Friday, Dec. 26, 1969

Quiet Purge at Goodrich

Around the Portage Country Club in Akron, Ohio, conversation these days is anxious, subdued, and addressed to one topic: dismissals of executives and white-collar workers at B. F. Goodrich Co. Since September, the fourth largest U.S. tiremaker has quietly retired or fired several hundred employees, including one vice president and many middle-aged people who have spent the bulk of their working lives with the company. The dismissals have often been abrupt, impersonal and accompanied by a minimum in severance pay.

The purge is a result of last spring's attempted takeover of Goodrich by Ben Heineman's Chicago-based Northwest Industries. Goodrich waged a successful defense [TIME, May 23] that has become a classic in corporate tactics. But Northwest emerged as the largest single stockholder, with 16% of Goodrich's shares. That was a sufficient threat to spur Goodrich's chairman, Ward Keener, to make good on his promise in the heat of the takeover battle to "improve profit margins" in 1970.

Goodrich's profits have lagged behind those of its prime competitors. Last year the company earned only 3.9% on sales of $1.1 billion, compared with 6% for the industry's most profitable major operator, Firestone. After Northwest's takeover attempt, Keener, who was paid $240,000 last year, allotted each of the divisions a profit target and rigorously trimmed back on money-losing operations. Last week, six days before Christmas, Goodrich closed down a rubber footwear plant in Watertown, Mass--and with it went the jobs of 950 employees. In that case, the closing had been announced in July. "Let's be frank," says John N. Hart, Goodrich vice president and controller. "If we can't improve our performance, we don't deserve to survive, either as a company or as its managers."

That Uncertain Feeling. One way that Goodrich management found to improve performance was to thin out the 18,000 executive, professional and other white-collar personnel by attrition, early retirement and outright firings in Akron. Robert Sausaman, 48, an equipment buyer, recalls that, after 17 years with the company, he was given two weeks' notice and "my bare entitlement" by way of a pension. Robert L. Coon, 56, a staff photographer for 25 years, was given the option of $10,000 in severance pay or a $100-a-month pension. He picked the pension. One executive was offered a promotion and a raise at Goodrich, then fired three weeks later. He chose a cash settlement of $23,000 instead of a $135-a-month pension. Most of the dismissed employees have found other jobs.

Goodrich made no announcement of the firings and Akron's Beacon Journal neglected to report the biggest potential story in town. The company secrecy was deliberate policy, and so was the uncertainty created among those who stayed. "I hope some of them will look into their performance and realize they could do better," says J. Wade Miller, vice president for personnel and organization. But there could be less favorable results for Goodrich, and not only in the loss of local good will in a community that backed the company in its struggle with Northwest. One group of white-collar workers, seeking job security, has asked to join the United Rubber Workers, which already represents 12,500 Goodrich factory hands. The union is now considering a full-scale organizing drive among Goodrich's office employees.

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