Maurice Taylor Jr. is realistic when he considers the relative importance of his company´s traditional core market, the agricultural sector.
If the tire industry is a "big dog," he said, passenger tires are the head and shoulders, sport-utility vehicle tires the body, and truck and bus tires the hind quarters.
And ag tires? "They´re the tip of the tail," said Taylor, who, when he´s not spouting metaphors, is CEO of Quincy, Ill.-based Titan International Inc., which specializes in farm and off-the-road tires and wheels.
That tail is Titan´s focus, and the firm is committed to achieving its goals by manufacturing its products in the U.S. While the trend has been for tire companies in North America to reduce capacity, Titan has increased domestic output in its main markets via its purchases of Goodyear´s farm tire and Continental Tire North America Inc.´s OTR tire businesses. It has run its own "Buy American" advertising campaign touting the quality of U.S.-made products.
Taylor, once considered a foe of labor unions, now has three solid labor pacts running into 2010 at Titan´s U.S. tire- making plants, including its flagship farm tire operation in Des Moines, Iowa.
A specialized company
Taylor, 62, realizes Titan´s all-American attitude may not apply to everyone. The Big Three tire manufacturers-Goodyear, Bridgestone/Firestone and Michelin North America Inc.-for example, are "$20 billion-plus companies playing in all the markets," he said.
Titan, on the other hand, is a "very specialized tire maker" operating within three segments-ag, earthmover/construction and consumer-and posting sales of slightly less than $680 million in 2006. About 90 percent of Titan´s overall business serves the North American market, Taylor said.
Last year Titan established goals of up to $825 million in sales and pretax earnings of up to $115 million for 2007. The Goodyear and Conti purchases and a thriving wheel business will drive the company to meet the shorter-term sales and earnings goals, but Titan also has to rely on its unique offerings to set itself apart.
Taylor pointed to Titan´s LSW (low sidewall) tire and wheel assemblies, unveiled in 1997. The LSW products offer a larger wheel and a lower tire aspect ratio than other off-highway designs, and illustrate the value of a company having expertise in both tire and wheel technology, he said.
Titan is the only manufacturer to specialize in both tires and wheels, Taylor said, and the company builds them to fit and work together. "We make the product for the end user, so he has an advantage."
The company´s ag tires-for vehicles like tractors, combines, skidders and plows-range from 8 inches to 85 inches in diameter and from 4.8 inches to 44 inches in width, according to the company´s 2006 10-K filing with the Securities and Exchange Commission.
The earthmover and construction tires used on skid steers, aerial lifts, cranes, graders, shovel loaders, haul trucks and backhoe loaders range from 30 inches to 109 inches in diameter and weigh from 50 to 6,200 pounds.
Titan´s customers also like the fact that Titan makes its tires and wheels in the U.S., he said, speaking well to the products´ quality. Taylor long has said the company´s goods aren´t the least expensive, but the price hikes routinely stick and customers are willing to pay for the best product, which he believes his people can make in the U.S.
"Look at what the price of labor overseas is today," he said. "The cost of labor is less than the freight. Companies are going to take advantage of that. But we like the way we´re doing things, making tires here in the U.S."
Titan has shown it intends to keep growing in the market via its capital expenditures over the past three years, as well. According to the 10-K filing, Titan spent $4.3 million, $6.8 million and $8.3 million in 2004, 2005 and 2006, respectively, for updating equipment, expanding manufacturing capacity and automation.
The company forecasted those figures to reach between $16 million and $18 million during 2007, the financial document said.
´A good ally´
No one may be more pleased with Titan´s commitment to manufacturing in the U.S. than the United Steelworkers. The union represents more than 1,200 workers at all three tire plants, and while the going hasn´t always been smooth, the two sides have developed a "pretty solid working relationship in the last couple of years," according to USW President Leo Gerard.
"We´ve found a good ally in Morry Taylor," Gerard said. "He wants to make tires in America, and he´s prepared to put money back into the business. He´s been prepared to work with us, and we even share some of the same views on trade."
Having a union chief say he shares opinions on trade with a manufacturing executive who once ran for president of the U.S. as a Republican is one thing. But having Gerard praise Taylor after the two longest strikes in U.S. tire and rubber history occurred at his facilities-at Titan´s Des Moines and Natchez, Miss., plants from 1998-2001-is something else.
Gerard said "those years are behind us." And Taylor said the work force at his tire and wheel plants are great-more than once he´s given his employees credit for the company´s success in recent years.
But the Titan CEO also is straightforward about how he wants to manage the business-and "by committee" is not the way. Plus, part of Titan´s return to profitability the past three years has been because it has become leaner, and that isn´t going to change. Total U.S. employment at Titan is down to about 2,700 after reaching about 5,000 in 1999.
"Paying workers per hour what they deserve is not the big battle," he said. "It´s saying that there´s no featherbedding here. If the railroad is making money, you don´t have the caboose at the end carrying nothing. We´re not letting someone just sit around. Everyone who´s here is going to work."
Titan plans to keep growing in its core segments, with an objective of 80-percent market share in each of them, Taylor said.
Within three years, Titan could be a $2 billion company, he declares.
If it meets those goals, Titan will do it because Taylor and the company believe they have what´s best for its customers, whether it´s the American farmer or the original equipment manufacturers. Titan has "been a little creative" when it´s had to be, he said, and it will continue to be.
Plus, Taylor believes that tire/wheel combination is hard to beat, even for a company operating at the tip of the tire industry´s tail. "We understand it here-you can´t change a tire without the wheel," he said.