Tire monitor manufacturer SmarTire Systems Inc. on Sept. 5 announced it bought its way out of a product licensing agreement with TRW Inc., opening a channel to suppliers and automakers who need to integrate pressure monitors into their wheels to pass upcoming tire safety regulations. Richmond, British Columbia-based SmarTire said it would pay TRW $3.3 million in cash and debt to cancel licensing contracts the two companies had forged in April 1998. Under the agreements, SmarTire had not been allowed to compete for sales to automotive original equipment manufacturers (OEMs). TRW, a maker of automotive and aerospace components, may continue to sell monitoring systems that use SmarTire technology and will maintain its 9 percent stake in SmarTire. Tire pressure monitors, standard in the auto racing world for years, have recently become a high profile consumer item following the passage by Congress of the Transportation Recall Enhancement, Accountability and Documentation Act (TREAD), which was signed in November 2000. The act, a result of legal and corporate chaos surrounding accidents and tire recalls involving Ford Motor Co. and its former tire supplier Firestone, will require the installation of tire pressure monitors on all new vehicles after November 2003. SmarTire stands to benefit, as one of only a few current manufacturers of the technology. "SmarTire now has total, unrestricted access to the OEM market," both domestically and in Europe, the company's president and CEO Robert Rudman said. "It's an unparalleled milestone for our company." SmarTire's system mounts a sensor on each wheel that collects information and then transmits a radio signal to an instrument panel within the vehicle. The company is still compiling financial projections based on the cancellation of the agreements, but according to Rudman, significant growth potential is ahead. More than 15 million vehicles are produced in North America each year, and versions of SmarTire's systems will sell for $50 to $100 per vehicle. "It's a huge market," Rudman said. "It's overwhelming when you start playing with the numbers." Only a handful of firms have emerged over the past decade to feed the tire monitor market, which had been sluggish until the recall of millions of tires made by Firestone, the U.S. unit of Japan's Bridgestone Corp., vaulted the issue of tire safety into public consciousness. Among the firms that have developed tire pressure monitoring systems are Germany's BERU Group, which has allied with U.S. parts maker Lear Corp.; Schrader Electronics Ltd. of Northern Ireland; and TRW itself. Many other auto parts suppliers are also exploring the potentially lucrative industry.