KAMUELA, Hawaii (March 14, 2008) —Titan International Inc. has produced only one prototype 63-inch radial off-the-road (OTR) tire and already Chairman and CEO Maurice “Morry” Taylor Jr. is putting the world's OTR tire industry on notice.
“In the next 18 months, we not only are going to make the current designs, we are going to build something that will make them all obsolete,” Mr. Taylor said bluntly Feb. 22 in his keynote address at the Tire Industry Association's annual Off-the-Road Tire Conference in Hawaii. “I figure that way it'll keep everybody on their toes.
“We're also going to turn around and we're going to make them so they are not a commodity but they're an engineered system.”
Titan, he noted, is the only company in the world that makes both tires and wheels for the farm and OTR tire markets.
While Mr. Taylor provided few details about how Titan's OTR products will be different, the CEO made it perfectly clear that the company will be a big player in the market.
He's so confident, in fact, that even with the first prototype 63-inch tire still warm out of the press at the firm's Bryan, Ohio, plant, Mr. Taylor's expanding his production plans. (See photo at right.)
Originally, he envisioned making 6,000 of the ultra-large tires annually, but, as he put it, “I missed the mark. We'll have capacity to produce 15,000 63-inch tires,” he said.
Since the market likely can't use that many tires, Titan will fill every other size, he added.
Coinciding with Titan's entry into giant, 57-inch and 63-inch, radial OTR tire production, Mr. Taylor sees an end to the OTR tire shortage that's plagued the industry the past few years.
“I think you can say the current OTR shortage will diminish in the first quarter of '09,” he said.
But that doesn't mean demand will slip, he added. “Things are going to be pretty damn good. But I do believe this shortage is going to go away.”
Mr. Taylor predicted the farm tire segment is “ready to rocket, too,” and Titan is preparing for this as well.
The company just announced it will add approximately 38 agricultural tire curing presses, ranging in press sizes from 85 to 100 inches, at its tire facilities to increase capacity for larger size farm tires.
Titan makes agricultural tires at all three of its U.S. plants, in Des Moines, Iowa, Freeport, Ill., and Bryan, but the tire maker has threatened to move some farm tire capacity out of Freeport unless workers there agree to some workplace changes to make the plant more profitable.
The new presses should be installed by August to ease shortages in the large agricultural tire segment, the company said.
Mr. Taylor did not disclose what investment the company will make in the new farm tire presses.
The company has budgeted at least $30 million to fund the installation at Bryan for the large OTR tires.
In discussing Titan's OTR tire plans in his speech, Mr. Taylor said the OTR tire business is ripe for change.
“Your bobcats and skid steers are 16.5 inch. Folks, that's 1960s. It hasn't changed (since then),” he said. “If you're a little older like Bob (Purcell, the 73-year-old chairman of Purcell Tire & Rubber Co.) and myself, the backhoe is 24 inch. Same wheel, same everything from 1947.”
This is all going to change, he said.
“What we're going to do is going to affect all of you in the aftermarket. Because you see, to make money you have to change. Otherwise you're just selling a commodity.”
The way to do this is to be innovative, come up with something new. “And that's what we're planning to do, and I think we proved it by doing the 63 inch,” he said.
Mr. Taylor said people ask him why Titan chose to enter the 63-inch OTR tire segment—why not just go to 49-inch tires?
“It's really simple,” he said. “If we went and did 49, if we did the 51-inch radial or if we did the 57, then my friends at Bridgestone and Michelin would say, 'Well you see they can't do the 63.' Well, we might as well put it all to rest real quick. We're going to do the 63 and by the time they get done having meetings trying to figure out what we're doing, we're going to have a 73.5 up. So welcome to our world.”
Mr. Taylor said one reason Titan will succeed in the estimated $2.5 billion OTR tire market is that the company is focused on farm and OTR tires and wheels while he claimed larger competitors Goodyear, Bridgestone/Firestone and Michelin North America Inc. are driven more by car and truck tires.
To illustrate this point, Mr. Taylor showed a picture of three dogs representing these three firms. In all three cases, the head and body of the dogs represented these companies' focus on the auto, sport-utility vehicle and truck tire business, with OTR and ag relegated to the tail.
At Titan, the dog's head and body are represented by ag and OTR evenly, with the tail relegated to brakes and consumer tires.
“Whether it's the Michelin dog, Goodyear or the Bridgestone dog, the bad part of the dog is the teeth and those three dogs have to worry about each other.” Mr. Taylor said. “And if you notice, the tail just wags along and nobody pays much attention to it.
“So being a soul who doesn't much like the front end of the dog, I would much rather concentrate on the tail.”
Mr. Taylor cited the speed and entrepreneurial spirit in which Titan was able to develop its 63-inch OTR tire. It took only seven months to erect a building in Bryan and to produce the first prototype tire, he said.
To help accomplish this, the company hired a number of “real good retired engineers” from the big tire companies. “The problem you have in a business like ours is…you've got to get them out of the mold of a big company,” Mr. Taylor said. “You've got to get them to where they make decisions themselves. You take a risk and you go.”
The company also hired 14 new young engineers and also brought Titan wheel engineers into the mix. “Why do you bring the wheel boys in? Because they don't think like the rubber boys. And the tire doesn't work without a wheel,” he explained.
He also showed the team the movie “Patton” to help them understand what it takes to get the job done against impossible odds.
Gen. George Patton led from the front, he said. “He just reminded his troops of what they could do. 'Don't look and say you can't. All you can do is give the effort and make the effort.' And it was the same with this project.”
Without going into details, Mr. Taylor said he expects the new Titan 63-inch low-profile radials will offer 20 percent better tire life than the current radials mines are running, claiming the Titan tires are safer and more cost-effective to produce, and also can be retreaded.
In addition, the tires will have 30 to 40 percent less of a sidewall bulge than current Michelin and Bridgestone products and will feature a different tread pattern.
To test these behemoths, Titan has built a 24-foot diameter bull wheel capable of loading a 63-inch tire up to 500,000 pounds.
“We can test the carcass of the tire in 10 days to find out whether it will fail or survive out in the field,” he said. “No one has a bull wheel of this size.”
Along with the new giant radial OTR sizes, Mr. Taylor said the company's new design also will replace current bias tires, and the firm also is developing new underground tires and wheels.
Mr. Taylor said Titan will have capacity starting July 1 to produce 150 of the 63-inch tires with production ramping up to 500 units by Dec. 31. In the third quarter, he expects to begin building 73.5 inch sizes.
In ending his speech, Mr. Taylor hinted that his retirement is on the horizon. “Like fireworks, I am in the grand finale of my career in wheels and tires. So hopefully I will leave with a real bang.”
He elaborated on that during the question and answer session following his speech.
Asked whether he foresees the use of any other materials besides steel and rubber to make an OTR tire, his response was typically direct.
“I'm not going to be around so I don't care. I've got maybe another 18 months of being…in this and then it's time to turn it over to the younger ones.”