LACHEN, Switzerland (June 6)—Bandag Inc.'s European franchisees will supply Continental A.G. with truck tire retreads under a deal being finalized by Bandag A.G., the U.S. company's Swiss subsidiary, and Continental. Under an agreement in principle, Bandag's European franchisees will produce precured retreaded truck tires for Conti using Bandag retreading technology. The retreads—to feature Bandag tread rubber and Conti tread patterns—will be distributed via Conti's service network and Bandag dealers in Europe. Neither company commented on the financial aspects of the contract. The proposed alliance follows a Conti decision to outsource retreading operations because of high logistics costs, low volumes and problems of operating a centralized factory, according to Bandag, which has more than 250 franchised retreading plants throughout Europe.