Goodyear and Sumitomo form global alliance.

Goodyear Tire & Rubber, Akron, OH, and Sumitomo Rubber Industries, Ltd. (SRI), Kobe, Japan, announced a far-reaching global alliance between the two companies. Goodyear and SRI, which has rights to the Dunlop brand in major world markets, will form four joint venture operating companies, one in North America, one in Europe and two in Japan, and two synergy-focused support ventures based in the U.S., one for global purchasing and one for sharing tire technology. A memorandum of understanding, signed by Sam Gibara, chairman, CEO and president of Goodyear, and Naoto Saito, president of SRI, creates an opportunity to integrate two global tire manufacturers, providing synergies and efficiencies to produce and more widely distribute a broader variety of higher quality tires at lower cost for consumers, according to the companies. The agreement is subject to due diligence and approval by each company's board of directors.

According to Gibara, this transaction is immediately accretive to Goodyear as earnings per share. In addition, cost improvement and rationalization will add a combined estimated $300-$360 million to the operating profits of the joint ventures during the next three years, according to Gibara. The operating joint ventures in North America and Europe will be owned 75% by Goodyear and 25% by SRI. In Japan, SRI will own 75% of two joint ventures and Goodyear will own 25%. Voting rights will be shared 70:30. The difference between the value of the respective businesses being consolidated and the agreed upon shareholding ratios will be settled through a balancing cash payment of $936 million to be paid by Goodyear to SRI at the date the joint venture goes into effect. Goodyear plans to acquire a 10% interest in SRI and SRI plans to acquire an equivalent dollar value of Goodyear shares. In addition, the operating joint ventures will be supported by two service joint ventures. The first, involving technology sharing, will be 51% owned by Goodyear and 49% by SRI. The second, for global purchasing, will be 80% Goodyear-owned and 20% owned by SRI.

The North American joint venture will include SRI's tire operations in North America with annual sales of $800 million. Goodyear's North American tire group, including Kelly-Springfield and Canada, will operate outside the joint venture. The European business venture will include the tire businesses owned by both companies in Western Europe. The 1998 estimated combined sales for the European company would total $4 billion. Goodyear's operations in Poland, Slovenia, Turkey, Morocco and South Africa will remain outside the alliance, as well as the company's European Chemical Division in France and its mold, wire and fabric facilities in Luxembourg. Similarly, SRI's non-tire European activities, such as the manufacture and sale of beds, car seats, precision rubber and wheels, will remain outside the alliance. For Goodyear, access to the Dunlop tire in the replacement markets in the U.S., Canada, Mexico and Europe offers significant sales opportunities.

In Japan, two joint ventures will be formed. The first venture will supply both brands of tires to original equipment manufacturers. The second venture will supply Goodyear brand tires to the replacement market through SRI's and Goodyear's distribution channels. SRI's replacement tire business in Japan remains outside the joint venture, as well as SRI's non-tire divisions, including sporting goods division and industrial rubber products division.

Goodyear's tire and non-tire operations in Asia and Latin America will continue to operate independently from the joint ventures, as will SRI's tire and non-fire operations in Asia. Definitive joint venture agreements are expected to be signed in May and will be subject to approval by various government regulatory agencies, including in the U.S. and European Union. The joint ventures are expected to be operational by September 1. As a result of this transaction, Goodyear's consolidated annual sales are expected to increase by $2.5 billion, or 20%.

Columbian Chemicals, Marietta, GA, will assume management and operating responsibility of one of the leading carbon black manufacturers in South Korea. Columbian, a wholly-owned subsidiary of Phoenix, AZ-based Phelps Dodge, which acquired an 85% interest in the carbon black manufacturing business of Korea Kumho Petrochemical Co., Ltd., will manage and operate the 110,000 metric-tons-per-year manufacturing plant located in Yeosu, South Korea. Columbian and Kumho will form a joint venture, Columbian Chemicals Korea (CCK) to produce rubber and industrial carbon blacks for customers throughout the Asian region. Kumho will retain a 15% interest in CCK. The acquisition is valued at $73.1 million.

Clariant, Easton, MD, a global specialty chemicals company, has signed an agreement to form a joint venture with Sang Ho Mercantile Co., Ltd., a South Korean plastics compounder headquartered in Yangsan; Kyongnam Province, South Korea. Clariant will hold a 55% equity position in this venture, also to be called Sang Ho Mercantile Co., Ltd. The creation of this joint venture will establish a strong market presence for masterbatches and engineered compounds in South Korea and Japan, which are the number two and one plastics markets, respectively, in Asia, according to the companies. Financial terms of the agreement have not been released.

Raytheon Engineers & Constructors, Cambridge, MA, and Shell Technology Ventures, Houston, TX, announced an advancement in the process technology for the production of styrene. The advancement, which is the culmination of a two-year collaborative effort between Raytheon and STV, couples a heating technology, originally developed by Shell for enhanced oil recovery, with the Fina/Badger styrene process licensed by Raytheon. Under an agreement signed by the two parties, STV will be the exclusive supplier of the proprietary heating equipment and RE&C will be the exclusive licensor of the overall process technology.

American Rubber Technologies, Jacksonville, FL, the patent holder for Rebound soil amendment, signed two distributors. California's Atlos Rubber and Quest Sales & Marketing Solutions of Muncie, IN, have been selected to include Rebound in their product mixes and join the Rebound Network Organization.

AlliedSignal announced that the consolidated Asian fibers company formed last October as a joint venture between AlliedSignal and three Korea-based companies, Sam Yang Corp., Kohap Ltd. and S.K. Chemical Ltd., has initiated operations as AlliedSignal-Sysko, Ltd. AlliedSignal has a majority ownership in the new company with Sam Yang Corp. having the majority interest among the three Korean members. AlliedSignal-Sysko produces a range of value-added, high tenacity performance fibers for the South East Asian market.

Littlern, Barberton, OH, has appointed D.A. Paulin Co. as its representative servicing accounts in the territory including Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New Jersey, eastern New York and eastern Pennsylvania. Littlern produces Dynamide urea powders, Dynacarb sodium bicarbonate powders, Rezino resin based curative blends, Santak process aids, preweighed packages of single and multiple ingredient curatives and additives, as well as grinding, blending and custom packaging of materials for rubber compounds.

After meeting or exceeding stringent Ford guidelines in service, quality, delivery and technical support, Freudenberg-NOK, Plymouth, MI, has received Full Service Supplier recognition from Ford Motor for its vibration dampers, engine seals and gaskets, and transmission seals and gaskets.

German automaker BMW has become the third auto manufacturer worldwide to approve Goodyear Tire & Rubber's Eagle NCT5 EMT run-flat tires as original equipment on the BMW 540i Protection to be introduced later this year.

Pilot Chemical, Red Bank, NJ, announced a partnership with Ideas Inc. to distribute lubricant additives. Ideas will stock and distribute Pilot's Aristonate line of sulfonates for industrial lubricants throughout the U.S.

Shimadzu Scientific Instruments, Columbia, MD, and Bristol-Myers Squibb have completed a strategic licensing agreement allowing Shimadzu to market Bristol-Myers Squibb's customized hardware and proprietary software for performing liquid chromatography.

Federal-Mogul, Southfield, MI, has been awarded its first total engine sealing package. The engine being developed by Daimler-Chrysler is scheduled to launch in model year 2003. The estimated contract value is approximately $30 million annually.

Quality registrations

California Gasket and Rubber, Gardena, CA, announced that its statistical control system has been certified by Lockheed Martin Aeronautics Material Management Center.

Detroit Testing Laboratory, Warren, MI, has received its Calibration Laboratory ISO 9002 registration.

Farrel. Ansonia, CT, announced that its ISO 9001: 1994 registration certification from Underwriters Laboratories has been expanded to include the company's New England repair facility.

The Engineered Cellular and Rubber Products Division of Thomson-Gordon Limited, a member of the Thomson-Gordon Group, Burlington, Ontario, Canada, now operates under the quality system requirements of QS-9000.