Goodrich's Cake

A group of executives headed by President & General Manager Arthur B. Newhall of the $24,000,000 Hood Rubber Co. last week bought control of their concern from the parent B. F. Goodrich Co. Producer chiefly of rubber footwear, Hood was acquired by Goodrich in 1929 and all Goodrich footwear activities were concentrated in the Hood plant in Watertown, Mass. No sooner had Goodrich made the purchase than rubber footwear sales began to fall. The mild weather last winter dropped sales for the industry to less than one-half of pre-Depression volume. Officials offered no explanation of the Hood sale, but Wall Street thought that, without harm to anyone, Goodrich had smartly eliminated Hood's losses from its consolidated statements.

The deal enables Goodrich to have its cake and eat it, too. Voting control goes to the buying executives through ownership of 3,300 of the 6,000 shares of common outstanding. The rest of the common goes to Goodrich along with 120,000 shares of preferred stock. Since this preferred stock is convertible share for share into common after Jan. 1, 1937, Goodrich can eventually regain control. If no dividends are paid, the preferred receives voting rights on the same date, control reverting to Goodrich. Though Hood officials say the amount is a secret, something was paid Goodrich for the small block of common. In addition to its continuing financial interest, Goodrich will distribute Hood products through its selling organization.

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