okay, well, cars have gotten bigger, >> right? Uh, they've gotten more powerful. There's more torque. They're on the ground. People are keeping them less >> status. I need a new car. >> Yep. And so, why put a a fancy set on if I'm only going to keep it x amount of times? >> Um, a lot of different reasons for that
00:41:02
that price point change and buying patterns. >> Yeah. Okay. Tariffs. Um I I think the biggest one for this uh episode November changes every two weeks so by the time this is out it'll be different. But at this point in time medium truck tires are now included in the bare minimum 25%. >> Yes, >> from all countries. So it doesn't matter where it was negotiated. If it was 10% out of Vietnam, okay, now it goes up to 25%. Um that's that's probably the biggest drama. I don't think it changes
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anything. >> No, I mean it levels the playing field in a lot of cases, but I I don't think it changes anything. >> No, >> you know, I still think it's going to be interesting to see where we we land in in you know, like India, for example, >> right? >> India is a big wild card. I mean, what do they do if they can't get something negotiated? >> Rumors right now are that that's going to come in at 16 points. Yeah. Um and uh I think that's where the current
00:42:05
administration wants almost the average to be is between 16 and 18 points. >> Yeah. >> Um with China being at 50 plus. So it'll be interesting to see. I think there's a bigger play there. Um but even then there's still going to manipulate currency. They're going to absorb it. Um move factories for all intents of purposes for everybody every consumer fleet in the United States. It's it's your pricing is going to go up. Our pricing is going to go up. Um but not
00:42:36
much is going to change. >> You think GT um and Handcook um finally making that final, hey, we're coming to the US had anything to do with tariffs long term? >> Their decision to go come. Yeah, >> I think GT uh uh just couldn't get it done in in a in a timely fashion, but I think they were the ones hurt most by the first round of tariffs in early 2011 >> and that's when they first announced I believe it to come to the US and then they backed off as the tariffs backed
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off. >> Yeah. Yeah. Um, so I think they just didn't want to navigate the volatility, which I don't I could understand that from a business standpoint. And Handcook probably the same thing, right? Mitigate their risks, put some investment in, and uh they'll likely recoup the margin. Do we see a um a um manufacturer um plant open up in the US from maybe BKT or or MRL or one of the other guys? >> There's already too much production in the United States. >> Yeah. >> Trailerborg closed their factory in in
00:43:45
Spartanberg. You have Mus, you have Firestone, you have Titan, and nobody's running at max capacity right now. So um even there's there's more than enough production to cover United States. >> Why do you think that is? >> Why is there so much production? >> Yeah. Why why are they not at capacity? I mean a a is such a big part of what we do in the US. Um why do you think I mean is it the imports are so much better and and the price point so much better in a lot of cases that they just stole the
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market share? >> Um there's a lot to unpack there. uh a tires are running longer. >> Yeah. >> So you have higher horsepower tractors but they are functionally getting more hours. Um so that's that's huge when you look at on a per unit basis imports uh India is covering 30 to 40% is the last numbers I saw from agricultural imports. Labor over there is $8 a day. Um it's not a quality uh uh concern, it's a cost. They're can be much more efficient with it. Um they can also deal with
00:45:00
because of their uh their land cost, they can deal with the volatility of a a whole lot better. In my mind, >> a goes like this. We've we it's arguably arguably my biggest passion. And you can see a spend triple compared to a previous year and then drop down to 5%. >> Um I mean we should have a whole episode on it really on the current state of the a market in the western United States. >> Um but those volatilities that's a lot easier to do when you have a plant in
00:45:33
the middle of nowhere and uh you can send everybody home for the day. Uh Firestone Titan they don't have that privilege. this around the bead has a is going to have a great tour of the Titan factory coming out this fall and um how important De Moines was to the United States infrastructure uh the union workers that are there but they can't just send those guys home if they don't have stuff. So they have those those high fixed costs. So it's hard to deal with the volatility and get
00:46:05
efficient. Um, but OE drives that success because that's where they can gain on the supply chain is if they have a factory down the street from John Deere or Case. Um, boom, we can get you product right away. >> All right, here's a question for you. >> What's your worst fear and concerns with tariffs over the next two years? >> I don't think about tariffs unless people ask me. >> You brought it up. I said I didn't want to talk about it. You said no, we're
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talking about it. What's my we my worst fear is that uh is that there's continues to be volatility with it, right? The ups and downs don't help anybody. Um they make it really challenging and really frustrating for fleets. >> Um for those that are holding inventory, um namely dealers and distributors, it is extremely costly and has a ton of long-term penalties. >> Yeah. Um and for the manufacturers it creates shortages. So inevitably so it's 2025 we can try and predict this
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that because you have India tariffs because uh you have a lot of uncertainty there is little to no factory production for agricultural tires and a lot of tires as of today. So the inventories are getting lower and lower. Theoretically by spring 2026 you will start to see cracks in the supply chain. This isn't available. This isn't available. This isn't available. And so those are the three major categories to me is if tariffs create volatility the more this up down yes no maybe 16 maybe 50 maybe 100.
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frustrating for consumers, fleets, and users, massive financial penalties for dealers and distributors. They incur the the biggest penalties there. And then manufacturers essentially shut down production and it creates shortages. So that's my biggest fear. >> Pretty good fear. >> Okay. >> Drew that out quite a bit. [laughter] >> You could have just said volatility. >> You said fear. You wanted You wanted the drama. You wanted the drama. >> I did want the drama. Absolutely. You
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know, I love drama. >> Okay. All right. Let's Can we leave it at that for today? >> We can leave it at that for the day. >> It's been fun. >> Yes. Absolutely. I enjoyed it. Thanks for having me. >> Thanks, Doug. >> Yep. >> Around the bead [music] podcast. Tire talk for trucking, mining, agriculture, and more. Your home for fleet solutions. Aiming to inform, [music] pioneer, and entertain the tire world in connected industries. [music] Sponsored by East Bay Tire, keeping
00:48:56
essential industries moving forward.
