Hill: ContiTech brand continues to make progress

FAIRLAWN, Ohio—Customers of the former Veyance Technologies Inc. business overall have taken fairly well to having the Goodyear Engineered Products brand name go away in favor of the Continental ContiTech moniker, according to Jim Hill, CEO of ContiTech's NAFTA operations.

Having to make the name change after Germany's Continental A.G. completed its purchase of Veyance and began integrating it into its ContiTech business was a fundamental change, Hill said.

“Being Goodyear Engineered Products for all of those years and having that brand so well established, it took a lot of years to get to that point,” he said during an interview at the Hose Manufacturers Conference, held Nov. 11-12 in Fairlawn. “Then to have it go away was a big challenge for us.”

The combined business spent a lot of time and effort to make everyone—from distributors to end users—aware that the Goodyear Engineered Products brand was being changed to Continental ContiTech, Hill said. The first ad campaign in February and March was called “More is Here” and targeted primarily at the distributor network.

The latest ad campaign, “More Ability,” focuses more on getting the new brand out to the end users.

“I think the change has been pretty good for most of the products that we have in the marketplace,” he said. “The most challenging ones we've had are markets where ContiTech had business here prior to the Veyance acquisition: conveyor belting and the automotive aftermarket, where the Continental ContiTech brand was known by the end users quite well.”

It's been easier in power transmission and industrial hose lines, where it was a basic switch to the ContiTech name, and that seems to be well-accepted.

The big challenge in the automotive aftermarket business has been that Goodyear Gatorback was a well known brand, but it was owned by Goodyear. So ContiTech had to go with Continental Elite and try to build awareness for that name.

That has led to some dropoff in business, though that wasn't unexpected.

“As we tried to convert in the marketplace, we had to go out to all of our (warehouse distributors), all of our installers, and take the Goodyear Gatorback out and replace it with Continental Elite,” Hill said. “That was a monumental task that took us several months through late spring and summer to get that to happen. So while our resources were focused on trying to change over or convert the brand in the marketplace, the efforts to then go out and sell and grow the business were limited.”

What has made the transition more difficult in the automotive aftermarket is that there are several tiers between ContiTech and the ultimate consumer. On the industrial side, though, most times the firm is selling direct to an OE customer, a mining company or a distributor, so there are fewer layers to have to communicate through.

The first time the ContiTech NAFTA CEO said he had heard a lot of people talking about an industrial recession here in the U.S. was at the recent Power Transmission Distributors Association annual convention. ContiTech has seen an impact in its business from downturns in the mining sector and the various areas of the oil and gas industry.

“It's no secret that a lot of coal companies have declared bankruptcy,” Hill said. “The coal industry is the largest market for conveyor belts in North America, and when you have as many companies going bankrupt or in the process as you do today, it's difficult.”

He said ContiTech has taken some market share, so its conveyor belt sales aren't down as much as they could be. “Our sales are way down, no doubt about it, but not to the same degree as the market is,” Hill said.

In the oil and gas sectors the firm's hose business is a big player, but the industry has many different markets and channels, from exploration and drilling to refining, distribution and dispensing.

“What's really slowed down right now is the exploration,” he said, “so our hose business in the sectors that we play in there has slowed down as well. But hose is a very diversified business, so hose is not as reliant on oil and gas as conveyor belting is reliant on mining.”