... but not out
BOULDER CITY, Nev. — Richard Steinke has surrendered his titles of chairman and CEO at Amerityre Corp., but hasn´t given up his dream of seeing his company develop a viable polyurethane car tire.
Effective Sept. 1, Steinke became a full-time consultant for the company he founded in 1995, with Gary Benninger, previously chief operating officer, named president and CEO. A new chairman will be selected by the board of directors following the firm´s annual meeting, expected to be held in early December.
"I was spending about 50-60 percent of my time on administrative matters," Steinke said. "I turned 65 this past June and I told the board I didn´t want to do any more administrative duties."
For example, in a week not long before he stepped away from the CEO duties, Steinke said he spent two full days in meetings, and also had to meet with auditors. That meant that Steinke was spending about 25-30 percent of his time doing what he really loves: furthering Amerityre´s urethane technology so the Boulder City-based firm can complete development on its PU automobile tire.
"I need to be there answering all the problems and be more involved in the chemistry," he said. "Other people can run the company."
Steinke describes Benninger-who joined Amerityre in 2005-as more sales oriented but also someone with a background in urethanes. He served as director of technology development at automotive supplier Magna International Inc. from 1999 to 2005.
Benninger is putting together a new business plan for Amerityre, Steinke said, and will push the firm´s recently introduced tire fill material. "He knows polyurethanes. He has a doctorate in physics," Steinke said of the firm´s new president and CEO. "He´s a very intelligent person and has very good insight."
Status of PU car tire
It´s been more than three years since Amerityre´s PU passenger tire passed Federal Motor Vehicle Safety Standard No. 109, then the minimum performance requirement for new pneumatic tires. Since then, the company has been striving to meet FMVSS 139, the new tougher standard that will be taking effect.
Steinke´s also been busy working the past 31/2 years on developing a cost-efficient equipment package to produce the pneumatic PU tire, and applying for patents to cover it. He said he had to develop mass production techniques to handle the tire cords, adhesives for the cords, and determine how to suspend the beads.
He came up with a system that puts in the plies, belts and beads-held in place by a magnetic system-and then the urethane is injected with a "monolithic shot" for the molding process. He claimed that the "monolithic tire is the tire of the future," kept in liquid form until the catalyst kicks in and coming out "round to the mold and balanced."
"It wasn´t that difficult," Steinke said. "It was tricky, but we figured it out. If we made it the rubber way, it would have lost its efficiency versus rubber."
Steinke claims his system for making tires is more cost-effective than traditional rubber tire manufacturing in several areas. First, the energy costs would be lower, with just 3 kilowatts of energy needed to make his PU tire, compared with an estimated 60 kilowatts from beginning to end for a rubber tire.
Second, he said the equipment package to produce a million tires a year would cost $7 million to $8 million with his tire, estimating the expense at one-ninth of what rubber equipment runs for the same capacity. Additionally, he said labor and materials are cheaper, so "it will be better than rubber in all fields."
If Amerityre gets a tire to pass FMVSS 139, the next step will be to get companies interested enough to produce it. Steinke and Amerityre have said all along they don´t want to be a tire manufacturer. They want to license the technology and sell the equipment and chemical packages to companies making the urethane tires.
In the past year, Steinke said more than a dozen companies have come to the Boulder City facility to meet with Amerityre and discuss the technology. He believes that the best way to go forward is with a run-flat tire that takes advantage of the technology, rather than just putting out another standard, commodity tire.
Steinke maintains Amerityre is working with four tire companies, three for passenger tires and one for truck tires; three are interested in developing run-flats. He didn´t identify the firms, but said they are in the "top 15 worldwide."
He said, however, that the company would consider working with non-tire companies, as several urethane product makers and foreign auto companies have shown some interest.
Still a believer
One task Amerityre is done with for the time being is raising money, according to Steinke. He estimated the company has raised between $35 million and $37 million in cash since it was established-including $7 million this past spring.
Over the years, the company has racked up more than $45 million in losses, spending most of the money on technology development, while its traditional closed-cell specialty tire business generated about $6 million in revenue.
Steinke said the company will concentrate on building sales in its original specialty tire business this year, and added that the firm has enough working capital to finish the passenger tire development. And when it works with other firms on development projects, the partners pay the costs.
He isn´t surprised investors continue to be willing to put money into the firm, despite the fact that Amerityre has yet to produce a payback. "I have people who will put in millions more. They´ve come out to see what we´ve done," Steinke said. "They believed in me and stuck with me."
While admitting to some frustration that the process has taken longer than he anticipated, he still believes the urethane tire will become a reality, providing vindication for all the work that´s gone into it and a long-awaited return for patient investors. "I´m confident about it," Steinke said. "I´ve always liked urethane. I´ve spent most of my life with it. I positively believe it will happen."