Tyre crisis spills over to machinery makers

By David Shaw, ERJ staff

Hamburg, Germany -- Many machinery companies are facing a tough time as tyre makers cut back on capital investments. Although there are a few bright spots around the world, most machinery makers said there are very few contracts available currently.

The bright spots are India, the Middle East and a few projects in South America. Projects in China, Europe and North America have virtually dried up, according to machinery makers at the Tire Technnology expo event currently running in Hamburg.

While 2008 will go down as a record year for machinery sales, contracts dried up in October of 2008 and have not recovered since. Opinions are divided as to when the market might recover. Estimates vary from the excessively optimistic 12 months to a more realistic 24-30 months, or even longer.

In the mean time, machinery makers are cutting back on contract staff and overtime to stretch the existing full order books out as long as possible, while many of the customers also seek to delay and postpone delivery of equipment.

Thoise copanies, such as Troester, whohave a good business in infrastructure projects are doing better, but they also report that tyre industry projects have largely dried up.

More on this story in the coming issue of ERJ