Vulcan International Corp. management deserves credit for taking steps to diversify the company away from the dying domestic footwear business. It also deserves one negative comment: What took so long?
Footwear once was a thriving market for the rubber product industry. But shoe companies—particularly the athletic footwear makers—have spent the last couple of decades chasing the cheap labor dollar. Most production today is in developing nations like Indonesia, India and China, much to the detriment of U.S. shoe components suppliers.
Here's how bad it has been for Vulcan: In 1972, the company had 4,000 employees and derived 90 percent of its $35 million in sales from the shoe market. Twenty-five years later, employment was down to 148, sales to $13.7 million and the shoe sector produced only 50 percent of the firm's revenue.
At least Vulcan remains in business, unlike many of its peers. And the company is trying to remedy its problem.
The manufacturer has spent $3 million to develop a bulk rubber and plastic foam line, to go along with some existing non-footwear rubber goods production. Additionally, Vulcan's Clarksville, Tenn., factory has 50 million pounds of annual mixing capability, and is using its excess capacity to serve local rubber processors.
It's hard to break ties with the past, and Vulcan still hopes to obtain some footwear business. That's fine, but the company is being logical by moving into more promising areas.