A missed opportunity and a major miscalculation doomed Pirelli Group to years of trouble in the U.S. Now the Italian tire maker is taking a big step toward making a serious run at the market.
Pirelli failed in its bid for Firestone back in 1988, losing out to Bridgestone Corp.'s superior wherewithal. So the Italian company, desperate to get a U.S. manufacturing presence but with few opportunities left, bought Armstrong Tire, an aftermarket supplier.
What an error. Thirteen years later, Pirelli has just closed the last of the old Armstrong plants and has nothing to show for its purchase other than a painful lesson—but a lesson it seems to have learned.
With its new Modular Integrated Robotized System process, Pirelli can place manufacturing wherever the market demands, which in this country is the South. Putting the high-tech facility in Rome, Ga., is an example of Pirelli's improved strategy, and the recent opening of an original equipment sales office in the Detroit area is another logical step.
This follows the equally wise move in 1999 of cutting a deal with Cooper Tire & Rubber Co. that plugged Pirelli into Cooper's North American sales and distribution network.
Pirelli's leaders knew all along that no foreign company can make it big in North America without having an OE presence. It took awhile, but now they seem to have figured out how to do it.