5 questions with Yokohama's Jeff Barna

In the wake of a turbulent 2020—defined, of course, by the COVID-19 pandemic—the tire industry saw plenty of reasons for optimism in 2021. The industry, overall, rebounded as sales, particularly those in the replacement markets, grew.
As 2022 begins, Yokohama Tire Corp. again sees reason for optimism, even as supply chain challenges persist and the "new normal" that defines a post-COVID-19 environment continues to take shape. Jeff Barna, president and CEO of Yokohama Tire, discusses where the company has been, where it is today and what it expects from the year ahead.
The following 5 questions are excerpts from the Q&A provided by Yokohama.

Jeff Barna: As a practice, I prefer leading with successes, of which there are many. From an impact standpoint, I would say that we are most proud of our relatively significant market share advancements in consumer replacement in 2021. We're convinced that our progress with share growth is a manifestation of our strategic planning and tactical priority setting coming together as we worked through the headwinds of 2020. We feel as if we have been, and continue to be, keenly aligned with our customers and their requirements. Also in 2021, we hired Philip Calhoun to run our truck/bus tire plant in West Point, Miss., while also promoting Stan Chandgie to executive vice president of sales for YTC. Both of these key personnel moves will further enhance our people-focused agenda to be the best supplier in our space.

In respect to challenges, we are paying particular attention to the effects that a post-COVID work environment has on our culture. By design, YTC is a high touch, family-oriented business, so protecting those values is critical to us. Ensuring that outside factors like limiting travel, abbreviated attendance in our offices, etc., do not affect what we believe makes us different.

Barna: We met or exceeded expectations from a product launch and R&D perspective in '21. In respect to the latter, we continue to invest in personnel, technology and equipment at our tech center in Charlotte to de-emphasize our reliance on Japan's R&D's capabilities. This should, as you might imagine, foster speed of development, help drive existing product improvements (upgrades) while also building out new OE capability for North American OEMs.

In respect to our industry's supply chain dilemma, I believe those projecting a return to normalcy in 2022 might be a bit too optimistic. To understand the true depth of this breakdown, one would need to peel back the dozen or so layers that have contributed to the malaise. As an example, knowing that we have a problem with the 85+ steamships anchored off the Port of Long Beach is only the tip of the 'macro' iceberg.

Understanding the micro factors building up to this backlog would require a deep analysis (and recovery projections) of microchip shortages, plant shutdowns, labor unrest at the ports, driver shortages, excess container complications, potential freight company arbitrage, market supply/demand and more. The point here being that even if some or most of these are remedied in the near future, it will likely be 2023 before re-alignment of all variables is achieved.

Barna: We believe that demand once again will outstrip supply, so we anticipate no changes on the importance of working even closer with our channel partners on demand planning and forecasting. Overall, '22 is shaping up to be another solid growth year for us, but maintaining our focus on resilience and agility is paramount.

Barna: To me, trends, by definition, relate to activities and behaviors (and their corresponding investments) resulting in a change of trajectory. To that end, I do not see anything remarkable that will arise in '22 that has not already been contemplated in the past.

In respect to ongoing business changes worth watching, I'd say the movement toward further manufacturer environmental stewardship (carbon neutrality), the need for heightened tire industry governance on legislation and tire particulates, and the phenomena of supporting the emphasis of 'last-mile' products and services are of keen interest.

The final piece here is also tying to the EV fleet transformation moving forward. Oh, and consolidation–there seems to be an inordinate amount of M&A activity in this market, but again, not a new trend.

Barna: Yes, we are actively defining our EV agenda while scoping both our design and manufacturing capabilities for the future. Of course, this is a pretty monumental undertaking because of the need to stay in the moment (serving all current market needs) while simultaneously trying to predict future legislation mandates, OEM production priorities, plus consumer preferences for the foreseeable future. We also are planning our launch into the van tire segment, which is an excellent segue into addressing our last-mile delivery logistics strategy. This as well dovetails into the future of our EV strategy.