So what was the rubber industry like in 2006? Check back in five years or so.
Huge events that are bound to have an impact occurred, and are occurring, in the business in 2006. From contraction in the tire manufacturing business, to expansion by non-tire companies, to aftershocks from the supplier price-fixing scandal, much happened that is certain to affect the industry for years to come.
Here's one list of Top 10 news events, voted on by the editorial staff of Rubber & Plastics News. Feel free to devise your own.
1. Sea of change in tire production
Canada and the U.S. fast are becoming the site of high value-added tire production-and not lower-margin passenger tires.
In the past year Michelin, Continental Tire North America Inc., Bridgestone/Firestone and Goodyear all announced plant closings and/or production cutbacks. The reasons varied in degree, but the consistent theme was that production of lower-end tires in North America can't compete with plants in less-expensive areas of the world.
To pour salt on the wounds, the year-end report of tire shipments from the Rubber Manufacturers Association noted tire demand in the U.S. tumbled 4.5 percent in 2006. Next year is expected to be marginally better-a 1.4-percent increase.
2. Steelworkers walk out-or is it walk the plank?-at Goodyear
The seemingly endless negotiations over a master contract between the United Steelworkers union and Goodyear did come to an end on Oct. 5. The workers went on strike.
Among the holdups in the talks was job security, which the company said it couldn't guarantee, and proved about a month later when it announced the closing of its Tyler, Texas, plant. As of now, no end in sight for the labor dispute.
Meanwhile, Michelin settled with the Steelworkers on a master contract, and BFS workers are waiting for Goodyear to iron out an agreement before returning to the table.
3. Trelleborg movin' and shakin'
You'd need a scorecard to keep track of all the moves by Sweden's Trelleborg A.B. in 2006, including some major ones in the U.S.
The big news in this part of the world was the firm's planned $178 million purchase of Reeves Brothers Inc., which will expand significantly its production presence in the U.S. The Reeves deal is one of eight announced or completed acquisitions in the global rubber industry in the past 12 months by Trelleborg.
On the other side of the equation, the company in November said it would phase out its industrial tire plant in Hartville, Ohio, the one-time Monarch Industrial Tire Co. operation, and was contemplating other closures and divestitures in its automotive business.
4. Cooper takes on water, captain abandons ship
Times are tough for Cooper Tire & Rubber. Six-consecutive-quarters-of-losses tough.
The tire maker struggled to get its tire production venture in China up and running, announced 500 layoffs at its Texarkana, Ark., plant, and cut unprofitable tire lines to drag itself out of the red ink. In August it said goodbye to Thomas Dattilo, who as the top executive at the firm for more than seven years was the architect of many of Cooper's production, image and marketing decisions.
By the end of the year Dattilo had yet to be replaced. Interim CEO Byron Pond expressed confidence Cooper was back on course, if not quite ready to declare profitability was dead ahead.
5. America the beautiful, as a manufacturing site
Surprise! Some companies are quite happy to be manufacturing in America, and spending dollars to prove it.
Titan International Inc. ultimately won the ``Buy Bryan'' derby, purchasing the Bryan, Ohio, off-road tire plant from Continental Tire, which had been in play for 18 months. An investment company and managers at Avon Automotive Inc. plunked down $115 million to buy the Cadillac, Mich.-based manufacturer, while Fenner Dunlop Conveyor Belting Americas decided $80 million was a good amount to invest in two U.S. operations.
Freudenberg-NOK G.P. continued to grow through acquisitions, snatching up Helix Medical and Imperial Rubber & Urethane Corp.
6. Shake-ups in the supplier section
Suppliers in the rubber industry were coming, going and expanding in 2006.
Hardly content after buying DSM Copolymer Inc. last year, and jointly purchasing what today is Excel Polymers a year earlier, Lion Chemical Capital Inc. agreed to acquire Chemtura's EPDM and rubber chemicals business.
When completed, Chemtura's role in the elastomer business will be limited to polyurethanes. Similarly, Teknor Apex Co. moved to phase out its rubber division but remains a thermoplastic elastomer supplier.
ExxonMobil Corp. announced an expansion at its Baytown, Texas, halobutyl plant, and the addition of a specialty compounded products facility at its Baton Rouge, La., complex.
7. Natural rubber pricing unnatural
Back in the day, natural rubber-producing countries squawked about low prices. They have nothing to complain about now.
NR prices hit 20-year highs in 2006, in large part because of high demand in China and other Pacific Rim countries. The lofty price helped boost the fortunes of some synthetic rubbers, as some rubber processors turned to substitutes for NR.
The high cost of oil, and its subsequent effect on oil-based rubber chemicals and materials, kept supplier prices high and was cited in many a poor financial report by rubber product makers.
8. Cost is kaiser at Continental Tire
It was all about profitability at Continental Tire North America this year, much to the distress of United Steelworkers members.
The company demanded its U.S. plants be as cost-competitive and profitable as others operated throughout the world by parent Continental A.G., which meant a demand for $32 million in labor cost cuts at its Charlotte, N.C., factory. The Steelworkers wouldn't budge, and Conti closed the factory.
Fair being fair, Conti also sliced wages at its non-union Mount Vernon, Ill., facility, although it did announce a major investment in the plant. The firm also decided to completely shut down the mostly closed Mayfield, Ky., factory.
9. China: The dragon keeps roaring
Five years ago the word ``China'' appeared in 64 stories in this publication. This year, 182.
If a rubber industry company isn't producing, exporting to or seeking a partner in China, it at least is worrying about losing business to Chinese firms. Continuing the recent trend, all North American rubber manufacturers were hit with one effect of China becoming a rubber industry power: supply availability and prices. China's huge demand for supplies has had a continuing impact on global prices.
Both rubber processors and suppliers-from Cooper Tire to Excel Polymers to GPX International Tire Co.-were involved in enhancing production in China, including expansions, joint ventures and outright purchases of Chinese companies.
10. Neoprene subject of closing, investment, tariff fight
Neoprene tariffs and a plant closing riled several rubber product companies and workers at a DuPont Performance Elastomers plant. In the end, the supplier got its way.
The synthetic rubber producer announced the March 2007 closing of its Louisville, Ky., neoprene plant, while it invested in production of the rubber at its Pontchartrain, La., factory. That didn't sit well with the 200 employees in Louisville.
At the same time, Gates Corp., supported by several other rubber product companies, sought to have duties reduced on neoprene imported into the U.S. from Japan. The International Trade Commission, however, sided with DuPont Performance Elastomers, the only neoprene producer in the country.