Superior celebrates anniversary with expansion

WARREN, Pa.—Superior Tire & Rubber Corp. has been quite fortunate since it was launched in the mid 1960s, experiencing far more ups than downs.

The producer of rubber and polyurethane goods developed a highly diversified manufacturing operation and product portfolio, and expanded regularly, which helped carry it through the lean periods, including the recession of 2008-09.

It is celebrating its 50th anniversary this year with typical Superior Tire flair—another expansion. This time it is adding a new production plant, located across the street from its long-established main manufacturing facility.

Superior Tire is adding the 27,000-sq.-ft. factory to boost its polyurethane pouring capacity almost two-fold, produce solid polyurethane agricultural tire and wheel assemblies as well as polyurethane track pads, used primarily for road construction equipment, according to Bill LeMeur, executive vice president of the Warren-headquartered company.

“We have had strong growth in those areas with new opportunities close to fruition,” he said, adding that the plant should begin operating in late June. It likely will have a work force of about 10 to 15 initially, and it is expected to grow.

Superior Tire also has an agreement in principal, although it has yet to be finalized, to add a fourth facility in Warren County. “The building is 33,000 square feet and in all likelihood will be dedicated to steel fabrication,” LeMeur said. “I do not expect ongoing operations in this fourth facility until very late 2014 at the earliest.”

Its main plant spans about 110,000 square feet, including second-floor offices, and the company's adjacent 17,000-sq.-ft. tech center houses the firm's testing and laboratory operation along with its accounting, engineering, sales and marketing groups. The work force for the tech center, main plant and the site that will open in June is about 270. Superior Tire recently launched a sales initiative in Latin America where it hopes to expand and is actively searching out customers, mainly in Columbia and Panama. It currently works with two key customers in Mexico.

Founded as a tire retailer, re-capper and molder of solid industrial rubber tires in 1964, Superior Tire was purchased in 1974 by Henri LeMeur Sr.—father of current President and CEO Hank LeMeur Jr. and Bill LeMeur—and he refocused the business as a manufacturer of specialty industrial tires.

One of its earliest successes was designing tires for floor scrubbers and sweepers where wet traction, chemical resistance and high load carry capability required specialty compounds. That helped set the company on its road to success.

After holding a number of positions at the firm, Hank and Bill LeMeur moved into the mid-sized firm's top slots in 1994, and they began leading it to greater growth and expansion into new markets. None of that success would have been possible without the energy and enthusiasm of a great group of employees, Hank LeMeur said, adding “every product challenge I have thrown at our team has succeeded in time.”

Superior Tire, which serves the global market from its facilities in Warren where it produces all its products, is privately controlled by the LeMeur family, but some key career employees who have made unique contributions to the firm have become shareholders.

Located in the heart of Marcellus Shale country, the company today serves a variety of markets, with material handling, construction, agriculture, infrastructure and mining topping the list. It develops about 200 new products a year, incorporating both high performance polyurethane and rubber compounds, some of which are based on new patents, Hank LeMeur said.

The driving force at Superior Tire for internal allocation of resources and the design of molds and products, as well as communication with its customers, “is that we offer technical excellence to give our customers a competitive advantage,” Bill LeMeur said.

As an example, he cited one instance where the company solved a rubber tire catastrophic failure problem—created by high speeds and heavy loads—with the use of polyurethane tires. “The customer not only eliminated what we believe to be a seven-figure warranty problem, but was able to double its work life guarantee to the market.” Its competitors have yet to follow Superior's course, he added.

While today Superior Tire is able to get meetings with most targeted original equipment manufacturers in the industries it serves based on reputation and past performance, that has not always been the case, according to Bill LeMeur.

It brought its first material handling OEM on board in the mid to late 1980s, but prior to that it could not get an audience with forklift OEMs. And it had to prove itself in the aftermarket sector where the company and its products had to outperform and take business away from established industrial tire and wheel suppliers to get noticed, he said.

Superior Tire pulled it off after a lot of hard work, LeMeur said, and was finally granted sessions with OEM engineering and purchasing officials. That worked well for the company in the short and long run, and the firm has used the strategy to its advantage in other sectors too, particularly the ag market, he said.

In the recession of 2008-09, the privately held firm suffered a 25-percent decline in sales, while new forklift and revenues from major lift truck manufacturers declined more than 50 percent, he said. But “we believe that our diversity in different industries helped to modify the sales decline.

“We took the opportunity of the recession to invest heavily in new and used equipment, in some cases paying 10 to 20 cents on the dollar for high performance equipment at auction.”

In part because of the organization it put together after Hank LeMeur became president in the early 1990s, Superior Tire grew through the outsourcing era from 1994 through 2004 when most competitors and many customers moved production to China. Superior Tire chose to remain a U.S. company and focus on American-made products.

During that period, “we lost our No. 1 customer four different times,” he said.

An advantage the firm always has had during any low periods is that its biggest customer has never been larger than 5 to 7 percent of its overall sales, Bill LeMeur said.

It lost virtually all of its seven-figure business from two different manufacturers of manlift equipment (a platform that is raised by a mechanical means) due to a competitor offering Chinese manufactured goods and lower purchase pricing, he said. “In fact, in one of those situations, prior to the loss of the business, we were told we must source a component from China. The outsourced component and Chinese inconsistent quality led to warranty problems that our customer had to absorb.”

The reshoring going on presently “is a welcome acknowledgement that the cost of a product goes beyond simply the purchase price,” Bill LeMeur said. “The cost of lead time and inconsistent product performance can be so much greater than a few percentage points price advantage.

“I believe societal costs, including labor in China, will continue to rise, reducing whatever price advantage exists today. Desire for made in America is one of the first things I hear as we have begun the Latin America sales initiative.”

Responding quickly to customers' needs is a key factor if a company is to remain successful, Bill LeMeur said. Whether it is answering a phone, an email or troubleshooting product performance issues in the field, he said, “we try to make it easy for people to do business with Superior Tire.”

By pairing responsiveness with technical excellence, the company has generally found success. In addition, he said, the firm has invested heavily in state-of-the-art machining centers and production equipment. “We have also invested in people. We have two remote sales people located in Charlotte and Los Angeles. We have two stocking warehouses in Chicago and Los Angeles.”

It has developed a technical services group over the last five years as part of its overall engineering group that works closely with the company's sales unit in servicing larger accounts with multiple contacts within the organization, LeMeur said.

The company's mining products operation is beginning to grow, focusing on underground mining equipment. “We work with an OEM and have recently been working toward developing polyurethane systems to meet U.S. MSHA flammability standards as well as similar standards in Australia and South America,” he said. “This is another example of offering technical excellence to give our customers, a global competitive advantage.”

Superior Tire's efforts have paid off in terms of growing revenues. Using 1995 as a starting point, he said the company has had a 375-percent gain in sales, a 225-percent increase in employees and added three new facilities. During that span, it has expanded into several new markets, including infrastructure, agriculture and mining.

“The future is bright for Superior Tire,” according to LeMeur. “The depth of our engineering contacts at key accounts is strong” as is the breadth of talent in the engineering and sales departments.

“As vendor of choice, Superior provides technical excellence that gives our customers a competitive advantage,” he said.

Superior Tire's strength on the manufacturing end is its diversity, its ability to mold both rubber and polyurethane, and its ability to produce its own tooling for its molding operation.

While the traditional material handling market offers room for growth, he sees greater and more immediate opportunities in the construction, infrastructure and agriculture markets, including selling the firm's products in Europe and South America.

Hank LeMeur noted the company has attracted a talented core of young professionals committed to the rubber and polyurethane industry, added state-of-the-art equipment, has a strong capital structure and produces recognized brands and innovative products. Because of that, he is confident growth will accelerate at least through the end of the decade.