Dunlop Rubber was one of the leading rubber manufacturers in the world. Its presence at Fort Dunlop in Birmingham ended after almost 100 years in 2014.
Establishment and growth of the business
John Boyd Dunlop (1840 – 1921) was a Scotsman who developed the pneumatic tyre. Harvey du Cros (1846 – 1918) established a company in Dublin to manufacture bicycle tyres based on Dunlop’s discovery in 1889. Dunlop himself was sceptical of the commercial potential of the product, and took a relatively modest 20 percent stake in the venture.
The Dunlop tyre was tested by the greatest cyclist of the era, Willie Hume (1862 – 1941), who won seven races out of eight in a trial of the new product.
Manufacture was relocated from Dublin and Belfast to Coventry, the heart of the British cycle industry, from 1893. The business grew rapidly.
Dunlop becomes a public company
John Boyd Dunlop divested his shareholding in 1895, and the company was sold to the financier Ernest Terah Hooley (1859 – 1947) for £3 million in 1896. Within a matter of months, by bringing on aristocratic directors and garnering press attention, Hooley was able to publicly float the company for £5 million.
Additional factories were established in the United States, France and Japan.
Dunlop produced its first tyre for a motor car in 1906. The first rubber estates in Malaysia were acquired, in order to ensure a supply of raw material, in 1910.
Dunlop employed 30,000 people by 1916. That year construction began on the 400-acre Fort Dunlop headquarters and production site at Birmingham.
Dunlop was the fourteenth-largest manufacturing company in Britain by 1918, and its only large-scale tyre manufacturer. It had a market value of £8.9 million in 1919.
Dunlop began to diversify from tyres from 1924. It entered the sports market in earnest when it acquired the tennis racket manufacturer F A Davis. Charles Macintosh, the raincoat manufacturer, was acquired in 1926.
The Malaysian estates were expanded over time, and Dunlop was the largest single landowner in the British Empire by 1926.
Dunlop remained the largest tyre manufacturer in the world. Dunlop was the eighth-largest public company in Britain by 1930, with a market value of £28.2 million.
All of the 61 official world records for car speed had used Dunlop tyres by 1933.
Dunlop was a major industrial supplier for Britain during the Second World War, producing the bulk of rubber tyres and boots for the war effort.
Dunlop had 70,000 employees, and sales outlets in nearly every country in the world by 1946. Dunlop was the tenth-largest British company by 1948, with a market value of £55.9 million.
The fortunes of Dunlop were closely interlinked with the British car industry. Britain was the second-largest car manufacturer in 1950, and the largest exporter of cars in the world. Many of these cars were fitted with Dunlop tyres. Dunlop accounted for almost half of all tyre sales by value in Britain in 1950.
Dunlop employed 100,000 people by 1955, and was the second-largest private employer in Britain after ICI. Dunlop was the twelfth-largest company in the world outside the United States in 1959.
Slazenger, the sporting goods business, was acquired in 1959.
Dunlop enters into decline
Dunlop was slow to adapt to the new market for steel-belted radial tyres, and had begun to decline by the early 1960s. Performance was also undermined by the decline of the British car industry.
A lengthy strike at Fort Dunlop resulted in a loss of £3 million at the group’s British operations in 1970: the first in its history. As a result, the largest British car manufacturer, British Leyland, which had previously acquired all of its tyres from Dunlop, adopted a policy of dual-sourcing in order to ensure supply.
Dunlop was the 35th-largest company outside of the United States in the late 1960s. Dunlop was the eleventh-largest British industrial company in 1973, with a turnover of £495 million and capital of £290 million.
Merger with Pirelli and break-up of the business
Dunlop merged with Pirelli of Italy to form the third-largest tyre manufacturer in the world, after Goodyear and Firestone, in 1971. The combined group had a turnover of almost £900 million.
The merger was to prove a disaster: the Pirelli branch lost money every year until 1980. The merger was undone in 1981, but it was too late: Dunlop had amassed massive debts and was almost bankrupt. Dunlop reduced its workforce by over 19,000 between 1978 and 1982.
Dunlop’s tyre manufacturing operations ran at an increasing loss by 1978. Of eight European sites, only the Washington plant near Newcastle upon Tyne remained profitable by the late 1970s. The tyre operations lost £22 million in 1980.
Dunlop sold its 51 percent stake in its Malaysian rubber estates to Multi-Purpose Holdings, a Chinese-Malaysian group, for £60 million in 1981. The Dunlop estates represented the sixth-largest plantation group in Malaysia, covering over 55,000 acres.
Dunlop’s loss-making European tyre business was sold to Sumitomo, its former Japanese subsidiary, for £82 million in 1983.
The Dunlop workforce was reduced by half between 1970 and 1983, from 107,000 to 53,000 people.
The remnant of Dunlop was acquired by BTR, an industrial conglomerate, for £101 million in 1985.
BTR sold the United States tyre business to its management for £142 million.
Dunlop was the fourth-largest tyre brand in 1988, with sales of $3.45 billion.
BTR sold the remaining Dunlop businesses to various interests around the world in 1996. The sporting arm, Dunlop Slazenger, was sold to Cinven, a private equity firm, for £372 million. Dunlop Standard, the aerospace group, was sold to private equity firm Doughty Hanson for £510 million.
The bulk of Sumitomo’s sales came from the Dunlop brand in 1999. Dunlop was the largest tyre supplier to Toyota and Mercedes-Benz, and one of the principal suppliers to Honda and Nissan.