Former GM chairman takes rubber company post

January 09, 1991|By Knight-Ridder

AKRON, Ohio -- His pension could be more than the year-long profits at the 150-employee Midwest Rubber Custom Mixing Corp.

Still, the father of the Saturn car, General Motors' retired chief, Roger Smith, has been tagged by the low-key, well-heeled New York investment firm AEA Investors Inc. as the chairman of Barberton, Ohio's Midwest Rubber and five other rubber-plastics companies in Ohio, Virginia and Georgia.

Smith, 65, retired from General Motors, the world's largest car company, last summer. Before retiring, GM's board of directors doubled Smith's annual pension from $600,000 to about $1.2 million. The move was assailed by unions and GM critics, who questioned whether the raise was deserved because of GM's lost share of the U.S. car market during Smith's tenure as chairman in the 1980s.

L An executive from AEA Investors did not return a phone call.

However, an executive from one of the acquired companies, Rubatex Corp. in Bedford, Va., confirmed that Smith would be chairman of the holding company, RBX-Investors Inc., that controls the acquired companies.

Harry Schickling, vice president of Rubatex, said the holding company's board would include existing managers from the acquired companies.

AEA consists of retired executive-investors from Fortune 100 companies and has a portfolio of mostly smaller U.S. industrial companies valued at $2 billion. That figure includes bank loans and debt. The New York firm bought the rubber-plastics rubber companies from Koffman Associates, another New York investment company.

The terms of the deal were not disclosed.

The six acquired companies will have annual sales of about $175 million, a press release said. Certain managers from the acquired companies were part of the deal, the release said. The rubber or plastic could be used in tire, insulation, transportation, construction, defense or pharmaceutical industries.

Gerald Weigand, vice president of Midwest Rubber Custom Mixing, said: "I am part of the management group, but I was not part of the buyout." He viewed the acquisition by AEA as positive. He said he was not aware that GM's Smith would be chairman of the holding company.

There has not been a major expansion at the plant, which has produced synthetic rubber since 1982, when a third Banbury mixer was installed, Weigand said.

United Rubber Workers Local 77 represents workers at the plant.

Weigand said: "We had a good 1990, but I don't know what's going to happen if there's a fighting war (in the Mideast)." He declined to disclose the sales and profit figures.

In Akron, AEA Investors owns Akron-based Barmet Aluminum Corp., one of the nation's largest independent recyclers and manufacturers of aluminum. Former Goodyear Chairman Charles Pilliod Jr. is chairman of the holding company that runs Barmet and two related aluminum-products companies in other states.

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