Uniroyal — BrandWiki

Uniroyal

Overview

Uniroyal

type	Subsidiary
traded as	NYSE: R (no longer traded)
foundation	1892
location city	Naugatuck, Connecticut
location country	USA
area served	North America
industry	Automotive
products	Tires, Footwear, Explosives, Ammunition, Chemical weapons
location	Greenville, South Carolina
parent	Michelin (1990–present, North America) Continental AG (1979–present, rest of world)
homepage	http://www.uniroyaltires.com/ (Michelin) http://www.uniroyal-tyres.com/ (Continental)

Uniroyal, formerly known as the United States Rubber Company, is an American brand of tires for cars, trucks, minivans, and SUVs, plus other synthetic rubber-related products, as well as variety of items for military use, such as ammunition, explosives, chemical weapons and operations and maintenance activities (O&MA) at the government-owned contractor-operated facilities.[1] It was founded in Naugatuck, Connecticut, in 1892. The brand has a separate global entity that produces vinyl-coated fabric and soft trim products. It was one of the original 12 stocks in the Dow Jones Industrial Average,[2] and became Uniroyal, Inc., as part of creating a unified brand for its products and subsidiaries in 1961.

The company's long-lived advertisement slogan was "United States Tires are Good Tires". One of Uniroyal's best-known tires is the Tiger Paw introduced in the 1960s and included as original equipment for that decade's muscle cars such as the Pontiac GTO, which itself was promoted as The Tiger during its early years.[3] Today, Uniroyal still uses the Tiger Paw brand name in its tire line.

Origins

By 1892, there were many rubber manufacturing companies in Naugatuck, Connecticut, as well as elsewhere in Connecticut. Nine companies consolidated their operations in Naugatuck to become the United States Rubber Company. One of the nine, Goodyear's India Rubber Glove Mfg. Co. (named Litchfield Rubber Co until 1847) – which manufactured rubber gloves for telegraph linemen – was the only company in which Charles Goodyear, inventor of the rubber vulcanization process, is known to have owned stock.

From 1892 to 1913, the rubber footwear divisions of U.S. Rubber manufactured their products under 30 different brand names, including the Wales-Goodyear Shoe Co. The company consolidated these footwear brands under one name, Keds, in 1916, and were mass-marketed as the first flexible rubber-sole with canvas-top "sneakers" in 1917.

On May 26, 1896, Charles Dow created the Dow Industrial average of twelve industrial manufacturing stocks, which included U.S. Rubber Company. When the average expanded to a list of 20 stocks in 1916, U.S. Rubber remained, however the listing expanded to 30 stocks in 1928 and U.S. Rubber was dropped.[4]

In an effort to increase its share of the automobile tire market in 1931, U.S. Rubber Company bought a substantial portion of the Gillette Safety Tire Company. The company was founded in 1916 by Raymond B. Gillette and its primary manufacturing plant was located in Eau Claire, Wisconsin. The Gillette plant held large contracts with the General Motors Corporation and with the addition of U.S. Rubber products, became one of the world's largest suppliers of original equipment tires. U.S. Rubber produced tires under the Gillette, Ward, Atlas, U.S. Rubber and U.S. Royal brands.[5]

In 1940, U.S. Rubber purchased the remainder of the Gillette Safety Tire Company, and began to expand and modernize the Eau Claire factory, greatly increasing production. During World War II, U.S. Rubber factories were devoted to production of war goods, and produced military truck and airplane tires, as well as the canvas-top, rubber-soled Jungle boot for soldiers and marines serving in tropical and jungle environments.[5] U.S. Rubber ranked 37th among United States corporations in the value of wartime production contracts.[6]

In 1942, the United States government restricted the sale of scarce rubber products for civilian use and production at the plant dwindled. The company sold the Eau Claire plant to the government, which then converted it for the manufacture of small caliber ammunition and renamed it the Eau Claire Ordnance plant.[5]

By December 31, 1943, the need for tires outweighed the need for ammunition. U.S. Rubber repurchased the plant from the government for more than US$1 million, and converted it back to synthetic rubber tire production. The company began an expansion and modernization program at the plant that lasted through 1951. When it ended, the Eau Claire plant was the fifth largest tire facility in the United States. The company again expanded the plant in 1965 to produce tires for construction machinery, and for many years it was the largest private employer in Eau Claire and the second largest in neighboring Chippewa Falls before it was closed in 1991.[5][7]

In late 1943, U.S. Rubber engineer Dr. Louis Marick developed a propeller de-icing system in which a rubber boot was fitted onto the leading edge of a propeller. The boot contained wires that conducted electricity to heat the edge and break-up ice.[8]

Englebert Company

In 1958, Uniroyal entered into a partnership with the Englebert tire company of Liège, Belgium, which became known as Uniroyal Englebert Deutschland AG. In 1963, the name was shortened to Uniroyal-Englebert, and in 1967 it became Uniroyal along with all company divisions. Uniroyal sold this division with its four factories in Belgium, Germany, France and Scotland to Continental AG in 1979. Continental continues to market tires under the Uniroyal brand outside NAFTA, Colombia and Peru.[9][10]

Dominion Rubber

Uniroyal operations in Canada were carried out under the name Dominion Rubber Company for a number of decades.

Dominion started operations as Brown, Hibbard and Bourne, established in 1854. In 1866, the company registered as the Canadian Rubber Company of Montreal Limited and became prosperous manufacturing waterproof cloth, rubber footwear and machinery belts. It began to produce auto tires in 1906 in its Montreal factory and through a series of mergers with other companies in Ontario and Quebec became the Canadian Consolidated Rubber Company Limited.

Uniroyal Goodrich Tire

In 1985, Uniroyal was taken private by its management and the New York investment firm of Clayton, Dubilier & Rice to prevent a hostile takeover by financier Carl C. Icahn. At the time, Uniroyal was the fifth-largest tire company in the country.[16] To help pay the nearly $1 billion in debt incurred in the leveraged buyout, the company sold its Uniroyal's Chemical subsidiary to Avery Inc. – a producer of agricultural chemicals, industrial chemical additives and specialized rubber and plastic products – for $760 million in May 1986.[17]

The remaining tire operation was merged with that of B.F. Goodrich Company, a S&P 500-listed tire and rubber fabricator that made high-performance replacement tires.[5] The joint venture partnership became the Uniroyal Goodrich Tire Company and B.F. Goodrich Company held a 50% stake in the new tire company.[18]

The new Uniroyal Goodrich Tire Company established its headquarters at the former B. F. Goodrich corporate headquarters, within its 27-building downtown complex in Akron, Ohio, which contained Goodrich's original factory. In the fall of 1987, the B.F. Goodrich Company closed several manufacturing operations at the site, and most of the complex remained vacant until February 1988, when B.F. Goodrich announced plans to sell the vacant portions of the complex to the Covington Capital Corporation, a New York developer. The complex is now known as Canal Place.[19]

In 1987, its first full year of operation, the new Uniroyal Goodrich Tire Company generated almost US$2 billion in sales revenue, with profit of about US$35 million. However, the merger soon proved to be difficult. In June 1988, B.F. Goodrich sold its 50% stake to a group of investors led by Clayton, Dubilier & Rice for US$225 million.[18][20] At the same time, B.F. Goodrich also received a warrant to purchase indirectly up to 7% of the equity in Uniroyal Goodrich Tire Company.[21]

Also in June 1988 as part of the sale deal, the new privately held tire company acquired publicly held debt of $415 million.[22] The Uniroyal Goodrich Tire Company offered the debt securities in two parts through underwriters led by Drexel Burnham Lambert Inc. The two instruments were a US$250 million issue of 14 1/8% notes due in 1998, and a US$165 million issue of 14 1/2% subordinated debentures due in 2000.[23]

For the year 1988, Uniroyal Goodrich Tire posted sales revenue of US$2.2 billion, while profit declined to about a third of the prior year, less than US$12 million, which included an extraordinary credit of nearly US$2 million from the purchase of Canadian annuity pension obligations, and also a charge of over US$16 million from the June 1988 recapitalization resulting from the selloff by B.F. Goodrich.[24]

Also in 1988, Michelin Group, a subsidiary of the French tire company Michelin et Cie (euronextparis: ML) proposed to acquire the Uniroyal Goodrich Tire Company, and began acquiring a stake.[5]

In 1989, Uniroyal Goodrich Tire Company posted sales revenue that was up to almost US$2.3 billion, but profit was down by 90% to just over US$1 million, but included over US$9 million extraordinary credit that year for the ongoing Canadian annuity pension obligation purchase. 1989 year-end net income results were also hurt by increased interest expense of nearly US$31 million on the June 1988 debt recapitalization, and a US$29 million charge for deferred employee compensation related to the proposed purchase of the company by Michelin Group.[24]