Business is great, sales and earnings are up, companies are investing in new capacity and processes. So why are so many rubber industry people facing layoffs? It's a phenomenon of business that rubber manufacturers cannot escape: When things are at their best, companies need to prepare for the worst, because when the worst comes it's too late to make any difference.
Toss in the highly charged competitive atmosphere of the rubber business, drastic product technology changes and the need for potential job-devouring automation, and it's understandable why job cuts occur despite apparent industry prosperity.
Several recent events give a snapshot of how companies are making tough decisions despite the seemingly good business climate.
In Jefferson, N.C., Gates Rubber Co. moved to convert its curved hose plant to power transmission production. V-ribbed belting is where the money is and will be, so it makes sense for Gates to make a change in that direction. However, the more-automated belting machinery will require 200 fewer workers and mean subsequent layoffs.
Another belt maker, Tilton Engineered Components, decided to shift production to a smaller, more-automated and more-efficient plant in Salem, N.H. Part of the cost is 25 jobs.
Meanwhile, the growing global nature of the polyurethane in-line skate wheel industry sparked a merger between Kryptonics Inc. and its competitor Bravo Corp. Ultimately, 80 of Kryptonics' 110 employees will be out of work. And in Union City, Tenn., Goodyear will ax 310 jobs and drop investment plans because the union didn't approve an around-the-clock work schedule.
Tough choices, but that's the cost of survival in an industry where hard times never are far away.