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Structure, Personality, and Business Strategy in the U.S. Tire Industry: The Seiberling Rubber Company, 1922–1964

Published online by Cambridge University Press:  13 December 2011

Michael French
Michael French
Affiliation:
Michael French is a lecturer in economic and social history at theUniversity of Glasgow.
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Abstract

Small firms that operate in manufacturing sectors amenable to economies of scale are faced with particularly challenging strategic problems. This article on the Seiberling Rubber Company, a family–owned minor player in the U.S. tire industry, takes as its starting point the intersection between Michael Porter's typology of competitive strategies and the entrepreneurial theorists' views on the importance of the human factor. Against a detailed analysis of the changing structure of the tire industry over four decades, it examines closely the strategic decisions of one firm and its senior managers.

Type
Articles
Information
Business History Review , Volume 67 , Issue 2 , Summer 1993 , pp. 246 - 278
Copyright
Copyright © The President and Fellows of Harvard College 1993

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References

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19 The 1921 refinancing created new securities with a prior claim on Goodyear earnings, so Seiberling's Goodyear stock returned no dividends until the new securities were redeemed in 1927. For an outline of the refinancing see Allen, Hugh, The House of Goodyear: A Story of Men and Modern Business (New York, 1937)Google Scholar and O'Reilly, Maurice, The Goodyear Story (Elmsford, N.Y., 1983)Google Scholar.

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22 F. A. Seiberling to F. R. Wahl, 31 March 1930, box 66, FAS Papers. On the du Pont interest, see U.S. v. DuPont et al., “Memo re: The Wilmington Group Investment in U.S. Rubber Co., 19 April 1951,” pp. 9, 15, Hagley Museum and Library, Wilmington, Del.

23 On the financial aspects, see J. Penfield Seiberling memo to F. A. Seiberling, 18 March 1937, box 7, file 26, and J. Penfield Seiberling Memo of Verbal Report to the Board, 21 Dec. 1938, box 8, both J. Penfield Seiberling Papers, collection 824, Ohio Historical Society, Columbus, Ohio [hereafter JPS Papers].

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25 H. P. Schrank to J. Penfield Seiberling, 26 June 1956, box 33, file 7, JPS Papers.

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27 On the anti-chain-store campaigns, see Blackford, History of Small Business in America, 69–71, 88–95.

28 Akron Beacon Journal, 11 March 1956.

29 J. Penfield Seiberling to J. F. Seiberling, 13 Feb. 1943, box 13, Washington Office, JPS Papers.

30 H. P. Schrank to J. P. Seiberling, 15 Aug. 1947, box 20, JPS Papers.

31 Garland plant files, box 17, JPS Papers.

32 J. Penfield Seiberling to H. P. Schrank, 28 May 1952, box 28, H. P. Schrank file, JPS Papers.

33 H. P. Schrank to J. Penfield Seiberling, 15 Aug. 1947.

34 Box 37, file 19, JPS Papers.

35 Report to J. Penfield Seiberling, 19 May 1949, box 23, Coverdale and Colpitts file, box 23, JPS Papers.

36 H. P. Schrank to J. Penfield Seiberling, 26 June 1956, box 33, file 7, JPS Papers.

37 Transcript of Shorthand Notes, 24 Sept. 1958, box 35, file 34, JPS Papers.

38 Box 37, file 19, JPS Papers.

39 Report by H. P. Schrank, 24 Jan. 1960, box 36, file 28, JPS Papers.

40 Misc. 1960, box 36, file 28, JPS Papers.

41 Box 36, file 14, JPS Papers; the cost was based on production of 2,500 tires per day.

42 Report by H. P. Schrank, 24 Jan. 1960.

43 Tire Sales, 1948–58, box 36, file 3, JPS Papers.

44 Box 16, file 47, JPS Papers.

45 J. Penfield Seiberling to J. D. Winsor, 21 July 1949, box 23, Biddle, Whelan and Co. file, JPS Papers.

46 See J. Penfield Seiberling to A. C. Blinn, 24 Feb. 1949, box 23, JPS Papers.

47 Box 30, Standard Oil file, JPS Papers.

48 J. P. Seiberling to A. C. Blinn, 28 March 1955, box 32 A. C. Blinn file, JPS Papers.

49 Penfield Seiberling commented: “From a financial standpoint we are in the strongest position that we have been in our history, but, even so, we still find it necessary to borrow up to $4 million each year from commercial banks to finance our business throughout most of the year. In other words, we don't have enough capital ‘to be free of the commercial banks.’” J. Penfield Seiberling to Benjamin Cargill, 20 Feb. 1954, p. 6, box 32, file 22, JPS Papers.

50 Operating Committee, 1958, box 38, file 7, JPS Papers.

51 Seiberling Rubber, Annual Report, 1959.

52 Ibid., 1960.

53 J. Penfield Seiberling to R. C. O'Donnell, 25 Nov. 1960, p. 5, box 35, file 21, JPS Papers.

54 H. P. Schrank to J. Penfield Seiberling, April 1960, box 36, file 14, and box 36, file 21, both JPS Papers.

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57 J. Penfield Seiberling to R. C. O'Donnell, 25 Nov. 1960.

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59 For a summary of the expansion, see J. Penfield Seiberling to Benjamin Cargill, 20 Feb. 1954, p. 2, JPS Papers. On the later problems, see Transcript of Shorthand Notes, 24 Sept. 1958.

60 In 1952–53 Seiberling had rejected proposals for a Brazilian tire plant; see box 29, JPS Papers.

61 Box 22, E. H. Rollins file, JPS Papers.

62 Box 24, A. C. Blinn file, JPS Papers.

63 Box 29, box 30, JPS Papers.

64 Box 33, file 18, JPS Papers.

65 Box 36, file 20, JPS Papers.

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74 The Penfield Seiberling Papers contain correspondence and clippings relating to the conflict with Edward Lamb; see, for example, Press Release, “The Seiberling-Lamb Proxy Contest,” box 33, file 11.

75 Transcript of Shorthand Notes, 24 Sept. 1958.

76 Akron Beacon Journal, April 1960.

77 The critical tone is evident in Lamb's autobiography, No Lamb For Slaughter, 216.

78 J. Penfield Seiberling to F. D. Stewart, 10 May 1960.

79 Akron Beacon Journal, 16 May 1961.

80 J. Penfield Seiberling to R. C. Smith, 25 Aug. 1961, box 37, file 6, JPS Papers.

81 J. Penfield Seiberling to T. S. Pflueger, 20 March 1962, box 39, file 21, JPS Papers.

82 Penfield Seiberling's correspondence contains indications of dissatisfaction; see J. Penfield Seiberling to T. S. Pflueger, 20 March 1962.

83 The new management strategy is outlined in a Report on Seiberling Rubber, January 1963, especially pp. 11–23, in box 41, file 16, JPS Papers.

84 Seiberling Rubber, Annual Report, 1963, p. 3.

85 Dayco had been Dayton Rubber and was renamed after selling its tire division.

86 Report to Seilon AGM, May 1965, box 43, file 42, JPS Papers. For the view that bank pressures for debt repayment forced the sale, see J. Penfield Seiberling to Douglas Mueller, 20 Aug. 1965, box 43, file 21, JPS Papers, and Akron Beacon journal, 31 Jan. 1965.

87 Lee Tire and Rubber Company, Annual Report, 1960.