Tire makers see major gains from US infrastructure plan

Singapore – The US tire industry will be buoyed by Washington’s approval of the ‘infrastructure investment and jobs act’, which is intended to drive up investment in modernised infrastructure and energy-efficient transport across the country.

The recently agreed legislation includes around $550 billion (€443 billion) in new federal investment in US transport, internet and other infrastructure, and is expected to add around two million jobs a year over the course of the decade.

For Anne Forristall Luke, president and CEO of the US Tire Manufacturers Association (USTMA), the act “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.” 

This, added Forristall Luke, should lead to “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.”

There will, she noted, be measures to increase the use of rubber-modified asphalt as pavement material and tire-derived aggregate as infill for stormwater control systems – as well as 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,” continued the USTMA head. 

This should also lead to “an expanded market for advanced tires that can withstand the added weight of an electric vehicle and help it literally go that extra mile,” said Forristall Luke.

In the IRSG interview Forristall Luke also shared her perspective on opportunities and challenges in the US tire manufacturing industry.

The US tire industry is steadily recovering from the impact of the pandemic, with most USTMA member companies reporting strong first-half earnings, according to the industry association leader.

As examples, Forristall Luke said Bridgestone, had reported a “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, the USTMA leader further pointed out.

In its latest forecasts, USTMA projected total US tire shipments of 336.1 million units in 2021, compared to 303.2 million units in 2020 and 332.7 million units in 2019 – its first forecast above 2019 levels since the start of the pandemic

Alongside recovery, Forristall Luke said US tire makers 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.”

Meanwhile, she noted, digital transformation is accelerating across the US tire industry with the rollout of 5G technology and the shift to electric and automated vehicles gathering significant traction.

Action on climate is another growing focus, with USTMA members “committed to reducing greenhouse gas emissions throughout a tire’s life cycle in many ways,” according to the association leader.

Key targets, she stated, include “improved rolling efficiency of new tires, increased re-use and recycling of scrap tires, and even lowering carbon output in the manufacturing process.”

The USTMA leader was commenting in a 27 Aug Q&A, issued as a follow-up to her role as a panelist at the recent World Rubber Summit 2021, organised by the International Rubber Study Group (IRSG).