AKRON—Gary Benninger knows what it will take for Amerityre Corp. to stop being seen as a company with an interesting technology and future potential and instead be regarded as a viable business.
“It's going to be when you transition from losing money to making money,” said the company's president and CEO. “That's the way I define it.”
That's not necessarily an easy feat for a company that has reported collective losses of nearly $50 million during its 13 years of existence on overall revenue of about $9 million. During that time the publicly held firm has been working on its polyurethane technology for various products, including an ongoing program to try to develop a viable PU passenger tire.
Benninger believes the Boulder City, Nev.-based business is making strides across its various product platforms. He came to Amerityre three years ago as chief operating officer and was promoted a year ago to succeed company founder Richard Steinke, who wanted to step down from the administrative side of the business to focus on the technology as a full-time consultant.
Benninger believed he could work with Steinke—who has spent his career trying to make a viable business out of his urethane know-how—because the Amerityre founder had a lot of energy and a good technology.
“He likes to work with the technology and polyurethane formulations,” Benninger said during an interview at the International Tire Exhibition and Conference, held recently in Akron. “We basically complement one another very well. I'm a little bit more on the organizational side, keeping all the balls in the air, and he likes to work on the advance projects.”
Attraction to Amerityre
Benninger originally was a research physicist, holding a doctorate in physics. He spent time in the military and then moved to NASA. He left there to work for about a decade in various engineering capacities at Ford Motor Co.
In 1983 he joined Magna International Inc. With the exception of a short stint at another company, Benninger spent most of the next 22 years at Magna in such posts as vice president of product development, corporate executive VP of research and development, and as division manager for the polyurethanes interior products division.
While at Magna he read about Amerityre's project to try to develop a PU car tire and decided to check it out for himself.
“It looked like something that Magna could be very interested in,” he said. “From time to time Magna got into new technologies, and when they got into new technologies, it would always be at a time when there was a paradigm shift in that product.”
His first impression was that there was enough test data on the car tire program that couldn't be overlooked. “It was something I felt (Magna) couldn't ignore. It was a pretty compelling story, so that's the message that I went back with.”
Several other Magna people went to visit Amerityre and felt the same way. “There wasn't anything negative going back,” Benninger said. “It was all positive.”
So one of Magna's groups was poised to start a program with Amerityre, putting Benninger in charge from the Magna side of things. “But when push came to shove the group within Magna was having financial problems, so they canceled the program,” Benninger said.
At that point, Amerityre offered him the chief operating officer post.
During his career Benninger had been part of large organizations at NASA and Ford. And while Magna is a multibillion dollar corporation, it's very decentralized, and Benninger liked the autonomy he had when running one of the firm's manufacturing operations.
“I felt this was an opportunity to do that again—a thin organization where you can get things done and make a difference,” he said. “On the other hand, I'm also a little bit of a sucker for technology and things I think have a chance to be a really great thing.”
Operating as a business
What Amerityre needs to do now is use its various products to get the firm into a position where it's profitable, the executive said. The company's five product initiatives are the foam tire, tire fill, solid tires, retreading and car tires. “Each one is in various stages of getting to the point where it's a commercially viable product,” he said.
Foam tires are the original product made from Steinke's PU technology and are commercially viable, in production for a number of years. The business was bolstered earlier this year when Amerityre acquired a significant portion of the manufacturing assets of Kik Technology Inc., a maker of foam tires that was well known in certain products such as wheelchair tires.
“That was something that complemented our current product line,” Benninger said. “It's just now starting to get back on track because (Kik) hadn't manufactured in about six months.”
The tire fill portion of Amerityre's business, which included fills based both on foam and elastomers, are commercially viable, the firm's CEO said. This year it has sold five lightweight fill machines—for which it then supplies material—and has about another half-dozen it is looking to sell.
Amerityre currently is aiming to push its technology to make solid PU forklift tires. Benninger said the company took its manufacturing process for the foam tire and adapted it for the solid tire, enabling firms to make PU tires that have better performance than their rubber counterparts but at an equivalent price.
He claims four companies have expressed interest, some that currently make forklift tires and others that buy and sell the tires but want to manufacture them.
The firm did sell a pour machine to China's Qingdao Qizhou Rubber Co. Ltd. to retread off-the-road mining tires using PU elastomer compounds provided by Amerityre. The Chinese company has delayed launching the project, though Benninger expects it to go forward within the next few months.
As for the PU car tire, on the plus side it did pass late last year the more stringent FMVSS 139 test for passenger tires. The tire, however, has had some traction problems that still need to be addressed, Benninger said, and the company is working on completing the equipment package for the manufacturing process.
Several unnamed tire and car companies—both domestic and foreign—have tested the tire, he said. Amerityre at some point plans to build a pilot production facility for the passenger tires but the firm may have to look at options on raising more money.
Benninger measures progress at Amerityre by how well the firm is moving toward getting these various products commercially marketable.
“That's how you measure R&D: is the product saleable yet?” he said. “If it's not, what are you going to do to get it there? Then, what are the dollar values of the sales? That's it. … To get the company profitable, we have to get enough of these out there, whether it's product, materials or the hardware to make these products.”