The rubber industry continues to get no respect on Wall Street. The stock market was on fire throughout 1999. In the fourth quarter alone, Standard & Poor's 500 Stock Index jumped 14.6 percent, the Dow Jones Industrial Average rose 11.2 percent and the New York Stock Exchange Composite advanced 9.7 percent.
The rubber industry? The share value of the 37 companies listed in the Rubber & Plastics News Rubber Industry Stock Index fell 9.4 percent.
Executives seemingly do everything the investor community demands to boost a stock price, to no avail. Tire and rubber companies strive for efficiency, cut staff and consolidate at the drop of a hat. Customers like the auto industry want systems, not parts: They got it. It's a global economy, and a rubber product maker has to have coverage throughout the world: They do it.
The reward—Wall Street treats rubber stocks like a pariah.
Goodyear is a case in point. The company's buy-out of the Dunlop operations from Sumitomo Rubber Industries Ltd., its aggressively global focus, its relentless effort to reduce costs and develop new products, are the kind of actions investors expect. None of this is cheap and easy.
Goodyear's stock performance in the last quarter of the '90s? The biggest dollar loss among its peers, $20.06 per share, a 41.7-percent decline.
The rubber industry has a long history of producing valuable goods that help society. But the only time the business got much attention from the stock market was during a the big takeover binge of the Reagan era.
Perhaps all rubber companies should add ".com" to their names.