Published on January 2, 2014

OTHER VOICES: Firms spent more time on court trials than product trials

AKRON (Jan. 2, 2014) — This is the time of year to review the happenings of the past 12 months.

When looking through the collection of events that dotted the rubber industry landscape during 2013, it’s hard not to notice the amount of time spent in court last year.

The collection of cases covered deals gone bad, price-fixing, long-running infringement claims and environmental issues.

At the forefront was the battle over Apollo Tyres Ltd.’s proposed $2.5 billion purchase of Cooper Tire & Rubber Co. The case stemming from troubles with the acquisition sits in court, and the deal appears to be dead.

Other court actions have gone across the oceans as well. China’s Sino Legend (Zhangjiagang) Chemical Co. Ltd. and SI Group Inc. of the U.S. continued to wage a legal war over the rubber tackifier resins both make. Each firm tended to gain favorable rulings in its home nation.

And a French union chose Goodyear’s hometown of Akron as the venue in which to sue the tire maker, claiming the firm violated French labor law in deciding to close a factory without informing the union.

On the price-fixing front, a jury found Dow Chemical Co. guilty of conspiring to fix prices for urethane chemicals, with the judge ordering the firm to pay $1.2 billion in damage. Dow has appealed the case, which has stretched on for more than eight years.

More than 20 companies that supply the automotive industry—including Yamashita Rubber Co. Ltd. and Toyo Tire & Rubber Co. Ltd.—also admitted to price fixing charges. The Department of Justice thus far has levied close to $2 billion in fines.

All this just goes to show that the rubber industry is an ultra-competitive business. While some of the cases may stem from an honest difference of opinion, others can be attributed to that small minority of firms and executives who choose to circumvent the rules to seek any competitive edge possible.

Let’s hope that those who do choose to deal honorably win out—and that the stories in our publications and websites read less like a court blotter in 2014.

This editorial appeared in a recent print edition of Rubber & Plastics News, an Akron-based sister publication of Tire Business.

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