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

In a move that could secure a lucrative new defense contract for Ohio-based Goodyear Tire and Rubber Co., 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.

Voinovich said he is concerned that the Army's eight-month reserve Stryker tire supply has been depleted because of current operations. "With only one company currently supplying tires for our military's vital Stryker combat vehicle, there is no room for error," he said in a news release last month.

A spokesman for DeWine on Thursday said the amendment would authorize the Army to study both the cost and benefits of having a second tire source for the Stryker, "the lead vehicle for the foreseeable future." But in a nod to his home state tire manufacturer, Voinovich said Goodyear would be a "natural domestic source" for the Stryker contract.

The Ohio senators' amendment seems to pre-empt any concerns in the Army about tire production. "There is no current Stryker tire shortage even with the current [operational tempo]," Col. Peter Fuller, the Army officer in charge of the Stryker program, said in an e-mail response to questions.

But Fuller noted that the Army is taking "proactive steps" to meet requirements in the amendment language, which still must be vetted through a conference committee.

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.

Seeking a second source for Stryker tires could be beneficial to the Army, if handled well, one veteran budget watcher said this week.

"There's a right way and a wrong way to do this," said Winslow Wheeler, a former Senate Budget Committee analyst now at the Center for Defense Information. "The wrong way to do it is to cut the baby in half and give Michelin a piece of the pie, and give Goodyear a piece of the pie."

Instead, Wheeler said, the Army should compete the tire contract every year -- giving the winning contractor the larger share of tire business. Forcing the companies to make an annual bid for the contract might help drive down overall costs, Wheeler said.

Last month, the Army signed a $95,000 contract with Michelin, directing the company to produce 216 Stryker tires over the next three years. According to the Army, the agreement is a "backup" contract, with other Stryker tires acquired through a separate contract with General Dynamics Land Systems, the company that produces the vehicle.

Both Goodyear and Michelin manufacture tires for the military, with many contracts climbing into the tens of millions of dollars.