Where the rubber meets the road

Ohio lawmakers to military: Good year to seek second tire supplier

Hah, hah. Get it? “Good year” to seek second tire supplier. Get it? “Good year“?

Here’s what the Strykers currently spin, the Michelin 1200R20 XML:

Is that a great pic, or what? Taken by Murdoc at the 2005 Auto Show in Chicago. More Stryker pics here.

Here’s the story:

Buckeye State lawmakers have inserted language into the Senate’s version of the fiscal 2006 defense authorization bill that would require the Army to study whether it needs a second supplier of tires for Stryker combat vehicles.

The Senate passed the amendment, sponsored by Republican Sens. George Voinovich and Mike DeWine, by unanimous consent and without debate last month. But both the Army and its current supplier, South Carolina-based Michelin North America Inc., say tire inventories for the eight-wheeled, 20-ton Stryker, a relatively new Army combat vehicle used extensively in Iraq, are sufficient to meet future needs.

And

In response to assertions that Michelin may not be able to meet the Army’s demand on its own, a company spokeswoman said “nothing could be further from the truth.” Michelin can produce as many as 60,000 Stryker tires annually, but officials anticipate the Army will order around 20,000 tires next year for both new and older Stryker vehicles, the spokeswoman added. By 2010, Michelin expects the annual demand for tires to dwindle to 6,000.

If what the Army projects is accurate, isn’t Congress trying to require the Army to conduct a study on a problem that doesn’t exist? Who’s going to pay for that?

Comments

  1. Hah, hah. Get it? ‘Good year’ to seek second tire supplier. Get it? ‘Good year’?’ WOW, Murdoc….. That really was a GOOD RICH joke!

  2. It seems to me, if you only have one supplier for a good, they can charge you pretty much how much they want and you have to suck it up. Those of us who like free markets believe competition is important :) Even if Michelin can keep up with demand, depending upon how much it costs for someone else to develop their own version, it could end up saving money in the long term. Or costing extra – dunno. Depends on how badly they get ripped off on the study.

  3. Toejam: I didn’t write it, though that’s the sort of thing you guys probably expect from ol’ Murdoc once in a while. That was the actual headline of that article… Nicholas: I’m totally with you on the free market competition, but if there isn’t a NEED on the part of the Army, the study should come from the other direction. If the Army NEEDED tires, it does the study and figures out exactly what it needs. Then the notification goes out and suppliers can bid on it. But the Army doesn’t think it needs more tires, or at least more than Michelin can produce. If Goodyear wants in, they should put together the numbers and produce some samples to show their stuff. Then take it to the Army and convince them that they’re better than Michelin. But don’t get your Congressman to try to force the Army to study whether it needs a second supplier when it already appears to have done the work and made a reasonable decision. The article I link to notes the idea of making the tire contracts always one-year deals, open to re-bidding every year. THAT would produce some REAL competition, though I imagine there’d be a bit of a trade-ff because the Army wouldn’t be able to guarantee huge volume at once which would cut into economies of scale. Still, for a lot of commodity-type stuff (maybe not Stryker tires) it might be a good route to explore. This move appears to be nothing more than using your Congressman to try and strong-arm the military into doing something it doesn’t need to. Congress wouldn’t do that, would it?