Maine Commercial Tire gains traction and high marks for its management in a challenging economy
By Kathryn Buxton
Jim Mccurdy and Jim Lynch arrive in style for their Maine Trails interview, straight from a company barbecue at Maine Commercial Tire Inc.’s Scarborough store. They pull up to a Portland diner on their Harley Davidson motorcycles, and it is immediately apparent the long-time friends and business partners take great pride in the business they have built together.
Still, they seem somewhat taken aback by all of the attention their company has been getting of late. They were jointly named Maine’s Small Business Person of the Year by the U.S. Small Business Administration, first honored at a ceremony in Bangor in early May, then whisked to Washington, D.C., where they were celebrated alongside winners from the 49 other states. To hear the two talk, it was a memorable experience. They had one-on-one meetings with Senators Olympia Snowe and Susan Collins, and they took part in two days of workshops and events where they got to know their fellow winners.
“It was big time. They really fluff you up,” said McCurdy. “We had no idea what we were getting into.”
Most of all, Lynch said they were impressed with the caliber of the other SBA honorees and the SBA staff. “There’s a lot of sincerity within the small business community – these people work hard and they are good at business. The SBA staff, you might think they are a bunch of guys with green eye shades, but they really are interested in helping small businesses succeed.”
‘Plan B’ moment
Maine Commercial Tire was born out of a “Plan B” moment. McCurdy and Lynch had met during the mid-1980s when they were working for C.E. Noyes, a well-established New England tire dealership dating back to the early 1900s and with stores in Maine, New Hampshire and Vermont. Lynch was hired in 1981 to run the company’s Maine stores. McCurdy joined Noyes in 1985 on the sales and marketing side. All went well for a while, until Noyes’ owner, Reilly Tire from Vermont, made the ill-fated decision to expand to the midwest. When the company filed for bankruptcy, McCurdy and Lynch saw an opportunity, but they had to act fast. Their goal was two-fold: first to take over the Augusta dealership and Bangor headquarters with the region’s Bandag retread franchise; and second, to convince key service and production personnel not to take other jobs.
“We made a pact. Plan B was in effect. We had to raise the capital and negotiate with the bank. We made calls to staff and said, ‘We need you, please don’t take a new job for a couple of weeks,’” recalled Lynch.
Convincing the Noyes staff that this new business venture was a good bet was important, the two Jims believed, because the people behind the old operation had invaluable experience and considerable recognition in the community.
Their fast thinking paid off. McCurdy and Lynch received financing from their bank and approval to buy two locations from Noyes’ bankruptcy trustees. Most importantly, the majority of the C.E. Noyes service and production staff stayed. The new company, known as Maine Commercial Tire, soon made its mark.
“Our whole focus was different. We geared the business to the commercial market, and we grew by a million dollars a year,” said McCurdy. The company added a Lewiston dealership in 1996 and its Scarborough location in 2005.
If anything has driven the business, it has been McCurdy and Lynch’s complementary business skills. In charge of operations, Lynch is the detail person who has focused on providing quality products and a high level of customer service. On the sales and marketing side, McCurdy’s creativity has helped the company pinpoint new markets. And today, the company is recognized as an industry leader in marketing innovative commercial tire services. In addition to traditional services such as alignments, wheel refinishing and balancing and emergency road service, Maine Commercial Tire has branched out to provide a roster of money-saving offerings for its commercial customers including fleet inspections and tire asset management.
The core of Maine Commercial Tire’s business is retreading. In a business where a typical commercial tire can cost $600 or more, retreading a damaged tire costs just about $200.
“The majority of the expense of a tire is in the casing,” said McCurdy. “The tread, that’s just a fraction of the cost. Rubber is a lot less expensive than styrene and steel.”
Retreading the tire can extend the life of a tire significantly. If the casing is in good shape, Lynch said, they can retread it up to four times. The retread process is not as simple as it sounds. It requires multiple steps, including a safety evaluation, buffing away the old tread, repairs to the casing, bonding the new tread to the casing and recycling the old tread. The company retreads more than 100 tires a day at its Hermon plant – 35,000 tires a year – for a client list that includes many of the top transportation and construction operations in Maine: H.O. Bouchard, Hannaford, The Lane Construction Corporation, MaineDOT, Pike Industries, Pottle’s Transportation, Sargent Corp., Shaw Brothers, UPS and Krisway. They have a phenomenal success rate. While typical failure rates for retread tires are as high as 50 tires per 1,000 (5 percent) Maine Commercial Tire’s rate averages only four tires per 1,000 (.04 percent).
Refining the process
Because the quality of their product depends heavily on the quality of the retreading process, the company has made substantial investments in improving and refining its manufacturing process. In 2000, the company became the first privately held tire company in the United States to receive the prestigious ISO 9002 certification.
In recent years, many customers have opted to enroll in Maine Commercial Tire’s tire asset management program, a service designed specifically for companies with fleets and sizable investments in the tires needed to run them. Maine Commercial Tire performs regular safety inspections on tires, repairs and retreads them when needed and stores fleet spares at their Hermon facility. Experience has shown that proper management of a fleet’s tires promotes safety and can save a company thousands of dollars annually.
With the business growing and space getting tight at the plant, McCurdy and Lynch made the decision to expand in the mid-2000s, but the timing was unfortunate. In 2008, they cut the ribbon on a newly expanded plant and storage facility, just as fuel prices were skyrocketing and the country entered “the Great Recession.”
Retrench, rethink, refinance
The recession hit the company and its customers hard, and suddenly it was time to retrench, rethink and refinance. McCurdy and Lynch made some difficult decisions about staffing and laid off some employees. Lynch added the duties of controller to his responsibilities and took on sorting out the company’s finances and leading the application process for a new bank loan. (It was their lending officer, Angela Butler at Peoples United Bank, who nominated them for the SBA award.)
“I don’t see myself as the accountant type,” said Lynch. “But I was the one who spent most of the money, and there has been a lot of on-the-job training.”
McCurdy redoubled efforts on the sales side. “I’m a hunter, and I like to win.” Staff chipped in, as well. McCurdy and Lynch convened an employee cost control committee to devise ways to trim expenses. “We said, ‘Everyone has a $5,000 idea.’” One of the most effective ideas came from those employee suggestions – installing motion detectors on lights. That has helped trim the company’s sizable electric bill. Another good idea was to use a three-part form to track tires that come in for retreading rather than the four-part form the company had been using for nearly two decades. “One copy just gets thrown away, and what’s the point of that. That one saved us $500 a year,” said Lynch.
In all, those employee-led efforts have saved the company $65,000 a month. McCurdy even credits the recession with making Maine Commercial Tire a better company. “If the economy had stayed fine, there would have been a lot of fluff that cost a lot of money and we would never have known about it,” said McCurdy. He said they plan to bring the cost cutting committee together again soon. “We know we won’t be able to save as much this time around, but it engenders a mindset and keeps people thinking,” said McCurdy.
The partners continually bring the conversation back to their employees and clearly are grateful for individual contributions that have helped the company thrive throughout good times and bad. They have high praise for several long-time employees and reel off names: Al Nadeau who runs the retread operation and has helped the company maintain its well-deserved reputation for quality; Steve Roberts, the production manager who constantly acts as a liaison between the plant, service and sales staffs; and Tammy White who knows the computer system “better than anyone.”
Weight limits and more
For their part, McCurdy and Lynch support causes that are close to them. Maine Commercial Tire is a long-time member of Maine Better Transportation Association, Associated Builders & Contractors, Associated General Contractors and Maine Motor Transport Association. McCurdy is MMTA’s current chairman and has been a vocal supporter of efforts for federal legislation that would allow trucks up to 100,000 pounds on the interstate. Maine and Vermont were granted a temporary exemption in late 2009, while transportation officials studied the effect it had on safety and highway condition, as well as the lower pollution and business costs. But winning approval for a permanent exemption has proven more problematic.
“It’s a matter of the health and well-being of the trucking and construction industries,” said McCurdy who brought the issue up when they met with Senators Snowe and Collins last May.
The company also supports many causes and institutions in the communities where it does business, including the Maine Cancer Center and local sports teams. Every year, the company organizes contributions to the United Way.
When someone brings up the subject of retirement, both McCurdy and Lynch emphatically state that slowing down is not part of the business plan. “I enjoy what I’m doing,” said McCurdy.
For his part, Lynch is looking forward to the day when cost-cutting isn’t the first order of business. “The recession is so tedious, and all that constant nagging to think lean is getting old for the employees,” said Lynch. “But the profitability is there and the future is good.”