The recent announcement by Michelin that it will close its Uniroyal and Goodrich plants in Kitchener has caused what amounts to an earthquakely shudder to the region's morale. There is more to this shocking revelation than a mere recession in the Canadian economy.

What we are experiencing is indeed a fully blown global recession in which the remedies may not be of the usual order that we are familiar with. The world economy is in a metamorphosis and until complete changes have taken place we may not see the boom we are anxiously awaiting.

The $48 billion-a-year tire industry is suffering due to a lower demand from the car manufacturers and a high debt ratio due to acquisitions among the industry giants. Last year Michelin lost $930 million worldwide, while America's Goodyear suffered a $38 million loss. Italy's Pirelli and Germany's Continental both had a decline in profits by more than half, while Japan's Bridgestone made small profits at home but suffered heavy losses in America.

It seems that the giant tire makers are struggling while small ones are somehow managing to show profits. The big ones mainly supply car manufacturers while the smaller ones are in the tire replacement business. Also by choosing to stay small and grow slower they are able to stay out of debt which is crippling the giants. Some of the larger tire manufacturers had to liquidate inventory in order to make payments on loans and in the process caused a glut in the North American tire market.

As much as we would like to see the recession slow down and hopefully recover so that we may enter a period of economic growth once again, the sad truth remains that 250,000 Canadians did lose their jobs in the last nine months and more still may do so. The economy is not unlike the tale of the one bone being connected to the next all the way down to the toes. Therefore until we can no longer put off buying those new tires for the old car, or trading in the old car for a new one (which will come with four new tires), the tire industry, just like any other industry will be slow in recovery.

The paradox is that we should be spending money on new tires, cars, and homes, when the economy is in a recession, so that the demand on these goods would create jobs in their respective industries; but we should be more miserly at times of economic well being so that our excess demand does not bid up prices keeping inflation at reasonable levels.

So, my fellow Canadians, open up those purse strings that you kept tied and stuffed under your mattress. Splurge ! Go and get yourself four new tires, better yet buy yourself a new car. What the heck, get yourself a new house while you are at it. Right now, it's the most patriotic thing you can do for your country.

This article was originally published in Cross Cultures Magazine in Volume 1 - Issue 1 - 1991. Unauthorized copying, distribution or other usage without express written permission of the publisher is prohibited.