RALEIGH, N.C. (May 14, 2008) — The State of North Carolina should consider multi-award instead of exclusive contracts for retreads, according to a new study commissioned by the North Carolina General Assembly Joint Legislative Transportation Oversight Committee.
It should also reconsider the policy of allowing retreading contractors to charge for up to three spot repairs for each tire and consider other kinds of retreads besides bead-to-bead-retreads, stated the study performed by Smithers Scientific Services Inc.
Rep. Nelson Cole, chairman of the committee, is using the findings of the Smithers study to have the wording changed for North Carolina's retread contract specifications.
But Bobby White, vice president of White's Tire Service Inc., the Wilson, N.C.-based retreader that is the exclusive supplier of rear-axle bead-to-bead retreads for eastern North Carolina school buses, said his company is being unfairly singled out for criticism and that its bead-to-bead tires can only be compared with new tires, not other retreads.
Cole's committee commissioned the study from Smithers in January 2007 after a state audit suggested that White's Tire had overcharged the state more than $361,000 on spot repairs. White's Tire said the audit was inaccurate and that it only charged the state for a fraction of the spot repairs it actually performed.
Michael L. Bair and Thomas M. Dodson, the Smithers executives who performed the study, presented the results before the committee in Raleigh April 24.
Bair and Dodson used field data, laboratory tests and dynamic testing to come to their conclusions. They determined that White's bead-to-bead, mold-cure retreads performed excellently in the field and the testing lab, but so did White's pre-cure retreads and the retreads from vendors, including Michelin North America Inc. and Bandag Inc.
“This high level of overall satisfaction holds true, regardless of the brand of retread in use,” they said in the study.
Bair and Dodson said they found no compelling reasons why there should be separate charges for spot repairs since these usually are included in the price of a retread.
North Carolina allows charges of $12 each for up to three spot repairs on each retread. But Bobby White said White's Tire averages nine spot repairs on each bead-to-bead retread it supplies the state. Nail hole and section repairs are separate line items, they said.
Retread contracts should not specify compounds, retreading technique, etc., but only such things as the number of retreads permitted, the maximum age of the casing or the number and type of nail hole and section repairs allowed, the study said.
North Carolina should also take a tip from other states and allow multi-award contracts for both new tires and retreads, it stated.
After the study was presented, the committee approved by voice vote Cole's motion to draft legislation rewording the state's retread contracts.
The bill should be ready soon after the General Assembly reconvenes May 13, according to Cole.
“What we found out is that they (White's Tire) were charging just about every bead-to-bead tire with three spot repairs,” Cole said. There was no way every bead-to-bead needed three spot repairs, he added, since “top-cap” retreads often didn't charge for any.
Cole said the bill also would make it unlawful for retreaders to buff the Department of Transportation identification numbers off the sidewalls of casings, as is usual in bead-to-bead retreads.
“Say we were to have a recall, like the tires on the Ford Explorer,” Cole said. “How are we going to identify them?”
According to Bobby White, the planned legislation is absurd, particularly the part about buffing off DOT identification.
“When we remove the information from a tire, it becomes our tire,” he said. “We provide the State of North Carolina and our other customers with free replacement and adjustment for road hazards. And with the repairs and prep we do, we feel we make it better than a new tire. If you put down bead-to-bead retreads, you also have to put down new tires.”
White said his company's adjustment rate is only about one-sixth of one percent, mostly for road hazards. Also, even charging for three spot repairs, White's Tire beats its competitors on both price and service life, he said.
“Our contract has always run smooth,” he said. “We've never had complaints. Some people say we have a monopoly, but there was never a monopoly. We go to the bid table, and we win the contracts fair and square.”
Ben Matthews, director of the Division of School Support for the North Carolina Division of Public Instruction, said he felt the Smithers study was well done, even as he praised the performance of bead-to-bead retreads from White's Tire.
“There were no surprises there,” Matthews said of the Smithers study. “The study just verified the kind of feedback we've always had from our school districts. Districts are pleased with the tires they buy, and that speaks well of the tire industry in North Carolina.”
At the same time, Matthews said, some districts will buy nothing but bead-to-bead retreads. “We've had a tremendous record with White's Tire,” he said. “I've been in this position 13 years, and I don't know if I've ever heard a single complaint about the tires from White's Tire.”
Matthews also had harsh words about Cole's plan to outlaw retreads with the DOT numbers buffed off.
“What a waste of time,” he said. “As soon as they buff the tire, the tire becomes theirs, and they know who made every casing they use. This is just a bunch of rhetoric.”