Dunlop Rubber was a British rubber manufacturing multinational. It was founded in 1889 by John Boyd Dunlop, who had discovered the pneumatic tyre. It was one of the first multinationals, and grew to be one of the largest British industrial companies. It failed to adapt to evolving market conditions in the 1970s, and after taking on excessive debt was acquired by the industrial conglomerate BTR plc in 1985. Since then, ownership of the Dunlop trade-names has been fragmented.
In 1888, John Boyd Dunlop, a Scottish veterinary surgeon living in Ireland discovered the pneumatic tyre principle. To exploit this discovery, the Pneumatic Tyre and Booth's Cycle Agency Co. Ltd was formed in 1889, with funding from Harvey Du Cros and others, and headquarters at Oriel House in Dublin. John Dunlop held a 20 percent stake in the company. It was a period of great demand for bicycles, and Willie Hume created publicity for the company by winning seven out of eight races with pneumatic tyres. Commercial production began in late 1890 in Belfast, and quickly expanded to fulfil consumer demand. However in 1890, the company lost its patent after it was discovered that Robert William Thomson had first patented the pneumatic tyre in 1845. John Dunlop resigned from the company in 1895, and sold most of his shares in the company.
In the early 1890s Dunlop Tyre established divisions in Europe and North America. The company established factories overseas, as foreign patents rights would only be maintained if the company was engaged in active manufacture where its tyres were sold. Dunlop partnered with local cycle firms such as Clement Cycles in France and Adler in Germany in order to lower the necessary capital expenditure. The American Dunlop Tyre Company was established in the USA in 1893, with a factory in Buffalo, New York. In 1893, British manufacture was relocated from Belfast and Dublin to Coventry, which was the centre of the British cycle industry, after the Dublin Corporation launched a case against the company due to the smell of rubber and naphtha.
In 1896 Harvey Du Cros sold the company to the financier Ernest Terah Hooley for £3 million. Almost immediately, Hooley refloated the company for £5 million as the Dunlop Pneumatic Tyre Company by drumming up support by offering financial journalists cheap shares and appointing aristocrats to the board.
Originally the company did not manufacture tyres, instead assembling components from other manufacturers at the Dunlop factory in Coventry. From the late 1890s however, the company began to acquire its own rubber mills.
From 1900, Dunlop began to diversify from cycle tyres. The company manufactured its first motor car tyre in 1900. In 1906, a car wheel manufacturing plant was built. In 1910 Dunlop developed its first aeroplane tyre and golf ball.
Between 1904 and 1909, the French Dunlop subsidiary lost a total of £200,000, as European rivals such as Michelin of France and Continental of Germany overtook it in the motor tyre market. In 1909, Dunlop of France, and in 1910, Dunlop of Germany were wholly acquired by the British parent in order to enforce stronger quality control.
Dunlop was refloated as a public company in 1912. In 1916, construction began on the Fort Dunlop site across 400 acres. For supply, Du Cros personally selected estates in Ceylon and Malaya for purchase by the company, which by 1917 owned about 60,000 acres of rubber plantations. By 1918, Dunlop was the fourteenth largest manufacturing company in Britain, and its only large scale tyre manufacturer.
Arthur Du Cros became personally close to the financier James White, and appointed him as Dunlop's financial advisor in 1913. By 1919, White had acquired control of the company. White speculated on the rubber futures market with disastrous results when the price of rubber collapsed. Meanwhile, there were also quality control problems with tyres. This came to a head in August 1921 when the company announced a loss of £8 million on the year's trading. The company was saved by the intervention of Frederick Szarvasy of the British Foreign and Colonial Corporation. White's board member nominees were removed, and Sir Eric Geddes was appointed as chairman.
Geddes era diversification
From 1924, Sir Eric Geddes began to diversify Dunlop. In 1924, the company began to manufacture tennis balls. In 1925, F A Davis was acquired, which had tennis racket manufacturing expertise. Dunlop opened acquisition discussions with Slazenger in 1927, but without success. In 1926 the company acquired Charles Macintosh of Manchester for £2.5 million, and the Dunlop name was applied to footwear and clothing. While in 1920, 90 percent of the company's turnover had been in motor tyres, by 1928 this had fallen to 72 percent.
An advertising campaign in 1928 heralded "the Dunlop way".
In 1930, Dunlop was the eighth largest public company in Britain by market value.
The inter-war years saw considerable international expansion for Dunlop. The German subsidiary was reacquired after the First World War, and by 1929, Dunlop of Germany operated the second largest tyre factory in the country. Dunlop built manufacturing facilities in Ireland, South Africa and India during the 1930s. In 1932 the Dunlop bridge was built over the Circuit De La Sarthe, home to the Le Mans 24 hour race.
By 1946, Dunlop had 70,000 employees, and sales outlets in nearly every country in the world. In 1948 Dunlop invented the self-sealing tyre, which reduced the risk from blowouts. In the early 1950s, Dunlop developed Maxaret, the first anti-lock braking system. By 1955 Dunlop had almost half of the UK tyre market. A report by the Monopolies and Restrictive Practices Commission in that year found that Dunlop and the four other main sellers in the UK market (Goodyear, Avon, Firestone and Michelin) companies had arrangements which resulted in fixed prices. These arrangements were forced to change, and Dunlop's market share decreased.
A further factor in Dunlop's decline was the decision during the early 1960s to develop cheaper textile radial tyres rather than the more durable steel-belted radial tyres. Dunlop lost market share to the Michelin company and other manufacturers marketing steel-belted tyres. The decline of the British car manufacturing industry during the 1960s also affected the core Dunlop business.
In 1967, the company changed its name from the Dunlop Rubber Company Ltd to Dunlop Ltd, to reflect the more diversified nature of the business. At this time, around 60 percent of sales came from overseas, and tyres represented 60 percent of company turnover.
In 1968 Dunlop acquired George Angus Ltd of Newcastle upon Tyne, a world leader in the supply of fire hoses and fire fighting equipment.
In the late 1960s, Dunlop was the 35th largest company in the world outside the United States. In 1968, Dunlop had operating profits of £31.8 million, with net profits of £11.2 million. In 1970, Dunlop had 102,000 employees.
Sir Reay Geddes, the son of Sir Eric Geddes, became chairman of Dunlop in 1968.
In 1971 Dunlop merged with Pirelli of Italy to form the world's third largest tyre company after Goodyear and Firestone. The merger was not a takeover by either company, but a joint venture arrangement where each company took minority interests in the other's subsidiaries. The merger was not successful, and the joint venture was dissolved in 1981. Pirelli was not profitable throughout the entire duration of the merger.
Takeover and breakup
As a result of increasing competition in the tyre industry, and the disastrous results of the Pirelli tie-up, Dunlop had amassed massive debts. Between 1978 and 1981 Dunlop spent $102 million on modernising its European tyre business. The British workforce was cut from 13,000 to 7,000. Angus and the company rubber plantations were sold. By July 1983, the Malaysian businessman Ghafar Baba had built a 26.1 percent stake in the company.
In September 1983, the European tyre business was sold to its former subsidiary, Sumitomo Rubber Industries Ltd of Japan, for £82 million. In 1984 the remaining tyre factories in New Zealand and India were sold for £200 million. In 1985 the company was acquired by BTR plc for £100 million. BTR immediately sold the US tyre business to its management for £142 million.
BTR began to divest itself of the Dunlop businesses from 1996 in order to transform itself from a conglomerate into a streamlined engineering company. In 1996 it sold Dunlop Slazenger to its management, backed by private equity group CINVen for £372 million, who in 2004 sold the business to Sports Direct International for £40 million.
In 1998 BTR sold BTR Aerospace Group, including Dunlop Aviation and Dunlop Precision Rubber, to Doughty Hanson & Co for £510 million to form Dunlop Standard. In 2004, Dunlop Standard was sold to Meggitt plc for £800 million. Meggitt has inherited the original English company, now named Dunlop Holdings Ltd, incorporated in 1896.
In 1998 BTR sold its share of the South African subsidiary, Dunlop Africa Ltd, which was itself divided in 2001. The industrial products division was sold to become Dunlop Industrial Products and Dunlop Rubber Mouldings. The tyre business, Dunlop Tyres International, was bought by Apollo Tyres of India in 2006. Apollo Tyres were never comfortable with, nor fully committed to the Dunlop Brand and sold most of the company (including all of the Dunlop Tyre trademark rights in Africa) to Sumitomo Rubber Industries in 2013. Dunlop Tyres International had owned the rights to various Dunlop brands in a number of countries outside South Africa, and these rights were sold to Sports Direct in 2006.
Dunlop Tyres since 1985
Sumitomo Rubber Industries sold tyres for road vehicles with the Dunlop brand from 1985 to 1999. In 1999 Sumitomo RI and Goodyear Tire and Rubber Company of the US formed a joint venture. Goodyear obtained the Dunlop tyre assets in Europe and the US, and Sumitomo RI continued to sell Dunlop tyres in other countries.
The Dunlop Tyres company in South Africa was acquired by the Indian company Apollo Tyres. In December 2013 Apollo Tyres sold most of its South African operations to Sumitomo RI for $60 million (Rs 333 crore) including the Ladysmith passenger car tyre plant. Apollo Tyres has retained its Durban plant, which manufactures truck & bus radial (TBR) tyres and off-highway tyres used in the mining and construction industries. Sumitomo RI also acquired ownership rights for the Dunlop brand in 32 African markets.
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