Q&A with Anne Forristall Luke, President and CEO, U.S. Tire Manufacturers Association (USTMA)
August 27, 2021
IRSG was pleased to have Anne Forristall Luke, President and CEO, U.S. Tire Manufacturers Association (USTMA), serve as a panelist at the 2021 World Rubber Summit. Here she shares her perspective on opportunities and challenges in the U.S. tire manufacturing industry.
Q. The automotive industry is expected to face considerable challenges resulting from sizable and durable transformation in the mobility sector linked to decarbonization commitments and significant disruption in supply chain compounded by the aftermath of the COVID-19 pandemic. Tire companies are increasingly positioned as mobility solution providers, which comes with the responsibility of collaboration in design, technology and data sharing, assuring sustainability, circularity and resilience. What are the major challenges and/or trends shaping the U.S. tire industry in the current business environment?
A. In 2020, the collapse in travel for work, pleasure and shopping sharply drove down demand for virtually all goods and services associated with travel. As a result, spending on both new and used light vehicles fell by nearly a third, while spending on tires fared comparatively better, only falling 15 percent from February to April 2020, while total consumer spending slumped nearly 19 percent.
But 2021 has seen a rebounding trend from our member companies, most of whom reported strong earnings in the first half of 2021. Bridgestone credited progress in addressing the COVID-19 pandemic and carrying out vaccination programs as a source of the quicker-than-expected fiscal turnaround, while Goodyear recently reported that its volumes are close to pre-pandemic levels across several markets. Hankook Tire also reported marked improvements in operating income and sales, based in part on business recoveries in North America and Europe.
In August 2021, USTMA issued its biannual tire shipment forecast projecting total U.S. tire shipments of 336.1 million units in 2021, compared to 303.2 million units in 2020 and 332.7 million units in 2019. This was the first forecast to predict tire shipments exceeding 2019 levels since the start of the pandemic.
As our momentum accelerates coming out of a turbulent year, U.S. manufacturers are creating a future as mobility solution providers as they invest in EV companies and AV solutions, while increasing the use of sustainable materials in tire manufacturing.
Several key trends are currently shaping industry growth:
- Digital Transformation. The accelerating pace of digital transformation continues, with the rollout of 5G technology and the shift to electric and automated vehicles gathering significant traction.
- Changing Societal Views on Mobility. COVID-19 disrupted social mobility preferences and accelerated existing societal shifts in mobility, such as a growing affinity for suburban living and greater reliance on e-commerce.
- Environmental Stewardship. Action on climate is a growing focus for consumers, investors, and policy makers. USTMA members are committed to reducing greenhouse gas (GHG) emissions throughout a tire’s life cycle in many ways, including improved rolling efficiency of new tires, increased re-use and recycling of scrap tires, and even lowering carbon output in the manufacturing process.
Q. With the U.S. administration approval of an enormous stimulus for infrastructure and energy efficient transport, do you foresee any major structural industry shift in the coming years in the US market?
A. In the recent Senate-passed Infrastructure Investment and Jobs Act – which was negotiated at length with the White House and garnered bipartisan support – there are many opportunities for the federal government to expand the scrap tire circularity market that simultaneously help our nation achieve our shared resilience and sustainability goals.
Most of these provisions serve to expand research and fill in data gaps regarding the use of rubber modified asphalt as an innovative pavement material and tire derived aggregate as infill for stormwater control systems. However, there are also provisions that provide federal support for the integration of these materials in new and existing infrastructure.
Additionally, with the Biden Administration’s push for electric vehicle expansion, we also see a growing potential for these stronger, efficient and longer-lasting roads as well as an expanded market for advanced tires that can withstand the added weight of an electric vehicle and help it literally go that extra mile.
USTMA believes this legislative package is a huge investment in our nation’s infrastructure overall and lays the groundwork for a future where virtually every tire enters the circularity market and advances in tire technology make our cars more efficient and even safer.
Q. In your opinion when is the US tyre shipment expected to reach pre-pandemic level?
A. As referenced above, in August 2021, USTMA issued its biannual tire shipment forecast projecting total U.S. tire shipments of 336.1 million units in 2021, compared to 303.2 million units in 2020 and 332.7 million units in 2019. This was the first forecast to predict tire shipments exceeding 2019 levels since the start of the pandemic.
Q. How does USTMA foresee supply chain partnerships addressing regulatory framework, tyre safety, environmental issues, capacity building and ELT management toward a more sustainable future?
A. Partnerships are essential to achieving the performance and sustainability objectives for the U.S. tire manufacturing industry. From a policy and regulatory perspective, we are actively working with partners in the following key areas, among others:
- Partnering with tire retailers and the Tire Industry Association (TIA) on tire safety and regulatory and legislative matters.
- Collaboration with other member organizations to advocate industry issues like infrastructure priorities and designation of “essential business” status during the COVID shutdown.
- Growth of scrap tire markets through opportunities to expand the use of scrap tires in infrastructure applications such as rubber modified asphalt. Specifically, we are working with The Ray (a nonprofit proving ground for sustainable transportation technologies) and the University of Missouri to highlight existing research on the economic impact, performance and environmental benefits of using ground tire rubber (GTR) in asphalt. We also are partnering with individual states to grow sustainable, circular markets for scrap tires.
- National Tire Safety Week, an annual consumer-facing tire safety campaign with participation auto safety-focused organizations across a range of platforms.
- Tire Information Safety Bulletins are issued regularly for use by tire retailers and repair shops ensuring safety standards are established for tire mounting and repairs.
- Materials regulatory issues including the International Zinc Association, the American Chemistry Council, and the International Institute of Synthetic Rubber Producers.
- Implementation of Toxic Substances Control Act (TSCA), around which USTMA leads a coalition of other product manufacturing trade associations to advocate for product manufacturing issues in TSCA implementation.
Q. With a strong membership participation of all leading tire companies, how does USTMA collaborate with other rubber associations as well as R&D organizations to address current rubber industry challenges? How do you envision better collaboration of rubber industry stakeholders and governments through global platforms to address current challenges?
A. To advance a sustainable tire manufacturing industry, USTMA’s members and the Tire Industry Project (TIP) launched the Global Platform for Sustainable Natural Rubber with a mission to lead improvements in the natural rubber value chain. This global organization includes stakeholders such as natural rubber producers, car makers, financial organizations and NGOs. USTMA routinely engages with TIP on research related to tire materials and global sustainability issues management, as well as with our sister organizations in Europe (ETRMA), Canada (TRAC) and Asia (JATMA and KOTMA). We believe that collaborations with these stakeholders can build and support a fair, equitable and environmentally sound value chain to meet the needs of our 21st-century societies around the world.
About the U.S. Tire Manufacturers Association
The U.S. Tire Manufacturers Association is the national trade association for tire manufacturers that produce tires in the U.S. The association’s 13 member companies operate 57 tire-related manufacturing facilities in 17 states and generate more than $27 billion in annual sales. The industry directly supports more than a quarter million U.S. jobs – totaling almost $20 billion in wages. USTMA advances a sustainable tire manufacturing industry through thought leadership and a commitment to science‐based public policy advocacy. The association’s member company tires make mobility possible. USTMA members are committed to continuous improvement of the performance of their products, worker and consumer safety and environmental stewardship.
For more information visit www.USTires.org and follow USTMA on Twitter @USTires.
