Tires and Inner Tubes

SIC 3011

Companies in this industry

Industry report:

This category covers establishments primarily engaged in manufacturing pneumatic casings, inner tubes, and solid and cushion tires for all types of vehicles, airplanes, farm equipment, and children's vehicles; tiring; camelback; and tire repair and retreading materials. Establishments primarily engaged in retreading tires are classified in SIC 7534: Tire Retreading and Repair Shops.

Industry Snapshot

After years of intense price wars, consolidation, and layoffs, the tire and inner tube industry was highly concentrated. From a value of $80 billion worldwide in 2004 the industry plummeted to less than half that value in 2008. Bridgestone, Michelin, and Goodyear were the top three firms, controlling about two-thirds of the global market in the middle of the first decade of the 2000s. The capital-intensive nature of the industry lends itself to such patterns. While raw material prices were relatively stable and assured, since most manufacturers maintained their own rubber plantations, mostly in Southeast Asia, the cost of manufacturing operations was particularly high, making it difficult for smaller firms to generate economies of scale.

The tire industry developed in the twentieth century as a major supplier to the manufacturers of automobiles and other vehicles and to consumers seeking replacement tires. The tire and rubber industries have traditionally been based in Akron, Ohio, where most tire and rubber companies' headquarters were located.

The tire business is reasonably assured of stable sales. While the demand for vehicles can fluctuate with changing economic conditions, the purchase of replacement tires cannot be deferred very long, which gives a relative evenness to the rate of tire purchases. However, the increased durability of tires due to technical improvements has decreased the rate of replacement purchases, forcing manufacturers to compete along lines of durability, innovation, and style.

U.S. auto sales plummeted as the economy worsened in mid-2008 and into 2009. Worldwide tire manufacturers had not recorded such steep declines in three decades, according to a Bloomberg News analysis. Unfortunately, "people are buying fewer cars with original equipment tires and delaying the purchase of replacement tires."

Although the U.S. tire industry began to recover from one of the worst global economic recessions in 2010, raw material shortages and rising prices took center stage. Tire shipments were projected to reach 296 million units in 2011, up a mere 4 percent over 2010.

Organization and Structure

Most tires are manufactured by relatively large companies that produce a wide range of types and sizes, while small tire producers tend to limit output to specialized product groups. Although a major portion of industry sales is to vehicle manufacturers for installation as original equipment, a much larger share is sold as replacements through various distribution channels. Although manufacturers have made substantial inroads into the retail distribution market, this area is still dominated by independent dealerships.

The tire and inner tube industry depends chiefly on rubber suppliers for raw materials and automobile manufacturers for sales. More than 50 percent of the world's production of rubber goes into the manufacture of automobile tires. The tire and inner tube industry is the largest segment of the rubber industry group, constituting over 40 percent of that group's product sales. The rubber industry group is represented by the Rubber Manufacturers Association (RMA). RMA members make up more than three-fourths of the dollar sales of the rubber industry group as a whole.

The industry's strength and stability belies an undercurrent of competition and economic issues that have changed the industry's structure and led to the abandonment of plants, employee reductions, and limited profitability.

In the late 1980s, the U.S. tire and inner tube industry's ownership concentration shifted overseas. While U.S. tire manufacturers once dominated the world industry, by the 1990s, the four largest companies were owned by French, Japanese, and Italian nationals. British interests have not been successful in their attempts to acquire control of remaining leading U.S. tire producers. Competition has become more severe and more international in scope. These ownership changes are part of a trend for mergers of many of the major companies, resulting in larger but fewer independent companies in the top structure of the industry. Within the United States, production is concentrated in southern states like North Carolina, Oklahoma, and Alabama.

Tire Types and Characteristics.
Although a small number of tires sold consist of solid rubber, most are pneumatic, or inflated with air. The pneumatic tire was developed in the late 1800s for use on bicycles just prior to the onset of the automobile industry. Later, thousands of sizes and types of pneumatic tires were made available for passenger cars and other vehicles, including trucks, buses, tractors, motorcycles, airplanes, and construction vehicles. Tire sizes range from less than two pounds to more than three tons for earth-moving equipment.

Tire casings are made from layers of rubber compounds and synthetic fibers or steel wire. The design and arrangement of these layers, or plies, affect qualities like cornering ability, vibration absorption, and durability.

Relationship with the Auto Industry.
The tire and inner tube industry has always been heavily dependent upon the automobile industry. Competition among tire manufacturers has been fierce, particularly for status as original equipment for automakers. Because car buyers tend to purchase replacement tires of the same brand originally sold on the car, it is good business for a tire producer to cut prices and induce auto producers to select its brand. For each tire included as original equipment, an average of three replacement tires will be purchased.

Background and Development

The History of Rubber.
Christopher Columbus noticed the existence of rubber on his second voyage to the New World when he observed indigenous groups playing with balls they had made from a liquid obtained from a tree. Practical uses of rubber products began in earnest in the early 1800s, especially with the use of rubber in clothing as a means for waterproofing. However, widespread applications were limited because the rubber material was somewhat sticky, odiferous, and easily affected by shifts in temperature.

U.S. inventor Charles Goodyear invented the vulcanization process of rubber in 1839. By incorporating lead and sulfur with rubber and applying heat, Goodyear created qualities of durability and stability, which facilitated the use of rubber in many practical and beneficial products, particularly tires.

In 1876 Sir Henry Wickham planted some rubber trees in Kew Gardens in London, England, from rubber tree seeds he brought from Brazil. These trees were transferred to Sri Lanka and the Malay Peninsula, where a rubber plantation industry developed that produced almost 3 million tons a year. Some of the large tire producers later acquired and managed their own rubber plantations.

Tire Design Developments.
The pneumatic principle was first discovered in 1845 by British engineer Robert William Thomson, who applied it with modest success to carriage tires. However, solid rubber tires remained more popular until John Boyd Dunlop patented a more practical pneumatic tire in 1888. Dunlop's tire consisted of a vulcanized rubber and canvas tube with a valve attached to a solid wood wheel.

In 1890 further tire design refinements were developed by Charles Kingston Welsh and William Erskine Bartlett. A design featuring a detachable pneumatic tire, created and patented by Welsh, continued to be used in the twentieth century. Bartlett developed the beaded edge for the tires so the tire's edge could be hooked securely to the wheel's rim and would remain firmly attached by compressed air in the tire.

Synthetic Rubber.
The automobile and tire industries grew in the early 1900s. The tire business increased when the steel wheels of agricultural tractors were replaced with rubber tires. All tires were made from natural rubber until the 1940s when the supply of natural rubber from Asian plantations was cut off during World War II. Out of necessity, a synthetic rubber was quickly developed and remained an important raw material in the industry. In the 1960s, synthetic rubber sales equaled that of natural rubber as a raw material for tires, and synthetic rubber eventually became the preferred material.

Tire Structure and Features.
Tires are manufactured by assembling plies of rubberized fabric on a cylindrical drum. Various materials may be used in the plies, including cotton, rayon, nylon, and polyester. Steel wire or glass fiber is incorporated in radial tires, perpendicular to the direction of the tire's motion, providing more stability.

Radial tires were first sold in the United States after World War II by France's Michelin. They were not produced extensively by U.S. tire manufacturers until Lincoln adopted Michelin radials as standard equipment for its 1968 Continental. Radials eventually became the most popular tire, comprising more than 90 percent of the passenger car tires and 65 percent of truck tires purchased in 1990.

The performance of tires improved greatly over the years. Manufacturers improved durability, traction, cornering, shock absorption, and ease of mounting. Designs for tires with greater width and lower height give vehicles greater contact with the road, lowering the center of gravity.

Changing Company Ownership.
Except for French-owned Michelin, which was a technical and commercial success from the late 1800s, the tire market was dominated by well-known U.S. company brand names, such as Goodyear, Goodrich, Uniroyal, Firestone, Dunlop, General, and Armstrong. However, foreign companies purchased most of these companies between 1985 and 1993. A major reason for the purchase of U.S. tire companies by foreign firms over this period was the decreasing value of the dollar. Furthermore, the weak economy left U.S. tire companies and foreign-owned companies operating in the United States unable to overcome the fact that tire imports outpaced tire exports between 1971 and 1999.

Original-equipment light truck tires were the fastest-growing market category in 1998, with shipments of 8.5 million units, up 21 percent from the previous year. Replacement passenger car tires led the overall market in production, at 191 million units, while 81 million original automobile tires were manufactured. Total production of all tire categories reached a record 295 million units, of which 215 million were replacements.

Tire manufacturers faced growing competition from tire-retreading firms in the late 1990s. In 1998 these companies sold 30.9 million retread tires in North America for over $2 billion. In pricing, long the focus of tire competition, retreads cost 30 to 50 percent less than new tires. Moreover, retread firms promote their products' environment-friendly characteristics, reducing waste and saving tires from landfills, a concern to many environmentalists as the nation's scrap-tire production reached 270 million units in 1998, nearly 100 million of which were added to stockpiles. However, in 1999 retreads were the subject of a wave of negative publicity, including skepticism and concern relating to their safety on highways. Nonetheless, major manufacturers have taken note. Michelin North America Inc. moved into the retread market in 1999, and Bridgestone/Firestone followed suit.

After a year of record shipments in 2000 (321 million units), industry shipments fell more than 6 percent in 2001, with a decline of approximately 21 million units. This drop was attributed to a slowdown in automobile sales in a weak economy, as well as decreased consumer confidence following the terrorist attacks against the United States on September 11, 2001. Although shipments did not decrease in 2002, Rubber World reported that the Rubber Manufacturers Association's Tire Market Analysis Committee estimated growth to be only 2.7 million units, or less than 1 percent.

Following more than 270 accident-related deaths and many more injuries related to the Ford Explorer and Bridgestone/Firestone ATX and ATX II Wilderness AT tires, safety was the primary concern for the tire industry during the early years of the first decade of the 2000s. Bridgestone/Firestone Inc. was forced to issue a recall in August 2000 involving more than 14 million of those tires. By 2003 Bridgestone/Firestone and Ford Motor Co. had settled lawsuits with various states related to the deaths at significant cost to both companies. However, they still faced a number of personal injury suits.

In 2002 the Department of Transportation's National Highway Traffic Safety Administration (NHTSA) issued "a new Federal Motor Vehicle Safety Standard to improve the information readily available to consumers about tires," as required by the Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act of 2000. The NHTSA explained its final ruling, effective September 1, 2003, saying, "The new information will assist consumers in identifying tires that may be the subject of a safety recall. It will also increase public awareness of the importance and methods of observing motor vehicle tire load limits and maintaining proper tire inflation levels for the safe operation of a motor vehicle." The legislation provides the NHTSA with the authority to make certain requirements of manufacturers if such action is necessary for promoting information about tire safety.

As the economy recovered after the dismal years of the early years of the first decade of the 2000s, the Rubber Manufacturers Association projected that tire unit shipments would increase 15 million units in 2003 and 2004, representing an annual growth rate of more than 4 percent. In 2004 Automotive News reported that the worldwide industry increased 12 percent over the previous year, reaching $80 billion. As demand continued to increase in China, industry sales also were expected to increase. Bridgestone, Michelin, and Goodyear retained their longtime respective places in the "Big Three."

The growth of niche markets has offered the industry a much-needed break from vigorous price-war-based competition. The growing demand for everything from tires for specific weather conditions to tires of a particular style or color necessitated increased flexibility in production facilities, which attempted to avoid excessive manufacturing costs in an attempt to bring diverse product lines to market. However, such streamlining calls for significant investment, which further squeezes many small companies. A drive toward technological innovation and product diversification characterized the tire industry. In 2005, for example, airless tires were being developed, with a goal of being marketed by 2020. Such products would make traditional balancing and repairs obsolete, changing the industry completely.

According to industry statistics, there were an estimated 697 establishments primarily engaged in manufacturing pneumatic casings, inner tubes, and solid and cushion tires for all types of vehicles, airplanes, farm equipment, and children's vehicles; tiring; camelback; and tire repair and retreading materials valued at a combined $31.1 billion in 2008 with industry-wide employment of 27,341 workers. On average, each establishment employed 41 workers and generated $61.3 million in sales. States with the highest concentration, in descending order, were California, Florida, Ohio, and South Carolina.

Manufacturers of tires and inner tubes shipped $19.6 billion in goods in 2008. Tire and inner tube materials and related products manufacturers shipped $89.6 million, and pneumatic automobile tires manufacturers shipped $11.2 billion.

From a high of 321 million tires shipped in 2000, total 2009 tire shipments were expected to fall an estimated 16 percent to 246 million tires. The North American tire business recorded a major decline in unit sales of tires for passenger cars, light trucks, trucks, and busses because of a significant fall in demand as the economy worsened. Rubber World reported that the Rubber Manufacturers Association's Tire Market Analysis Committee projected a nearly 8 percent increase, or 11 million units, in 2010.

Current Conditions

Following two years of economic strain, U.S. tire demand began to rebound in 2010, but "material shortages" and "price increases" began to surface. One spokesman told ICIS Chemical Business, "Volatility remains in the area of raw materials, with some cost increases expected to exceed 35 percent in the second half of 2010." Part of the shortage was the result of carbon black suppliers who were hesitant to fire up idled units concerned they would get stuck with excess supply. Another chemical, butadiene (BD) used in the production of tires, was also in short supply, adding to the industry's woes. Nevertheless, both Bridgestone and Goodyear reported positive results for the first quarter of 2010. Goodyear's shipments grew 14 percent during the first-quarter of 2010.

According to the Rubber Manufacturers Association (RMA), U.S. tire shipments were projected to reach 296 million units in 2011, up nearly 11 million units over 2010 tire shipments. The original equipment sector for passenger tires forecast was lowered to 36 million units, up 8.5 percent compared to 2010 as a result of the earthquake and tsunami that hit Japan in May 2011 that caused a disruption in the automobile manufacturing supply chain. Demand for replacement passenger car tires was projected to increase nearly 1 percent to an estimated 202 million units in 2011, an increase of nearly 2 million units compared to the previous year. The bottom line was that consumers were faced with higher fuel costs that translated into fewer miles driven along with a recovering economy that left consumers cautious.

On April 20, 2009, a petition was filed with the U.S. International Trade Commission (ITC) on behalf of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers(USW) calling for an investigation into the alleged surge of Chinese imports under Section 421 of the Trade Act of 1974. ITC found tires imported from China grew 215 percent by volume and nearly 300 percent by value between 2004 and 2008. Consequently, over 8,100 tire industry jobs were lost by the end of 2009. President Obama declared increased tariffs on Chinese tires that would expand over a three year period that commenced on September 11, 2009. The 421 decision by the president marked the first time that the United States stepped in to impose relief to a domestic industry and its workforce.

Industry Leaders

Bridgestone Corp.
With $25.11 billion in 2006 sales, Bridgestone was the largest company in the industry worldwide. The firm retained its leadership position in the early years of the first decade of the 2000s despite having to recall millions of Bridgestone/Firestone ATX and ATX II Wilderness AT tires in the wake of accident-related deaths involving the Ford Explorer. Bridgestone Corp. marketed tires in North America through Nashville, Tennessee-based Bridgestone Americas Holding Inc. Bridgestone Corp. reported revenues of $35.7 billion in 2008 with 137,981 employees and operations that spanned 150 countries worldwide. Bridgestone posted $35 billion in 2010.

Bridgestone was a leading Japanese tire manufacturer, as well as a producer of bicycles, sporting goods, and various rubber industrial products, when it decided to merge its Bridgestone U.S.A. operations with Firestone Tire and Rubber Company in 1990. Bridgestone bid for Firestone against Italy's Pirelli in 1988 and ended up paying $2.6 billion for the U.S. firm.

"Bridgestone" is an English translation of its founder's name. The company evolved from a family clothing business that added a rubber sole to its line of footwear. A line of tires was introduced in 1923. After the Korean War, Bridgestone established tire plants in Singapore, Thailand, and Indonesia and formed a collaborative effort with Spaulding in the United States to make golf balls. In the 1980s, Bridgestone began tire production at a Firestone plant it acquired in Tennessee and a few years later it purchased the Firestone Co.

Firestone was formed in Akron, Ohio, by Harvey S. Firestone in 1900, and Ford was one of its early and regular customers. Later, Firestone encountered several problems, including defects in its steel-belted radial tires and alleged tax violations and illegal campaign contributions. These problems led to a period of retrenchment during which plants closed, employment dropped, and several businesses were sold.

Compagnie Generale des Etablissements Michelin.
Headquartered in Clermont-Ferrand, France, Michelin was one of the earliest producers of tires for bicycles and carriages and became the world's second-largest manufacturer of tires and inner tubes, with revenues of $23.1 billion in 2008. The company markets tires in the United States, Canada, and Mexico through its subsidiary Michelin North America Inc., which generates revenues of an estimated $8.3 billion with 23,500 employees. Michelin reported sales totaling $23.7 billion in 2010.

In 1863 two brothers who had operated a rubber products business for about 30 years formed a new company, developing a detachable pneumatic bicycle tire in 1891 and producing similar products for carriages and automobiles. In the early 1900s, Michelin pioneered tire design improvements, including the first tubeless tire and a low profile shape. The company soon added plants in Italy and the United States to its French production facilities. In the 1930s, Michelin marketed the first radial tire, which significantly helped tire traction and wear. U.S. tire producers did not follow Michelin's lead in radials until decades later.

Always a leader in Europe, Michelin broke into the U.S. market by selling its innovative radials to Ford and other automakers in the 1960s. By 1980 Michelin had four tire facilities in the United States. In 1989 Michelin bought the Uniroyal-Goodrich Tire Co., a firm formed when two struggling tire companies merged in the mid-1980s. Heavy losses for Michelin in 1991 resulted from the absorption of these troubled organizations coupled with a highly competitive tire market. Michelin anticipated the trend toward more efficient niche models with the development of the ecological tire in 1992. The company maintained its own rubber plantations in Nigeria and Brazil and was poised for continued expansion in North America.

The Goodyear Tire & Rubber Co.
Traditionally the global center of the tire and rubber industries, Goodyear made more tires than any other tire producer did for many years. Since most of Goodyear's domestic tire-making competitors were acquired by foreign firms by the mid-1980s, Akron, Ohio-based Goodyear became the only leading tire producer headquartered in the United States. In the middle of the first decade of the 2000s, Goodyear was third among the world's tire manufacturers, posting 2008 revenues of $19.4 billion and employing 74,700. The company reported sales of $18.8 billion in 2010 with 72,000 employees.

Goodyear was founded in 1898 by Frank A. Sieberling, who named the company after Charles Goodyear, inventor of the vulcanization process. By World War I, after making a variety of technical and practical design improvements, Goodyear had the largest tire sales volume of any company. Between the two world wars, the company survived some financial difficulties, developed production operations in four countries, owned and managed rubber plantations, and used the famous Goodyear blimp as a promotional tool. After World War II, Goodyear set up production facilities in six more countries and promoted the development of synthetic rubber. Goodyear addressed tough competition from Michelin's radial tire by developing its own design innovations, creating a new all-weather tire and expanding its interests into the field of gas and oil pipelines.

In 1986 a British financier attempted to buy Goodyear. To fend off this move, Goodyear sold its cotton growing and aerospace businesses, including its blimp manufacturing interests. Using those resources and borrowing heavily, Goodyear bought back $2.6 billion of its stock. After a slump in the early 1990s, the firm bounced back strongly through the end of the decade with innovative new products like the Aquatred premium-priced tire, renewed emphasis on the replacement market, distribution through mass retailers, and expansion into the emerging markets of Latin America and Asia.

Workforce

The tires and inner tubes industry employed 61,807 people in 2005, of whom 50,388 were production workers earning an average hourly wage of $23.24. The most plentiful jobs in the industry were in the production and maintenance areas. Research and development, production planning and control, accounting and finance, and information systems involved more technical expertise. Career paths could proceed from production operator to supervisor, department head, and plant manager. For example, a lateral move could be made from production supervisor to production control technician.

Opportunities for careers in the industry have generally been fewer than in other industries, largely because of relentless competition resulting from mergers and acquisitions and excess capacity. Meanwhile, most companies offset relatively high wages with a drive to keep prices low to gain or maintain market share, thus limiting employment figures. Nevertheless, some companies planned to increase prices and production capacity. Furthermore, at the top levels, opportunities were created for business leaders to help organizations overcome losses or unsatisfactory profit margins.

Unions.
The United Rubber Workers (URW) has represented employees at U.S. tire companies since the 1930s and 1940s. Firestone's union workers endured long strikes in 1936 and 1976, and in 1981 its URW members agreed to wage reductions. The URW instituted "pattern bargaining" to negotiate contracts in 1946. Having won modest concessions from the URW in the 1980s to help meet its competitive challenges, Goodyear came to a relatively generous agreement with the group in 1994. The URW expected Goodyear's largely foreign-owned competitors with U.S. operations and subsidiaries to follow suit, but many, including Michelin (whose anti-union stance is well known) and Bridgestone, balked at the demands. In 1995 Bridgestone hired 2,000 replacements for striking workers, prompting the URW to seek strength in numbers via a merger with the United Steel Workers, resulting in one of the largest, most significant strikes in the United States in the late twentieth-century and victory for the workers. In 1999 the United Steelworkers led a year-long strike against Continental General Tire's North Carolina passenger-tire plant, rejecting the company's proposed increase in shift hours from 8 to 12, claiming the production of large bias-ply tires with the plant's aging equipment required too much physical strain to withstand a 12-hour shift.

Research and Technology

Research in the early twenty-first century emphasized creating and improving the design and specifications of tire products to meet customers' needs and wishes, particularly durability. Although technical skills were always applied to production methodology and cost controls, operating efficiency has been a dominant objective in the 1980s, 1990s, and early years of the first decade of the 2000s because of intense competition.

Tire Design and Specifications.
Historically, research and technology were used to design better tire products for the purpose of developing strong competitive positions in the marketplace. Major breakthroughs included pneumatic tires for cushioning, removable tires for convenience, synthetic rubber to overcome material shortage, and radials to enhance durability and performance. Tire companies increasingly kept an eye on technological developments in the automobile industry. A future prospect centered on the development of tires with low rolling resistance for use with automobiles running on efficiency-based alternative fuels.

Goodyear and Bridgestone developed a tire that can run safely for 200 miles after a flat, eliminating the inconvenience and dangers of changing a tire on the roadside. While "run-flats" were in high demand at the beginning of the twenty-first century, the challenge faced by manufacturers centered on offering prolonged post-damage durability without sacrificing a smooth ride during the tire's regular performance. Goodyear also was working on microprocessors to monitor the tire's air pressure, temperature, and wear, which might extend a tire's life 15 percent. Meanwhile, Bridgestone developed a tire capable of healing itself upon being punctured. The tire design incorporates a polymer material, called Sealix, which liquefies and hardens around a tire puncture. Other research involved extending tire life, enhancing traction in adverse conditions, increasing fuel efficiency, and lowering auto emissions by reducing rolling resistance.

In early 2003, Michelin became a pioneer of sorts by announcing that it had developed a radio frequency identification (RFID) transponder for use in tires. Placed directly inside of tires during the manufacturing process, the small device was capable of storing a wide variety of data that made it possible for consumers to easily obtain detailed, specific information about their tires, including the date and location of manufacture, a unique tire identification number, the vehicle's identification number, tire size, maximum pressure, and more. According to one industry player, the device had the potential of making compliance with the new TREAD legislation more manageable. Initially, Michelin planned to include the transponder in tires on new vehicles in the middle of the first decade of the 2000s. The company also planned to make its RFID technology available to others in the industry.

At the end of the first decade of the 2000s, Goodyear incorporated Kevlar or commonly referred to as "volcanic sand" to its Goodyear Assurance Max tire that added to the overall performance and resilience over the life of the tire. More importantly, the tire was gaining traction with original equipment manufacturers. Some industry observers expected specialized tires would become a hot selling point with consumers, with tire manufacturers reaping the benefits of higher profit margins.

Environmental Concerns.
The tire industry's environmental efforts focused primarily on the reuse, recycling, and safe disposal of scrap tires. Reuse programs include retreading, a well-established niche of the tire industry, as well as new anti-erosion programs. Recycled tires are used in asphalt-based road coverings, shoes, household items, and even new tires. Nevertheless, hundreds of millions of tire discards went to landfills in the 1990s and early twenty-first century.

Some processes attempted to avoid the problem of scrap tires before it began. Goodyear patented a process that allowed around 80 percent of a tire's rubber to be recovered and reused in rubber products, including recycled tires. The specialized devulcanization process, whereby the tire's essential ingredients are broken apart from the sulfur and other tire components so that they may be reused, could generate dramatic waste reduction.

Manufacturing and Cost Controls.
Since the mid-1980s, when merger and acquisition activities dominated the industry, the intensified competition encouraged or required tire producers to reduce costs so they could trim prices and survive with slimmer profit margins. To cut costs, producers engaged in downsizing, eliminated inefficient plants, and streamlined operations. These cost improvement activities required the companies' technical staffs to design better production methods and apply computer techniques to save workers' time, speed processes, and improve quality. Most tire manufacturing facilities continued to involve handmade assembly by a series of workers, although many firms, such as Bridgestone, set a course to allow machines to piece together the various components, leaving workers to monitor the process and perform quality checks.

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