Quiet flies the D
Page 73
If you've noticed an error in this article please click here to report it so we can fix it.
Last month Sumitomo quietly completed its acquisition of the tyre manufacturing interests of Dunlop amid excitement about the possible takeover of the ailing giant by the BTR group. A special correspondent explains how the famous tyre brand will continue under new ownership
ONE effect of the recent publicity about Sir Michael Edwardes's attempted rescue to Dunlop Holdings has been to compound widespread confusion about the position of the Dunlop tyre interest.
For little more than a month the tyre and manufacturing operations of Dunlop have been handled by SP Tyres UK, a new company wholly owned by Sumitomo Rubber Industries of Japan.
The brand name "Dunlop tyres" and flying D logo will continue to be used under a licence agreeement with Dunlop Holdings.
Dealings between Dunlop and Sumitomo are not new. In 1905 Sumitomo started manufacturing Dunlop tyres under licence. Since then Japanese company has marketed all Dunlop products throughout the Far East.
Sumitomo Industries, the parent company, is numbered 13 in the list of the world's biggest companies. Its annual turnover of $61 billion derives from interests extending from shipbuilding to banking and includes sole agencies for marketing the products of such well known companies as those of Schweppes and 3M.
Before the takeover of the UK company, Sumitomo had rescued Dunlop France from bankruptcy and saved the French factories from closure. As a result it now owns the Dunlop name in France and the manufacturing rights to all Dunlop product lines there (including Dunlopillo) as well as tyres.
The final stage of the takeover was completed in January 1985 with the acquisition of the UK and German tyre operations and the formation of the new company in the UK headed by managing director Gerry Radford. This now gives Sumitomo a European operation based on seven manufac turing units (two in France, two in Germany and three in the UK) and a European sales network covering the whole of the Continent.
Not included in the takeover are the tyre distributor networks (National Tyre Service in the UK) or the tyre companies in India, South Africa, Nigeria, Zambia, New Zealand and the USA. These remain under the ownership of Dunlop Holdings.
Sumitomo's plan for the new tyre operation. in Europe includes rationalisation of production across the seven plants. For Dunlop will be the sole manufacturing source in the UK for heavy truck radials, producing the 11R 22.5 range for worldwide markets and heavy truck radials for the UK market. This includes around 70 per cent of the company's existing contracts for original equipment supplies to British truck makers. About 40 per cent of the output will go to the USA.
European market requirements for six-ply van tyres will be produced along with car tyres for the UK market.
Patricroft factory near Manchester will continue to produce heavy truck remould tyres only.
The two plants in Germany will meet European requirements for eight-ply van tyres and for 12R 22.5 heavy truck radials, and the German market requirements for other truck sizes.
Two factories in France will supply light truck radials and 17.5-inch tubeless tyres for the European market.
The management structure for SP Tyres UK Ltd does not include any Japanese names. Sumitomo will provide direciion and guidance on its management philosophies, but intends to leave day-to-day affairs in the care of British or European nationals.