James H (Jim) and James J (JB) recently sat down in the conference room in celebration of James H’s 50th anniversary of employment at McCoy Truck Tire Service Center. They set out to create a Parade Magazine-type of interview-article for the website that would inform visitors of what 50 years leading a small family business in California’s Central Valley looked like. Three meetings later, having created three hours of recordings, which translated into 33 pages of dictation, the two had discussed Jim’s entire career, from hiring on with John McCoy in 1968 to Jim’s current role.
JB –I don’t mean to breeze over your early work experience, but you were a young man when you started, as in you weren’t long out of the military when you went to work for John McCoy right?
Jim – I was discharged from active duty in 1962 and was married in September of 1963. I held a job from 1963 to 1968 in the world of pneumatic tools, selling construction-type equipment to rental yards in Southern California and the Bay Area. In that time frame, in visiting Modesto, I would spend Saturdays with John McCoy, riding around, seeing his customers. Unbeknownst to me, I think he was kind of watching to see if I had any interest in that, or, if I’d get out and help him load.
JB – So you lived in Southern California but you were visiting Modesto and would ride around being John McCoy’s free helper?
Jim – Yeah. I think he was observing me. Early Spring 1968, I got the call, that he was interested in me coming up here and going to work with him, in a sales capacity. I had plenty of time to make up my mind; about 12 hours. John wanted me to let him know the next day – He had another individual hired to do outside sales and had out fitted him in a pickup truck, but it had been about three months and that individual wasn’t working out so… Louise and I were very settled, our first child had arrived, we had recently purchased our first home, and my current job supplied me with a company car,
JB- I had heard that the phone call from John McCoy had taken place during a fight by Mohammed Ali in Africa?
Jim- Actually, I wasn’t ever sure of the location, but he was Cassius Clay at the time, but as I remember that was the night he won his first title and Louise’s Mom called and wanted to know if I was home and could I talk to John, and that’s when John asked me if I would like to go to work up there and pretty much, gave me the layout of how much I would make, and I would work 6 days a week. I would have a pickup truck for a company vehicle, and then I could move myself up here, and start to work as soon as I felt like I was ready to work. We (Jim and Louise) talked about it all night, tossed and turned. She wanted me to make the decision.
JB- At that point, you guys had been married?
Jim- 5 years
JB- 5 years. And you’d been living in Los Angeles 5 years?
Jim- One year in the Bay Area.
JB – Ok so you decided to do it – move your wife and your daughter to Modesto, and start your new job at McCoy’s. Was that here on Lone Palm Avenue?
Jim- No. We started at the original location on 1226 9th street, McCoy Passenger Tire Company.
JB- Did McCoy’s do retreading back then?
Jim- We were retreading, mold cure retreading, as it was called in those days – “hot capping” – on the south side of the property. We had two or three molds and all the state-of-the-art equipment at that time: an Orbitread machine that applied the rubber in a circular motion, around the tire, and then the tire was inserted into either an upright, or a horizontal mold, and then we cured it. The shop was state-of-the-art, and relatively small, in the respect that you could produce probably 8 to 12 tires/day.
JB- Really! You were doing 8 or 12 tires/day back then? – hotcaps – Commercial tires? Passenger tires? Both?
Jim- There was some passenger retreading going on at the time, although John was more dedicated to the commercial business. His son Jack McCoy and his other son Bob McCoy were doing some passenger and racing tire retreading at the time as the older brother Jack was into auto racing. He had driven for a few years, but he wasn’t considered a Modesto Legend yet
JB- So the Bite Rite Racing Tire hadn’t bloomed just yet, at that time?
Jim- It was there, and they were producing those but to my knowledge it hadn’t busted into racing history.
JB- according to Jack’s book, Racing’s Real McCoy, there was a time when the Bite Rite Racing Tire was the premier racing tire,
Jim- Of that I was never, John kept me pretty (chuckles), dedicated to the commercial sales.
JB- You were busy with the commercial sales?
Jim- Yes I was only over on 9th street from 1968 to 1971, when we decided we needed a larger location for trucks to get in and out of easier. The passenger business was booming with the addition of Jack Robinson and there was less and less room for trucks and retreading. Around that time, we were doing more mold retreading and John had started investigating this new retread process that had come over from Europe in the late ‘50’s. It was called “precured”, and what excited him about it was you didn’t have to have a mold for every size of tire. Sizes were starting to change. Europe was having a bigger influence on the tire sizes, both truck and passenger in the US. Tires were heading more towards metric sizes. So, John thought precure was a great idea. He had done some investigating to see that there was a franchise agreement available for the two or three counties surrounding Stanislaus County. He kept investigating until he decided that that’s what he wanted. He could see that precure was the future of commercial retreading. To get the franchise there were several stipulations that the franchise required: certain size of building, and certain size of electrical power, and so forth and so on, that wasn’t available on 9th street in the facility that we had there.
Jim- There was still a need for that type of hot-cap retreading: some farm sizes and some other things, and so, his son Bob got involved and managed that retread shop and eventually moved it to 7th street, and then eventually to Ceres, where I think it still is today. We looked and looked for a piece of property and we didn’t want to be way out of town and we didn’t have a lot of money, to buy property with, and so we heard about this property where we currently are on Lone Palm being auctioned off and in a bankruptcy situation. So, John attended that auction and managed to purchase the property that we currently sit on on Lone Palm Avenue.
JB- Yes, I see. How did you meet people in town?
Jim- Kiwanis was an opportunity to meet people who, having not been raised here, – it was a way for me to get acquainted with local people that had been here all their lives. So, John was pretty excited when I had that opportunity to join the service club because he had always been service club oriented. With the Lions Club.
JB- What kind of things were you doing? Obviously, you were doing some sales, when you started you were helping John unload and load. You were going out doing cold calls and those kinds of things.
Jim- Well it was kind of interesting because when I came to work for him my idea was to learn how to change tires and dismount and mount and air tires and all that kind of mechanical stuff. That was totally opposite of what his intentions were for me. He didn’t want me swinging a hammer, changing tires, holding an air gun, doing any of that. He wanted me, in the pickup, out selling, creating new business, “Cold Calls” as you say. So initially he sent me to Los Angeles to a Michelin school. Michelin’s people would travel around the country and gather up dealer people interested in learning to sell tires, and particularly sell the Michelin tire. This is 1968 and the Michelin tire got to America in probably late 1950’s. I never really got to learn how to change tires, or, run an air gun, or understand the noise that the air gun made to tell you that the nuts were on tight, but, it didn’t take too long for me to figure out that that was pretty hard work/
Jim- So basically, all I did initially was sell. Get in the pickup in the morning and sell tires. Just knock on doors and he’d give me two or three accounts a week to go check in on and pay attention to, and then two or three of those of his own that he handed off to me and see, and make sure that I could handle them OK.
JB- Not to say you didn’t do any physical work right? I mean, you had to load mounted truck tires in your pickup?
Jim- When I was young I could do a lot of that stuff that as I get older I don’t do as easily, and I got smarter. We didn’t have liftgates – we didn’t have forklifts. We learned to carry a 4×4 or 6×6 piece of wood, put it on the ground, and roll the tire and wheel on it and lean it against the tailgate. That changes the balance point, and then just push on the top, that’s how we loaded tires.
JB- The “Stair Stacker” method?
Jim- Pretty much –
JB- I see Joey using leverage when he loads his pickup. Joey’s been with us a long time right?
Jim- We hired Joey Jones sometime in the 70’s and today he is the second longest tenured employee we have.
JB- Right, longest with us. So you were doing some tire loading back then. I’ve noticed that even now-a-days we’re kind of different from other retreaders in that we have all these pickup trucks, and our salesmen deliver their own orders in a lot of cases.
Jim- Yeah, John insisted always that you loaded your own and delivered your own. It was, in his view, a way to keep in constant contact with the customer and find out if the competition was in there, doing whatever they were doing, trying to secure the business from you. He believed, as do I, that as often as you can contact your customer without being a nuisance, you should. I’ve always felt it was important to keep that contact with your customer, rather than delivering everything through route trucks and route drivers. There is a need for that in certain situations where there’s mounted tire programs where we deliver all over Northern California. You don’t want to go walking in one day and find out that you don’t even have the customer anymore because you haven’t even seen him in a month and somebody else was living on his doorsteps.
JB- You went from salesman to CEO, and Chairman of the Board, and along the way you started taking on different kinds of tasks and managing the business overall. Is it true that you had to go to school at one point?
Jim- Louise’s Mother (Janet) insisted that I get some accounting back ground. She was thinking that I would eventually be running the business. She convinced her daughter to convince me to go to Pasadena City College at night and take an accounting class. I guess they call it “Accounting 101” now. I did that. I got all A’s in the night school and that accounting class has served me well all these years. But backing up a little bit, sometime in the early 70’s Joey and I were selling tires and John was managing the business and Joey and I thought, ‘we should have an alignment shop, for trucks’ and it would be really easy because, he and I were out calling on all these trucking companies and we could just – we wouldn’t even have a salesman that we would have to pay to run the alignment shop, or I mean to sell for the alignment shop, we could be doing it just as we were selling tires and talking about why the tires were wearing differently, then if the vehicle needed an alignment, we could offer it. So I hooked up with a guy named Ken Urnst, who had a lot of passenger alignment experience, and we opened an alignment shop called “Center State Alignment Brake” and he and I were partners. It was opened in the location that is the current Modesto Retread Plant. Ken aligned trucks for several years in a “pit alignment”, meaning the trucks drove onto a pit and he was underneath there. Eventually I sold my interest to him, and he leased the property from a landlord, and then eventually he got kind of tired of it. His interest went in other directions and Ken eventually closed the business. We didn’t have an alignment business until 2000 we got back in and it’s still a good asset for the business and it goes directly with commercial truck tire sales – especially now days where the trucks are, much more expensive and much more technologically advanced.
JB- What I’m hearing here is that you went from a position as a salesman, in the beginning, to hiring, I mean you hired Joey Jones, convinced John of other business decisions.
Jim- We kept growing the commercial business. There was still a lot of competitors, but we were specialized in truck tires and a couple of the competitors in town were more dedicated to agricultural. We did Ag but that era they had to have lead in the tires to weight the tires down. The vehicle had to have enough weight to get through the fields and liquid lead was just beginning to become an environmental issue as to what you could do with it. Those issues were more of a problem than we wanted to deal with, so we steered clear of that. We would sell an agricultural tire – Sold a lot of tractor tires to prominent locally based businesses. But none of the leaded tires – we sold tires with wheel weights instead of liquid in the tires, and so that part of the business we stayed in. We finally ended up hiring a guy named Jerry Kelsey. Jerry had considerable experience from Montgomery Wards and other tire and commercial tire businesses. It was fun to get a guy in that you just put in a pickup and away he went. Jerry was local and knew the commercial ropes. I was doing more administrative things as well as selling so as John leaned more towards having less time at work I needed more time at work and by then I was president of McCoy Truck Tire Service Center and John was still president of McCoy Tire which was the ownership of the Bandag business.
JB- The corporate name was Superior Retreading right?
Jim- No not ‘til 1984, when John decided to sell us the remaining part of the retread business that had been operating under McCoy Tire. At the time Bandag didn’t really care the name of the business, what they cared about was that the franchise was still in John’s name. Sometime in the mid 80’s or so he got them to recognize McCoy Truck Tire Service Center and Jim Barnick as the responsible parties for the franchise.
JB- Alright, so here we are coming on up on James H Barnick’s 50th anniversary of employment for McCoy’s, which precedes the birth of McCoy Truck Tire Service Center Incorporated by 3 years. The new approach to business and sales includes a Generation X public speaking alongside a Power Point presentation that includes statistics and graphics. Some of McCoy’s greatest salesmen, like Paul Ange for example, feel somewhat behind the pace with respect to doing public speaking presentations. But I could ask Paul and I want to ask you, that with your experience, you have a lot of experience in truck tires, you know: You’ve probably seen well over a million beads: 500 thousand truck tires you might have looked at, dealing with customers – being accountable to guys that are making a living hauling material, or anything – and being held accountable to those customers for their truck tires. What do you really think about tires? Tell us about tires; What you’ve learned about them? What kind of things do you think about in managing the tires on a customers’ truck? For example; I learned from you that you would put the most suspicious casings on the drives, because you’re going to get them back faster. Before you suggested that, I had always thought the worst tires should go out back on the trailer so they’re out of sight, out of mind – I guess this is a long question – I guess my question is what would you tell me about tires and what would you do? What’s most important do you think?
Jim- A little history there, and we still say it today, the most important thing about tires is the air in them. If they’re ran under-inflated or over inflated, anything to do with the air pressure is going to, unless it’s correct, is going to be a detriment to the delivery schedule of the product that’s being delivered, and to the life of the tire. So, when you agree to be responsible for a customer’s fleet of vehicles, even if it’s only one, if it’s an owner operator, you have to try to ensure that he has the knowledge that you have in the best way you can present it to him, to manage his tires with your help. Or, you manage his tires with his help. That’s the way we’ve always done it and it was somewhat very simple in the early years because we were in the process of converting from bias ply cotton constructed tires, to nylon cotton, to steel belted constructed tires in the radial age. “Radial” means that the tread and the sidewall work independently of each other. A Bias tire is all connected, it’s all one piece, whatever one piece of it does the other piece does the same thing. As the radial concept became more accepted in the US and more players were trying to build radial tires, managing the tires became more and more critical for our customer because the cost was greater. The costs were not nearly as great as they are today, but in respect 30 or 40 or 50 years ago it was still expensive based on income streams of those days. What started to change all of that, then, after the radial tire was somewhat accepted, was initially they all would take a precure type of tread and Bandag was the first process of that type in the US (to my knowledge). We embraced that direction in the early 70’s. John McCoy did because simply said, if we had a tire and we had the rubber, the tread design was already in the rubber, all we had to do was put it on the tire and get it to adhere and away we would go. We didn’t have to have a multitude of molds for every size of tire that we were given to retread. And there were a number of sizes already out in truck tires. They hadn’t reached the “Lo Profile”, as we know today, but there were 11-24.5’s, 11-22.5’s, 9-22.5’s, 8.25-20’s. All of those, in a non-precured-world, required their own mold to retread, so (Bandag precure) was a significant advancement for the retreading world because your costs were so much less than buying a mold for every size tire. That also allowed for multiple tread designs to start appearing. In the mold concept of the hot-caps you’d have to have a whole different set of inserts for each tread design. We thought we just had the cat by the tail because we had everything covered – if we could get the width of tread rubber we could put it on anybody’s tire. In those days you initially were a franchise dealer because this one concept had the corner on the market, and so they just started heading west from the Midwest and east from the Midwest, creating franchises, of which we were one.
JB- Did John McCoy sign the franchise with Roy Carver, the owner of Bandag? Was (Roy) the guy who came and represented Bandag to John?
Jim- He had an assistant and I can’t tell you his name now and the guy was his assistant up into the 90’s. I don’t remember, ever having met Roy Carver, although, at the time that all that took place, I was an employee for John McCoy and had no business being involved any further than selling the product. In fact, I’m pretty well self-taught in Bandag’s world. I never have been to Muscatine, which was their headquarters, prior to Bridgestone purchasing them. If there were any training sessions that were local in California close by, a day’s drive, he would insist on me doing that, and there were a number of those, but his whole goal was creating business. There was a lot of advertising going on in those days, through trade magazines and things to initially contact the customer bases with this new product. That was always help. From then as it progressed, and that allowed the new tire manufacturers, to start playing with their products and they could make them wider, they could make them shallower, and then they knew that the retreading process would back them up by making a wider tread to fit on their casing when it wore out. A more specific tread for a more specific application, such as a snow tire for the Midwest and the Northeast and a cooler running tire, narrower, shallower, for the West which was hotter. The concept of retreading and retreading with Bandag, the value, was just endless, and you see it today. The SKU’s you have today, in your tread rubber, as well as your new tire inventories, is mind boggling.
JB- two hundred and thirty SKU’s on a Bandag order form
Jim- When we first started to handle Michelin, they had two tires. We were originally an associate of a dealership in Stockton, from around 1965 to after I arrived. Sometime in the early 70’s John McCoy won us a direct dealership, but we’ve been dealing the Michelin product for fifty plus years. At any rate, in those days, there were two tires with Michelin, you didn’t have a lot of inventory, you didn’t have a lot of SKU’s, I couldn’t tell you how many SKU’s Michelin, Bridgestone, and Goodyear, have today. It’s all because the vehicles became more sophisticated, the drivers became more educated, the pay was better for driving, and so all the applications that were out there for trucks and places to go and items to haul required more tire offerings such as wide-base tires on the front end of heavy equipment.
JB- A consultant recently that was giving a talk at a meeting for a large leasing fleet, and he had some history, not as much as you, but he hinted at the idea that- speaking of different SKU’s and as the manufacturers specially design their tires or their tread products for different tasks, there has been an improvement to performance. This consultant referred to the performance of steer tires from when he began, the kind of the “Holy Grail” for manufacturers for steer tires would have been 100k miles before wearing out, and now, some new tire brands are able to get 200k miles on a steer axle and have 7/32nds of tread remaining! So, they’ve been at this radial tires now for what? 40 or 50 years? And the manufacturers just keep making their tires better and better and better. The market keeps on upgrading the “tablestakes” for getting the wheel position from the customer.
Jim- Well, and too, all of that engineering advancement the technology to improve and allow for that advancement is very costly in today’s world. Your consumer in the industry and the large fleets and the small fleets and the owner operators are willing to pay those prices but the old adage of what am I going to get back for that? And there are examples of one or two hundred thousand miles, but in my experience most fleets of the world know that the optimum kind of mileage is running coast to coast, on decent highways, at decent temperatures, and reasonable speeds, that are allowed on the interstates. A big majority of customers that we are familiar with probably have a set pull time for their steer tires, predicated on mileage, maybe it’s a hundred thousand, maybe it’s a hundred and twenty-five thousand, most of them never wear out the front tire.
Jim- In the front wheel position, you can run it down, to 4/32nds, on the steers and 2/32nds everywhere else. Pulling the steers at a set mileage allows customers to generate a used tire, off the steer, that might have 125,000 miles on it and it still may have 60% of the tread left, They put it back on a trailer position. We also have developed, over the years, manufacturing dates, on the sides of the tires. These dates tell when the tire was produced. For example, if an owner doesn’t want a three or four-year-old tire on his over-the-road truck he knows what he’s got. Maybe local construction trucks delivering concrete don’t concern with casing age. The consensus is that considering the constant loads on the front ends, designate a pull point and use the tires someplace else on the vehicle. Keep fresh, new tires, on the steer axles, that’s the critical axle on the vehicle from the standpoint of possible accidents. If you lose a front tire for any reason in today’s high-speed world; running over something, manufacturing defect, driver error, the chances are great that it will be relatively catastrophic by the time everything is settled. The safety factor in pulling the steer tires earlier rather than later has always been evident in the industry.
JB- Come to think of it, I don’t know of any manufacturers that make “steer” tires – Their steer tires are all labeled, “All Position”
Jim- And retreadable
JB- And also retreadable. I went to Commercial Tire Consulting School, a while ago, and a long time ago actually, and I got trained by Don Strife, who I know is your friend. He showed me how to do numbers and prove that sometimes there’s a difference between price and cost. Speaking from your experience, in dealing with customers who have become friends, and being accountable for the performance of their tires and therefore their business, if you could talk about the influences: We are a special kind of tire shop in that we have a pretty limited offering in terms of off-brand, Chinese-imported tires. Where are you at on that idea of price verse cost? Is Price vs. Cost just a way that tire manufacturers and dealers get more money from truck owners or is it really true that sometimes there’s a difference between price and cost?
Jim- I would tend to agree with Strife. In the beginning we basically sold Michelin truck tires. Kelley Springfield McCoy Tire had handled off and on since the WWII days. We had a medium-priced tire and a higher-priced tire of that era. Kelley Springfield still was bias tires at that time, and they were moving towards radial, “radialization” was the term that was used in the industry in that era. Kelley Springfield was owned by Goodyear, and Goodyear was entering the radialization world also, and bringing along these lower-tiered tires. We never believed in being able to do justice to any more brands. There was General of the day, and there was Firestone of the day, and Continental had arrived from Europe, and there was Hercules, there were some Montgomery Ward tires that were being made by someone else, but we kind of steered clear of that. As the years went by, more and more tire manufacturers were coming to the radialization world and had offerings. For a long time, Bridgestone had the #1, world’s best casing to retread. And that was predicated on information derived from retreaders around the country. All sorts of retreaders, hot cap retreaders, precure retreaders, and so, there’ an example, – you’re selling a couple of brands of tires that – ‘my gosh, how come you don’t have this tire to sell if it’s the best casing?’ And you couldn’t just buy casings, although in that era Bandag did try to secure casings availability for their dealers and of course they would continually be trying to purchase them from Japan, which was the headquarters for Bridgestone because they could say we got the – according to the data – the best casing on the market. That has pretty much changed over the years, at least in my view. The three major manufacturers’ casing construction integrity is equal. I wouldn’t be able to say to you and if you notice there’s no more advertising in magazines about who’s got the best casing for retreading. What they tend to do more to imply that who has the best casing is really who has the best retread inspection procedures to determine the best casing. We’ve come of the view that we are the best that we can be. For us, we are able to say, every casing we retread is the best casing, and if we can’t retread it then it’s not a good casing.
Jim- Now, you must be careful there because that non-retreadability issue may have been caused by other circumstances that the casing manufacturer had no influence over, (i.e.) nail holes, road repairs, run under-inflated, whatever. So, to me, as we proceeded through, and the retread shop became, more busy, and the retread continued to be an alternative to buying new tires, various world conflicts caused raw material issues both in oil and natural rubber and currency fluctuations and all sorts of things began making certain products beyond the financial reach of certain trucking applications. For example, you’ve got a delivery truck in Modesto, that doesn’t go any further than Stockton. Do they really need the highest price tire you have? Or do you feel like you should be offering them a really good quality product at a more reasonable price than a tire that really is dedicated and kind of constructed for going from here to New York? That period of certain products becoming out of the reach of certain trucking applications started in the mid-80’s in my view, and as materials started to rise, we started seeing that. About the same time, we started doing retreading for a large truck rental company. In addition, we were buying new tires for them from a dealer in Stockton because we couldn’t get Bridgestones from Bridgestone. Eventually that dealer got into a position where he allowed Bridgestone to need a new dealer, which is how we became a direct Bridgestone dealer. But, back to the initial point of our discussion, of different levels of priced tires, that allowed us to then become involved with the Firestone product. Which in today’s terminology is considered a tier 2 tire, as is a Kelley Springfield, as is a General (under Continental), premiums being Michelin, Goodyear, and Bridgestone, – the jury’s still out on whether Continental is considered that, but those are the major tires considered in the US.
JB- You know I think Monday was Firestone’s 150th anniversary, or the 150th anniversary of Harvey Firestone’s birth.
Jim- Somewhere along the line in the 80’s when Bridgestone was starting to expand worldwide they purchased Firestone and most people think that they did that to create a tier two tire but in fact that wasn’t the case at all. History tells us that Japan, has never a been major farming environment like say the US is or certain parts of Europe, so Firestone forever had been the leader in the agricultural world of tires. Old timers will tell you that’s why Bridgestone bought Firestone – it was to get into the agricultural tire business and, if you would, a tier two type of small Earthmover tires up through 23.5-25’s for road graders and dairy applications. That was when we got involved with Firestone, by way of Bridgestone, in the 90’s, and became a direct Bridgestone dealer. They have since offered another offering called a Dayton product which is made in China, in response to the Chinese influx of off-brand tires into the US.
Jim- Allow me to give you a little idea on, how we got into that: By virtue of applications in the industry and in our community, that really we were “over-tiring” them, if you would, from the stand point of what their application was.
JB- Yeah sometimes a Firestone or BF Goodrich is the right tire.
Jim- One of the things that the radialization caused – Michelin being the first one in the US with radialization – the idea was to sell the original equipment manufacturers the product and get that
JB- Now you have the wheel – (meaning the tire manufacturer sells the new concept to the Original Equipment Manufacturer and now the truck owner has a truck that has wheels for tubeless, radial-type tires and it will no longer run Bias, tube-type tires, without changing wheels out also)
Jim- Yep – so that’s how they really came to market and for years it was a detriment to the dealer because original equipment was #1 in the pipeline. The dealers would run out of tires because the manufacturer ran out of tires because they were shipping them all to the original equipment. That was Michelin’s way to go to market. Truthfully, it still is. Other suppliers have kind of fought it over the years but if you look back in history you’ll see they’ve all taken their turn making original equipment #1. Of course, they make less profit on original equipment then they ever did on the dealer network. When they finally woke up to that fact, they started to decide the customer really was to be shared between the dealer and the manufacturer. Before the tire manufacturers had this wake-up, we always felt like the truck owners were our customers and whoever we were buying tires from, was our supplier. What caused that to change was somewhere in the 80’s a number of dealers decided to sell their businesses to manufacturers. The manufacturers that didn’t purchase dealerships became fearful of losing wheel positions with their product. The remaining independent, not factory owned, dealers could be swayed from one product line to another and then those dealers would in turn, convert their customer base to another product line and the guy who used to have it now was outside looking in. They started by wanting to help with the pricing with our customer, and then that allowed them to know our customers, and that allowed them to know the personnel to see. In my view, at the time it wasn’t a good thing, but in reality, it was inevitable. It just happened that they had the horsepower by virtue of controlling the production, and they needed to be able to, and this is the excuses that they used: They needed to be able to know the customers and know their demands.
JB- See the demand swells coming right?
Jim- To see needs coming and to do engineering for specific products for specific applications, and that’s what led to all the specific SKU’s we have today. And it also, the downside was, it made the manufacturer more in control of the customer base than the dealer. As early as the 90’s I was told by prominent people in the manufacturing side of the industry that in the future, and nobody knew how far out, the distribution network of tire dealers in the US would be more of a servicing environment than of selling. We’ll always sell tires, but for the major manufacturers we would be more of a delivering and servicing entity, for those folks- night service, emergency service, fleet service, weekends, and so forth and so on. That was in the late 80’s-early 90’s, and to me that was kind of the start of the direction we’re in today. Which, our business is imbalanced by manufacturer-direct business and over the years it’s made a complete, 180-degree change. Manufacturers went from a minor role in our business and our own business a major role to our own business development a minor role and the manufacturer’s position a major role in our business. Now you can look at different sides of that. It’s more prevalent in the new tire delivery system than it is in the retreading, but it does exist in the retreading with major national fleets to augment consistent pricing for these national-located fleets.
JB- Ok so last week, (chuckling) – right after we turned the recorder off I asked you point blank whether you thought a retread was any less safe than a new tire and you said, “absolutely not.” So in your fifty years of experience and dealing with customers and putting retreads on trucks the retread is every bit as safe as the new tire, so that was kind of exciting, but, what haven’t we talked about yet?
Jim- If there’s anything we haven’t covered it would be the term that most owners are hesitant to address, and it is the succession of their business; owners’ relinquishing control of the business to someone else. Early as the late 1980’s the manufacturers, at that time, Bridgestone, Firestone, and Michelin, were starting to question succession plans in dealerships nationally. Some dealers that were big supporters of one manufacturer sold out to another and in so doing his business to that supplier went away, to another supplier. The manufacturers started to look at the dealers and say, “Oh my gosh, we better have a plan for this dealer, or make sure he has a plan, so that we can continue to be his primary supplier of commercial truck tires and related products!” Interesting for me was that John McCoy, who passed away in May of 1991, had already been talking about succession. His plan was in place with me, but he wanted to know if I had given any thought to succession; were any of my kids interested in the business? At that point none of my children had married yet, so it was time to, in his mind, start thinking about that. I just thought it was ironic that John started thinking along these lines at the same time the manufacturers started becoming concerned. We started giving that consideration and in the late 1980’s we hired a gentleman to assist me with the intention of maybe even me retiring a little early, perhaps around my fiftieth birthday or so. That didn’t work out very well for us. Nobody could ever figure out why except probably deep down I may have thought I was ready to relinquish control, but probably I wasn’t. We continued on, not necessarily with our head in the sand but, kind of keeping our eye open and seeing what could happen and family members, my family members, my children started to marry and there was some possibilities and my son was coming out of high school in that period and headed to college and we weren’t sure about his interest in the business, but we just kind of started moving forward with just having that in the back of our heads. In that same mid 90’s one of my sons-in-law decided that he had some interest in possibly going into the tire business so then that started a part of our succession plan at that time.
JB- Cool. What do you hope for as a, dare I use the word; legacy. What would you expect of – or – would you expect McCoy Truck Tire to be around 20 more years?
Jim- I would think that the foundation of the business would allow it to be around 20 more years. Its emphasis may change – what I mean by that is it may become more of a servicing organization for manufacturers to large fleets, but I think there will always be a need for its ability to sell tires to small local fleets and small local businesses. One-or-two-truck type of businesses, pickup and delivery type of businesses, and so I think in 20 years and maybe beyond that that the business would still be a viable one. It continues to be well financed from years of profitability and returning that profit to its growth and modernization including hiring qualified people and training people to be qualified for various operations within the business. I think it has great success, not to brag, but the distribution of responsibility is such that my interviewer is managing the manufacturing side of the business which is two retread plants that are as modern as can be. There will always be more equipment to be purchased, more technology to be driven into the production of retreads, so I think that part of the business is in order/ it’s an integral part of the business, representing around 25 to 30 percent of the total yearly business. With Marc Finnegan managing the sales force and over all administration of the business and the personnel he has in house, being Gerber Martinez the controller, and his office staff, to manage the flow of the business, I don’t see any reason for the business to do anything but continue to grow.
JB- Alright, uh, is there anything else you’d like to add?
Jim- Maybe just remind everybody that family businesses have evolved in this country for years and years and years and for all those years there’s been always family conflicts to deal with/
JB- (Chuckles) Yeah, OK, alright. On Linked In somebody re-posted ten pieces of advice by Warren Buffet for young people that are interested in succeeding. It was Warren Buffet’s version of 10 things that young people could do to succeed. You’ve reminded that communication will be critical to our success. Are there any other kind of things that would be critical for our organization’s success going forward? You also talked about reinvesting, and profitability, and then reinvestment of that profitability right? That kind of sounds like Warren Buffet already right? Because I remember Warren Buffet saying “always win” (chuckles)
Jim- The Warren Buffets of today mirror my mentor John McCoy and he was a believer in always be able to charge interest, and don’t pay it. If you think about what Warren Buffet’s saying, it’s basically the same thing, just in more modern terminology. In the early years our big goal was to pay our bills on time and continue to take any cash discounts that were available. Many times, in my earlier years, our profit was the cash discount. We were able to save and pay the bills on time and take advantage of those discounts. That has not become nearly as prevalent in today’s world because we have become more of a “just in time” world. For example, with technology, we could be paying bills on a weekly basis now, and in some cases, paying them the next day – and not getting any discount for paying so fast/
JB- Alright, so yeah we’ve got communication is a key, profitability – you want to make sure that you understand your profitability and – speaking of profitability: What do you think John McCoy would have to say about the rubber credit to cash income ratio that a lot of independent dealerships… – the plight of the independent dealership seems to be – we’re getting pressures from both angles ya know? The more consolidation there is of our customers and the big fleets and they’re doing manufacturer-direct deals constantly, and we’re constantly paid in “rubber credits” – We have a lot of different pressures. You can make a lot of money with National Accounts but you really can’t spend that money on taxes or lights or
Jim- Employees or anything
JB- But more tires, – and hasn’t that been what took down a few of our peer organizations?
Jim- Two things I think impact that: one, we’ve discussed already, thoroughly – is cash flow. If you have a good cash flow, obviously it takes cash flow, money in your bank, to pay for employees and to pay for rents and leases and various other expenses that any business has. You’re correct, you can’t pay for those with tire suppliers’ or retread equipment suppliers’ rubber suppliers’ credits– but if you continue to grow your business on the basis of knowing that’s the case, and you manage your inventories, so that your cycle of payments is governed by your volume of business and your return credits, which become due and usable probably within 3 to 5 days of your sale, under normal conditions, your credits will be available for you to pay your bills, and use your cash to pay the bills that the credits wouldn’t be able to impact. That’s the way we’ve always done it. I think earlier in our conversations we talked about the amount of business that used to be – 10 to 15% – of that type of national account/credit/back business, as opposed to checks and cash and credit card receiving business and now that’s almost reversed totally, 85 to 95 of that kind of business, and then 5 to 10% of cash in your cash-drawer business. Total management of all of your cash positions and your credits and, by the way you have a controller that’s been on the job for a year or two, he has a modern computer system that is designed for commercial and tire-type businesses, and it gives him the ability to see what all he has due and payable and what he has due and payable which can be done with cash. In the past we didn’t have those skills but by the same token the percentages weren’t as they are today either. No question that that’s a – that impacts a lot of businesses and even in your short 15 year career – full time career – you’ve seen the demise of certain businesses, because they’ve mismanaged that, and they’ve also mismanaged seeing how to continue keeping their credit lines available and their cash flows available and that usually happens by uncontrolled expansion or uncontrolled wages or other kinds of expenses that will impact that so much more quickly than you even notice. As an example, just think of sales tax. In the last 20 years sales tax has gone from just 4 or 5% of everything we sell, to 8 or 9-10% of everything we sell, and that has to be paid monthly. And it has to be taken right out of your bank. It’s not something that you just ignore, they will get it. You have to constantly be thinking of all those things that are possible detriments to your cash flow and your business in general. I think we’ve done a really good job of doing that. We have one of the principles in the business recently achieved his MBA, with the hopes of having more oversight in the accounting side of the business and knowing all these things that we’re currently discussing that have developed over the last 50 years.
JB- You talking about me? Yeah – but all I want to do is do internet articles (chuckling)
Jim- Well, uh, (not chuckling) again, as long as we know that, (now chuckling) then we make adjustments, with people and personnel. Keep in mind that those are things that have to be done in order to keep the business viable and healthy and moving forward.
JB- So, strategy-wise, for Marc and me going forward, anything, 30,000-foot view, to share? I mean this is some great stuff – the idea of keep an eye on your cash, be aware of upward pressure – we’re getting pressure on a few different sides, right? Sales tax is going up, local-book to national account ratio going down, so those are some pressures, and then talking about being a servicing agent, Maybe it’s time that… What’s your approach towards change? Or in other words; How do you deal with or how do you approach change? I mean you’ve made some drastic changes during your career. For example, you had a conversation in the early 90’s with Jim Law from a large fleet and decided there was an opportunity there – and a lot of dealerships – a lot of your peers, in retreading with independent franchises could have seized that opportunity but did not. Doing so required you to make a substantial investment in spare wheels, and you went ahead and did it, and 31 years later, we’re still this large fleet’s supplier and that’s a major part of our operation. Going forward, as far as for Marc and for me, what kind of things is there – is there any way we can kind of know besides ‘follow your gut’ what the right way to (Chuckling) go is?
Jim- Yes, briefly, in regard to the large fleet thing, at that time, the business wasn’t totally seasonal in retreading and or new tire sales, but I can assure you that it was somewhat seasonal. And so, you have a big investment in a retread shop and it probably ran a maximum of 44 tires/day, and so, we were already thinking about some growth. John McCoy had relinquished control of the retread business and it had been brought into the truck tire corporation and we were looking for ways to use the plant year-round. In our particular market place, we had 3 or 4 counties under our franchise but all of them were agricultural driven – and so that’s kind of a seasonal thing, “and so let’s kind of look for something that can keep our shop somewhat busy all year long” was the thinking. And when that deal became available, we were kind of under-utilizing our facility and so, “gosh here was an opportunity: This group has the largest ownership of trucks in the country. It was great, man if we could figure out a way to take on them, man if they liked us, and we liked them, we could kind of keep our shop busy all year long.” That was the idea behind getting involved with this large rental fleet. Yes, it took some capital because they had some requirements, but I felt like they were honest people to deal with, the margins weren’t as great as we would have liked to have had them, but it was full time. So, like you say, 31 years later, it’s still the most important account we have because it lets us run year in and year out – their tires. It’s taken a lot more capital over the years invested on our part, with technological advancements, and controls that they need to have to run a nation-wide asset business. Which they’ve got tires, and there’s 50 or so dealers in the country, and they’ve got tires and wheels located at all of those. And trying to manage that with all their locations for service is a major undertaking. We’ve been able to do that, in my view, quite successfully with Paul Ange, who has been in the leadership role with them since our beginning with the world’s largest rental fleet. I think that, with respect to change, that was the first change we took on, from a small business, kind of locally, to a becoming a business that was going to the Bay Area, going to the other ends of the Valley, going farther into Northern California. That allowed us the opportunity to start soliciting other business within the state because we were already going to these fleet-servicing locations, let’s say with a half-full truck, and now we could figure out a way to solicit other business to make that truck, full – going here, going there, and with their help. I look to that particular large fleet as having been a big advantage in helping our growth over the last 30 years and so I constantly harp at everybody in our organization, management included, the value of this lease fleet and the importance of them, being, in our minds, the #1 customer we have.
JB- Excellent, yeah, I agree. That’s the way you trained me and that’s how I feel about it and I remind everyone in the group, constantly, whenever necessary, most of the time I don’t need to, but when I do, ya know – Their #1. It’s a simple deal.
Jim- That was the beginning of change and I think probably, for the next ten years I didn’t resist change but kind of ignored it as much as I could. Getting into computers and staying with a kind of antiquated computer system until just the last couple of years. We made the old computer system work but it was pretty costly to make it work and it didn’t give us near the information that we needed. The computers of today, that we now have installed, help the management team so much more by knowing so many more things that we didn’t know that we just kind of guessed. Had we not changed I think our growth would have been continually limited. Now I think we’re able to accept those new, modern changes. Especially me, and I keep that-a-boy-in’ my management team to keep embracing change.
JB- Yeah, I do know we did go to Basys however in 2007. I always thought of us as kind of a group that wanted the latest and greatest, but we just kind of wanted to be sure it was the greatest, ya know?
Jim- I agree. I believe a lot of that, not to be-labor anything, but a lot of that was driven by our relationship with that large leasing fleet, and that large leasing fleet needing more and more information for their asset management. I think in fact that’s the term they used to use way back. We became more receptive of change to continue our relationship there.
(editor’s note- Both JB and Marc and all other Fleet Program Assistants have always kept a balance of casing transactions for Large Fleets. Basys computing offered a back up to this balance.)
JB- Yeah, absolutely. Speaking of McCoy’s, and you mentioned Paul Ange as one of our leading salesmen, you also mentioned Joey Jones earlier and I was recently at a dealer conference with a guy named Lionel, who’s a kind of a Jim Barnick of a local group of tire shops, and he was asking if Paul Ange was still here. Lionel, just kind of in passing, just says ‘Have you thought about what you’re going to do when guys like him retire?’ Whenever he retires, we could have some strong headwinds. We’ve got some big shoes to fill in terms of it would be pretty hard, if not impossible, to train someone to walk that, do that, and do all the things that he’s been able to do, and Joey also has been able to do. People say change is not a bad thing but the other side of this is that… while we’re at this dealer conference, they had everybody stand up – one of the consultants that was speaking, said “everybody put your hand up. Ok if you’re a baby boomer put your hand down.” And in this conference of dealer principles, across North America, about 20% only, put their hands down. That means that 80% of the guys in that room were basically my contemporaries, they were generation X. Paul and Joey
Jim- I think in response to that, a couple of points: first of all, with Joey Jones and Paul Ange, obviously there will be a day when they decide to float into the sunset, and the time they have left on Earth, and depending, and in both cases I don’t think that’s going to be very soon. Particularly, one of the two’s father worked late into his 70’s, and I suspect there will be not nearly that long with those two individuals, but time will tell. Marc and I are constantly looking for people to bring on board. We’re both believers in there’s a few good people out there that are in the business, that want to work at a place like ours: reputable, with all product lines available, plenty of financial support, plenty of good integrity-driven history. Obviously, there’s some tarnishes along the way that any business is going to develop, we continue to try to overcome any of those and correct them. And even the ones that aren’t corrected we kind of totally and always recognize and try not to ever let those happen again. There’s going to be people in business that would rather deal with someone else, due to several reasons; friendships, bad experiences, what have you? But –
JB- No. I know that on the retread side, as far as the technicians goes, I almost every time start from scratch.
JB- I got four that I inherited from John McCoy, and the rest, to have all 18 of them, I probably hired 41 and trained as many.
Jim- Exactly, and it’s the same with the salesmen. We recently, in the last couple years, were fortunate. A young man who had worked at a number of the locations in our Northern California area chose to apply with us and we had a good understanding of each other’s skills and abilities. He chose to go with us and he’s been nothing but a success and we continually are looking for people like that.
JB- You talking about Lalo?
Jim-Yes, I am. Lalo Madrigal. Rounding out this part of our interview: we’ve accepted change. Change continues particularly from the government side, with controls over our scrap tires, controls over our tires we haul in our vehicles, and all those sorts of things. That’s not necessarily been a positive for the industry, but it is what it is, and we’ve been told many times that we’re one of the very, very, best adherers to the tire waste management rules and regulations.
JB- From the conference that I recently attended the hot question was, that I’d be silly if I wrote an article and didn’t address is: “Does your Dad still work?” People seem to always want to know that, so I explain that you’re still working, and that you’re working three days/week, and that you’re going through the casings, but to hear you talk about ‘relinquishing control’ a couple of times: and I don’t know how to, how would you, how would you talk about – Who’s in control of McCoy Truck Tire at this point?
Jim- There’s two ways to look at that, and the way we’ve chosen for it to be controlled is by the distribution of the stock ownership of the corporation. Currently, our daughter, Audra Barnick Finnegan and her husband Marc Finnegan, together have controlling interest of the outstanding stock in McCoy Truck Tire. The business ihas a President: Marc Finnegan, it has a CEO: James H Barnick Sr., it has a Vice President: JB Barnick, and secretary: Audra Barnick Finnegan. So, that basically is the fundamental structure of the business, and when you ask; “Who’s in control?” – The Board, meets, several times a year, in addition to our formal meeting once a year, and the business is kind of run on the basis of The Board’s direction. But in answer to that question- I’m not avoiding it, Marc Finnegan is the President and oversees the day to day operations.
JB- Good. Excellent. I want to thank you for blazing the trail and creating an opportunity for me for my work and everyone else; I think on behalf of McCoy Truck Tire, we are just severely grateful for everything you’ve done for the last 50 years. “I love my job!” and so I kind of realized that was something I wanted to adopt as our slogan in the manufacturing division and that’s what we do: We love our job and so we’re grateful for you and your hard work to secure this opportunity for us and being a kind of connection with the customers that has created our opportunity for employment. Congratulations and thanks for your service.