FAIRLAWN, OHIO — GenCorp Inc. announced Dec. 17 it will spin off its Performance Chemicals and Decorative & Building Products businesses to create a separate, publicly traded polymer products company.
Performance Chemicals is a major supplier of latex and related polymers to the paper, carpet and textile industries. The company's polymers are used to coat paper to make glossy stock used for magazines, binding on carpet and as a sublayer in diapers, according to spokeswoman Rosemary Younts.
Decorative & Building products is the largest worldwide supplier of commercial wall coverings, Younts said. It also produces wood-grain laminates, paper and vinyl laminates and commercial roofing membrane systems.
The two businesses will operate separately from Aerojet, GenCorp's aerospace, defense and fine chemicals segment, and Vehicle Sealing, which makes rubber seals for car and truck manufacturers, including Ford, GM and Honda.
Younts said the board of directors have determined that the two groups will be even stronger as separate entities.
``It makes sense to separate them and let them concentrate on their own products,'' Younts said. ``We are going forward with two very strong companies with lots of potential for growth on their own.''
Younts said GenCorp — as one company with extremely diverse products and client bases — was ``not very attractive to analysts and investors.''
``It is strong, but we are still selling stock at a discount,'' she said. ``We can now close that gap.''
Under the new structure, Aerojet and Vehicle Sealing will retain the GenCorp name, and that company's headquarters will move to either Sacramento or Azusa, Calif. Robert Wolfe, now president of Aerojet, will become chairman and chief executive officer of the company.
John Yasinsky, current chairman and CEO of GenCorp, will assume those duties for the new polymer products company, which will remain in the Akron, Ohio, suburb of Fairlawn, where GenCorp's headquarters is located.
GenCorp now employs 10,000 — 7,000 in Aerojet and Vehicle Sealing and 3,000 in the polymer products division.
``It is likely there will be some layoffs as we begin to figure things out,'' Younts said. ``But we don't know how many and we don't know when.''
The separation, which is the culmination of an 18-month evaluation by the board of directors, will occur in six to eight months, pending shareholder approval and approval from the Internal Revenue Service to allow the break to be tax-free to the company and shareholders, she said.
