Year in Review: COVID-19 shakes up rubber industry

The year is one that many people would love to forget, or at least put in the rearview mirror. But that will not be done easily in life, business or the rubber industry.

As the world looks back on 2020 and ahead to 2021, uncertainty remains as the impact of the COVID-19 pandemic—without a doubt this year's biggest story—will linger.

Health officials in Wuhan, China, officially reported clusters of patients with pneumonia on Dec. 30, 2019. In just three weeks, on Jan. 21, the first case on U.S. soil was confirmed in a man who had traveled to Asia.

It was less than a month later, in late February, that the first case of local transmission in the U.S. was suspected.

By the end of March, the virus had spread globally and economies ground to a halt as hot spots emerged.

In the U.S., multi-faceted COVID-19 relief initially came fast in response to the spring lockdown, helping many businesses by pumping hundreds of millions of dollars into the economy. Those efforts included the Paycheck Protection Program, which gave companies funding to keep payroll intact and pay bills as revenue dried up. Rules surrounding PPP, which provided lifelines to those in rubber and tires and beyond, later were altered to help make it easier on businesses to cover costs and comply with program rules.

The money served as a cushion during uncertain times when scientists still were in the early stages of trying to figure out how to best combat the virus. It served to buy time for manufacturers and other businesses until they could figure out how to reopen safely.

Safety measures such as plexiglass and personal protective equipment now are considered the norm. But it took time for operations to figure out how to best create safe working conditions for their staff as the economy slowly reopened over time.

COVID-19 wasted little time putting its mark on the rubber industry, including its highest profile application in tires.

Global shutdowns
By late March the coronavirus had spread globally, and in April tire manufacturers around the world moved quickly to idle production.

Goodyear was the first to do so, saying March 17 it was shutting down operations, first in Europe and later in both North America and South America.

Michelin quickly followed suit, indicating on March 19 the company temporarily would close facilities in European countries most impacted by COVID-19. Just two days later, the company disclosed a phased suspension of production in the U.S. and Canada.

Michelin kept production of certain tires deemed "vital and critical" to the economy.

Bridgestone Corp. initially moved to close plants in North America and South America before making similar moves in Europe.

Ultimately, Apollo Tyres Ltd.; Balkrishna Industries Ltd. (BKT); Continental A.G.; Cooper Tire & Rubber Co.; Hankook Tire & Technology Co. Ltd.; Kumho Tire USA; MRF Ltd.; Nokian Tyres P.L.C.; and Pirelli & C. S.p.A. also would temporarily halt production at plants worldwide.

Tire companies also devised plans to protect workers and address a sudden slump in demand. During the temporary production stoppages, health and safety measures were implemented to protect workers upon their return.

USW, Kumho spar

Kumho's tire plant in Macon, Ga., which had long-brewing tensions with the United Steelworkers union regarding unionization at the plant, faced allegations from the United Steelworkers that it had not taken proper steps to protect workers from the coronavirus.

The USW claimed Kumho failed to distribute masks, supply sanitizer or take other common-sense steps to prevent a COVID-19 outbreak at the Macon location. It also alleged the company refused to regularly and thoroughly disinfect the factory or give details about the number of workers who have tested positive for COVID-19.

Kumho countered by saying it was following the guidelines of both local authorities and the Centers for Disease Control and Prevention. Kumho said COVID-19 efforts include employee education, a tele-medicine program, installation of hand sanitizers and anti-bacterial soap throughout the facility, social distancing and room occupancy limits in high-traffic areas.

Meanwhile, Bridgestone Americas Inc.'s Firestone agricultural tire plant in Des Moines, Iowa, had at least 24 employees test positive for coronavirus. The company worked hard to keep the virus from spreading more, laying out its COVID-19 plan, an Environmental Health Safety & Sustainability Playbook, prior to reopening tire plants in mid-April. The plan included many things from enhanced cleaning measures to ongoing education to changes in the sick leave/absenteeism policy.

Supply chain disruption

At the same time companies were learning to manage safety, there were supply chain challenges.

Tire production in China initially was impacted before operations in the U.S. and Europe. While these operations shut down first, they also were able to reopen even as locations in other parts of the world were struggling with the new realities of COVID-19.

Auto makers temporarily padlocked their doors, causing orders for tires for new vehicles to fall as consumer demand for new vehicles dried up with shelter-in-place orders implemented in the U.S. and across the globe. This put off replacement tire purchases in the short term as consumers worried about cash flow.

As stay-at-home orders eased, demand for tires again increased. The summer brought stronger sales in the replacement tire and automotive aftermarket.

GM, Ventec team up

Rubber played a part in some high-profile efforts to help combat the virus, including a ventilator project that saw General Motors Co. team with Ventec Life Systems to build 30,000 units.

GM repurposed a portion of its Kokomo, Ind., factory to create a space to churn out 30,000 ventilators designed by Ventec, which typically made the machines at its main site in Bothell, Wash.

The two companies, at the request of the federal government, came together early on during the pandemic, when the country was facing a shortage of ventilators. Ultimately, the new Indiana production space sprung to life with a $489.4 million federal contract and was able to complete construction of the 30,000 ventilators in 154 days.

That amounted to production of a ventilator about every seven minutes on average, the companies said.

After GM fulfilled its contract with the government, the auto maker turned operational control of the Kokomo ventilator manufacturing site over to Ventec, which later said it was preparing to stop production there by the end of November, but would continue production at its headquarters sit in Bothell.

BRC steps up

BRC Rubber & Plastics Inc. of Fort Wayne, Ind.—a maker of rubber, silicone and plastic parts—jumped in quickly to help with the ventilator project.

The company heeded a call for help from GM early on and ended up supplying six different parts from its Churubusco, Ind., facility, company officials said earlier this year.

Making parts for the automotive industry is BRC's main business, and a close relationship with GM convinced the company it needed to step up and do whatever was needed to help with the ventilator effort.

"It's a pride. It's a humanitarian effort. 'No' is not an option. It's got to be done and we're going to do it," said Scott Wellman, director of sales and marketing at BRC.

Silicone ups, downs

During the early days of the pandemic, companies and governmental officials alike sought to establish just what and who was needed to keep essential services up and running.

It was quickly determined that those in vehicle repair, maintenance and transportation equipment manufacturing and distribution would be allowed to continue, providing the opportunity for a variety of rubber-related companies to keep their doors open.

In early May, an official from Shin-Etsu Silicones of America Inc. said the silicone market supply chain had righted itself compared to previous years when demand outran supply, causing both upstream producers and downstream customers to experience price volatility.

"The short answer is yes, things are pretty well balanced now," said Eric Bishop, Shin-Etsu Silicones' marketing manager is North America. "But this was prior to the coronavirus crisis. It is better than two years ago when there was a tightness of the supply chain and volatile prices. This has pretty much resolved itself—not because demand has gone down but because capacity has increased."

COVID-19 then brought uncertainty for silicone in some markets as demand for both automotive and commercial aviation dropped, but remained strong for defense, aerospace and construction early on. Medical and health care silicone applications, meanwhile, rose significantly, as did the need for more disposable gloves.

General Silicones, which makes products for a variety of applications, including automotive, packaging and information technology, saw demand skyrocket in the medical market as COVID-19 spread around the globe.

Medical glove demand

Difficulty early on securing enough PPE for medical workers in the U.S. spurred moves to expand domestic manufacturing efforts, including separate glove projects in Kentucky and New Hampshire.

Renco Corp., through its American Performance Polymers L.L.C. unit, plans to expand and install two new high-speed glove lines. The company wants to increase production by 20-fold to about 500 million gloves per year through this initial work that will include improvements to existing machines.

Newly formed U.S. Medical Glove Co. also revealed plans to open a glove facility in Kentucky. It's a project that will create 192 jobs and produce more than 1 billion gloves annually.

COVID-19 also convinced glove maker Showa Group to double production at its Fayette, Ala., facility through a $20 million project. Two new lines each will produce about 200 million gloves per year, a doubling of previous capacity, the company said in October.

Extra space has been constructed and the new equipment was arriving for the expansion that's expected to start producing additional gloves in April, the company said.

Additional PPE

AirBoss of America Corp., meanwhile, has been awarded several rounds of governmental contracts for its respirator systems and personal protective equipment.

Space at the company's Auburn Hills, Mich., factory was converted to make protective products as the demand sharply increased during the year. That facility primarily had been focused on automotive parts but saw demand in that sector drop as the pandemic tightened its grip.