Eighty-two years after opening as a tire recapper, Teknor Apex Co. is phasing out its rubber division, eliminating 150 jobs.
Pawtucket, R.I.-based Teknor - one of North America's largest plastics compounders - announced the move Aug. 22. The firm had made rubber compounds in Pawtucket and Brownsville, Tenn.
President Jonathan Fain said the rubber division ``has been operating at a loss for some time'' as rubber manufacturing has shifted overseas and new materials have replaced rubber products.
``The high cost of oil [also] has had a major impact on the car market,'' Fain said in a news release. ``Smaller cars mean smaller tires, which means less rubber.''
Teknor's rubber division employs 190 at the two sites. Of those employees, 40 are expected to take early retirement or transfer to other jobs at those locations. The remaining 150 positions - 85 in Pawtucket and 65 in Brownsville - will be eliminated.
``We're not happy about this, since rubber is where the company started,'' Teknor Senior Vice President Bert Lederer added in a phone interview. ``But the business has had a difficult time for a number of years, and it finally reached the point where we had to do something.''
Fain's grandfather - Alfred Fain - launched the firm in 1924 as Apex Tire & Rubber in Providence, R.I. Apex diversified out of the tire market by adding rubber mixing in 1945 and PVC compounding in 1949.
Privately owned Teknor does not release specific sales totals, but Lederer said the rubber division accounted for less than 5 percent of the firm's sales in 2005. Based on industry estimates, that means the division had annual sales of less than $30 million.
Officials added that growth in Teknor's other business units have offset losses in rubber. The firm added a new twin-screw plastic compounding line in Jacksonville, Texas, in June, replacing an older single-screw line. New compounding lines also will replace older ones in Lodi, Ohio; Fountain Inn, S.C.; and Henderson, Ky., by early 2007. Total investment for the project is about $3 million.
Teknor's compound lineup includes specialty PVC, thermoplastic elastomers and color concentrates.
The company - which also manufactures garden hose - expects to post sales of more than $600 million in 2006.