RMA heading in new direction-sole focus to be tyre manufacturers

Miles Moore, Senior Washington Reporter (TB)

Washington DC -- Beginning Oct. 1, the Rubber Manufacturers Association (RMA) became strictly an association representing tyre manufacturers.

But according to RMA President Charles A. Cannon, that doesn't mean it won't work on issues of common interest with the Association of Rubber Product Manufacturers (ARPA), the successor organisation to the RMA's Elastomer Products Group (EPG), he said.

“As of the end of our fiscal year, there will be two separate 501(c)(6) trade associations, each with its own management, boards of directors and budgets,” he said.

“It is a fundamental structural change,” Cannon told Tire Business. “We will move forward in a cooperative spirit, but fully independent of each other.”

With the separation of the ARPA from the RMA, the latter group loses one senior executive and one staff member, as well as about $500,000 from its previous annual budget of $7 million, according to Cannon.

“We're presenting a new budget to the board of directors of about $6.5 million, so it's a pretty clean break in that area,” he said. With the creation of the ARPA, the RMA now has 16 permanent staff members, he said.

The reinvention of the RMA as a tyre industry organisation will mean a major refocusing of the association's activities, beginning immediately, Cannon said.

“The EPG, being a very diverse and dispersed membership, had a multitude of discrete issues, some of them unique to substrata within the group. The creation of the ARPA refocuses the RMA and its core mission.

“Tire manufacturers have been the largest part of the organisation for virtually its entire life,” he said. “This allows us to move to highly focused activities directed by the priorities of the tyre sector.”

A gradual change

Statistics regarding RMA membership suggest the division of the RMA and the ARPA is a logical development of the evolution of the rubber industry, Cannon said.

In 1918, he noted, the RMA had 340 corporate and 249 individual members. By 1981, membership stood at 215 companies; in 2000, 121; and in 2010, only 48.

“In 1918, the rubber industry consisted of a very dispersed group of small manufacturers, including the tyre industry,” Cannon said. “But consolidation has been the rule in the industry almost since World War I.”

The RMA held steady at about 200 member companies for decades, but consolidation accelerated dramatically beginning in the late 1980s, especially among elastomeric product manufacturers, he said.

“We moved from the Molded and Extruded Products Division, to the General Products Group, to the Elastomeric Products Group, in an attempt to more efficiently serve our member companies,” Cannon said. “We reduced dues substantially for EPG members, but the trend line was greater than we thought.

“It became apparent that we couldn't serve the two groups equally, but we didn't wake up to that until rather late,” he said.

Under the direction of the RMA board's new chairman-Goodyear President and CEO Rich Kramer-the board is working to identify emerging issues, as well as issues in which the RMA and the ARPA can work together, according to Cannon.

“Right now we are facing a combination of a much more activist NHTSA (National Highway Traffic Safety Administration) and EPA (Environmental Protection Agency) with a Congress that is largely unreadable at the moment,” he said. “The administration may be more intense in its activism as the perception grows of a less receptive Congress.”

Along with charting the RMA's actions on legislative and regulatory issues, the group's board will work with the ARPA on transition issues, such as the ARPA taking on responsibility for the former EPG's highly respected collection of industry statistics and technical documents.

“We're working out an agreement for them to take full charge,” Cannon said. “As part of the transition, they'll be using the original EPG name for a while.”

While the exact change in the RMA's activities isn't yet evident, it will become so quickly, Cannon said.

“There will be new initiatives and emerging issues, and a number of issues that have been quiescent will become more active. It will not be a calm time.”

Six months of working out transitional issues have created a new, totally viable group that the RMA expects to work with on mutually vital issues, he said.

“We don't celebrate this event, but we recognise it is a rational and reasonable resolution to technical and institutional challenges. After a lot of effort to revise and retool, we have reached an appropriate separation.”

From Tire Business (A Crain publication)