|Transcription||Will Keep Brand Name
To Modernize Seiberling Plant
By JOSEPH KUEBLER
Business and Industrial Writer
Firestone is ready to move into full-scale modernization of Seiberling Rubber Co.'s Barberton tire plant once Federal agencies approve the sale, Firestone officials announced today.
Word that Firestone was the purchaser of the Seiberling tire division came late Thursday—ending intense speculation that had begun Tuesday with a Seiberling announcement of a sale to an unnamed buyer.
INDUSTRY sources estimate Firestone is paying from $30 million to $35 million for the tire division. In addition to the plant and land, this figure covers the inventory, working capital, pension fund and other assets.
Firestone President Earl B. Hathaway said Firestone would update the plant—now employing about 1,450 in production and office jobs—with the newest equipment.
What does the sale mean to the two companies?
FOR FIRESTONE—already the second largest rubber company — it will acquire an old and reputable name to "aggressively promote" (as Hathaway put it) the Seiberling tire products through an extensive and existing dealership system—1,200 franchised dealers and some 3,500 associated dealers.
FOR SEIBERLING — It
will use the money to pay debts and strengthen its standing in its other fields, which include shoe products, rigid plastics and automotive mats. It will take on a new name "Seilon" (presently one of its plastics trademarks). Location of its new headquarters was not announced.
Firestone was identified as the buyer in a joint statement made just after a Thursday meeting of the Seiberling board of directors.
This was held at the Cleveland Hopkins Airport Motel Thursday, where the board approved the sale contract.
Firestone's plans are to set up the Seiberling division as a subsidiary — a separate corporation.
IN WASHINGTON, a Justice Dept. spokesman said the Federal Trade Commission (FTC) is considering the sale, and that Justice's anti-trust division has asked to review it. The spokesman said FTC has not responded yet to the request from Justice. FTC had no comment.
It may take weeks before the necessary Federal clearances are acquired.
The stock market responded, however — with Seiberling quoted up 1 1/4 today to 14 1/2, and Firestone edging up 1/8 to 43.
There are about 1,100 production workers and about 350 office personnel at the Barberton plant.
Seiberling President H. P. Schrank declared the sale will "enhance the job opportunities of our employes and the investment of all our distributors and stockholders."
SCHRANK himself will stay with the tire plant, continuing an association with the Seiberling name that goes back 38 years. He started with the firm in 1926 as a tire engineer in the development department.
If and when the sale gets
Governmental clearance, Seiberling stockholders will be asked at a special meeting to give their approval. Since Board Chairman Edward Lamb and his family hold stock control, this will present no roadblock.
Stockholders also will be requested to approve the directors' recommendations that the name "Seilon Inc." be adopted for the company after the sale of the tire division.
Seiberling's other plants, not included in the sale, are located in Newcomerstown, O., Batesville, Ark., and Hagerstown, Md. and have a combined employment of 500.
IN THE CONTRACT approved by the Seiberling board Thursday, Firestone agrees to purchase the company's entire tire business, including plant, buildings, equipment, warehouse facilities, brand names and trademark.
Firestone, in establishing a new wholly owned subsidiary, would be doing as it did early in 1961 when it acquired the tire business of the Dayco Corp. of Dayton and set up a new corporation, Dayton Tire & Rubber Co., to operate the facility.
The Dayton tire division accounted for 30 per cent or about $30 million of Dayco's sales in 1960, its last full year. In Seiberling, Firestone is buying a tire operation that has been producing 80 per cent or $40 million of that firm's business, although operating at a loss recently.
The Justice Dept. and FTC review is to determine if the sale would contribute to a monopoly and be in violation of anti-trust laws.
This procedure is followed in all contemplated mergers or other business transactions, particularly when a major producer in an industry seeks to acquire a smaller concern.
OFFICIALS of both firms are optimistic that the federal agencies will raise no objection in view of the consistent losses of Seiberling's tire division.
In expressing his company's pleasure over the action of the Seiberling board, Hathaway said Firestone will withhold any further comment on its plans "until we have been appraised of the clearance by the Federal Government." |