Dunn Tire raising money and awareness for Children’s Miracle Network Hospitals

All 31 Dunn Tire retail locations across Central and Western NY and Northern PA are participating in a fundraising effort to raise money for the Children’s Miracle Network Hospitals.  The Children’s Miracle Network is a network of hospitals around the country that specialize in care for children. Very importantly, they provide charitable care for sick children who do not have the financial backing of insurance. They do not turn children away. They accept them without regard to insurance coverage.

The fundraising effort runs from May 1 through May 31, 2012.  A donation of $1 or more enables the supporter to add a personalized balloon to each Dunn Tire in-store display.  “Each and every donation counts” said Chuck Haring – Director, Marketing & Advertising for Dunn Tire.  “One visit to these hospitals makes you understand the enormity of their importance. As you watch a 3 year old girl wheeled out of a room with an IV in her arm, your perspective immediately changes. This is a great organization, and people who donate should take comfort in knowing that all of the money raised goes directly towards helping children in their local community.”

Children’s Miracle Network Hospitals was founded with two simple goals: 1) Help as many children as possible by raising funds for children’s hospitals, and 2) Keep funds in the community in which they were raised to help local children.  These non-profit children’s hospitals rely heavily on contributions and fundraising efforts such as this promotion.

100% of the money raised by Dunn Tire will go directly to local hospitals in Erie Pa, Syracuse, Rochester, and Buffalo, NY to help children in need.  These hospitals include:

• Syracuse – Golisano Children’s Hospital at University Hospital
• Rochester – Golisano Children’s Hospital at the University of Rochester Medical Center
• Buffalo – Women & Children’s Hospital of Buffalo
• Erie – Saint Vincent Health Center

To make a contribution to Children’s’ Miracle Network Hospitals, please stop by any of the 31 Dunn Tire retail locations.

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Come Join the Mountain Goat Run in Syracuse

We are proud to again sponsor the 34th Annual Dunn Tire Mountain Goat Run on Sunday, May 6th in Syracuse.  This is definitely one of the greatest runs in New York State and a fantastic annual event in Syracuse.  The 10 mile course passes through several beautiful parks as it challenges runners with its steep hills.  In fact, the elevation gain is +565 feet.  If you’re a runner and have not yet participated in the Mountain Goat Run, you should register now.  Top prize winners for the men’s and women’s groups will take home $1,500!

The Mountain Goat Run is operated by the Mountain Goat Run Foundation, Inc., a non-profit company, with support from the City of Syracuse, The Syracuse Track Club, Fleet Feet Sports and many fine local, regional and national sponsors.

The scenic course winds its way through Thornden Park, Kirk Park, Onondaga Park, part of Syracuse University, and the streets of downtown Syracuse.  There will be at least five water stops on the 10 Mile Mountain Goat course.  Each water stop will offer water, energy drinks and energy gels.

This is truly a family event.  The race concludes in Clinton Square with a post race party!  Enjoy live music from this year’s band, The Blacklites.  There’ll be a wide assortment of fresh fruits, food, and beverages.  This is always a great time.

For complete details on the Mountain Goat Run, visit the official Mountain Goat Run website.  We hope to see you there!

 

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How Import Tariffs Impact Tire Pricing

In the second installment of this topic, we explored how oil prices directly affect the price of tires. In particular, we examined how global events can create fear of a potential disruption in our supply of oil. This type of market speculation drives the oil prices higher.  Since synthetic tires are produced with oil, the raw materials cost adversely affects the final product price. If you’ve purchased tires recently, you know that prices have skyrocketed compared to the last time you bought them.  If you need to buy tires, be prepared to experience sticker shock. Over the last three years tire prices have increased an average of 70%.  According to Tire Review, “we are seeing twice-annual tire price increases, and these are ranging from 5% to 12%.”  In other words a tire that was $100 at the beginning of 2009 is probably listed around $170 today.  From 2005 to today “the same tire costs about 87 percent more.”

As we’ve discussed in past articles, the primary factors currently influencing tire prices are rubber supply, oil prices, tariffs, emerging markets, supply and demand, and the proliferation of tire sizes.  This article will examine how tariffs on imported products have affected tire pricing.

What is a Tariff

According to Export.gov, a “tariff or duty (the words are used interchangeably) is a tax levied by governments on the value including freight and insurance of imported products. Different tariffs are applied on different products by different countries. The average duty worldwide is about 5 percent… Tariffs and taxes increase the cost of your product to the foreign buyer and may affect your competitiveness in the market.”

Tariff on Chinese Tires

In 2009, the Obama Administration implemented a steep tariff on imports of Chinese-made tires.  The tire tariff was structured with a 35 percent duty the first year, 30 percent the second and 25 percent the third.  This is in addition to the 4% base tariff. The intent of this regulation was to protect American jobs and save the tire manufacturing industry in the US.  According to Market Watch “U.S. imports of Chinese tires rose from 14.6 million in 2004 to 46 million in 2008, accounting for about one-sixth of the U.S. market. Four U.S. tire plants have closed in the past two years (2007-2008) and more than 5,000 workers have lost their jobs.”

There are a couple of issues to this tire tariff.  The first is that “U.S. tire manufacturers years ago decided to move production of low end tires off-shore,” said David Spooner, a lawyer representing the Chinese tire industry. “Frankly, a temporary tariff is not going to get them to change their business plan.”  Most large manufacturers have several international tire facilities.  So what is not produced in China can readily be made in South Korea, Thailand, Indonesia, etc.

The second issue and perhaps more crucial is that since “cheap” Chinese tires are no longer inexpensive, other manufacturers do not need to cut tire prices to stay competitive.  The Obama Administration has pledged to “crack down on China” and “work to ensure that China is no longer given a free pass to undermine U.S. workers”.  According to U.S. Trade Representative Ron Kirk “enforcing trade laws is key to maintaining an open and free trading system.”

As reported by Reuters, it’s important to note that “no American tire manufacturer supported the case and one, Cooper Tire, publicly opposed it.”

Marguerite Trossevin, who represents a coalition of U.S. tire companies that import Chinese tires, said the tariff decision is “very disappointing.” She predicted price increases for U.S. consumers and losses for U.S. tire importers. “For the U.S. tire distributors and consumers, there’s going to be a heavy burden to bear,” she said. “It sends the message that special interests will get protection if they ask for it — regardless of what that means for broader trade policy.”  She also added “you don’t keep jobs here by forcing companies into unprofitable lines of business… the president disregarded the interests of thousands of other American workers and consumers.”

Impact of the Tire Tariff in 2012

In his 2012 State of the Union speech, President Obama pointed out that “over a thousand Americans are working today because we stopped a surge in Chinese tires.”

U.S. China Business Council President John Frisbie disputed the president’s assessment on the success of the tariff. “We disagree that the tariffs on imports of low-end Chinese tires have had any positive effect on American jobs or the American economy. All evidence suggests that the beneficiaries have been other low-end tire producers in Asia and Mexico,” he said.

Bob Ulrich, editor of Modern Tire Dealer, says tire prices are “up 29% in the replacement market since 2009”. Large increases in shipping and raw-material costs have contributed to the rise, as has recovering consumer demand in the U.S. “All this shows that tariffs on Chinese low-end tire imports likely have nothing to do with creating American jobs.”

While tire imports from China have declined since 2009, as you can see from the chart on the right, tire imports from several other countries are up.  This confirms that if “it doesn’t get built in China and it’s too expensive to make in the U.S., it will get made in a cheap locale somewhere else.”

According to John Bussey of the Wall Street Journal, the tire tariff was meant to “whack imports of passenger and light truck tires and give a boost to manufacturers and job creation in the U.S.  Yet, for a variety of reasons, it has apparently done little of either – and has surely raised prices for consumers.”

Closing Thoughts

There are obviously differing views on the success of this tire tariff.  Has it created new jobs and opportunities in America – or has it done more harm than good?  It will take more time to truly measure the full impact of this regulation. The tariff on Chinese tires is scheduled to expire this year.  As an election year, it will be interesting to see if the tariff will be reviewed and extended.  We will do our best to monitor the situation and keep you informed.

Stay tuned for our next segment which will investigate the role of supply and demand in emerging markets and the direct impact on local tire prices.

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