Firestone Natural Rubber Company
| Subsidiary | |
| Industry | Rubber |
| Headquarters | Indianapolis, Indiana, U.S. |
|
Key people
|
Dan Adonis (CEO) |
| Owner | Firestone Tire and Rubber Company |
| Website | Firestonenaturalrubber.com |
Firestone Natural Rubber Company, LLC is a subsidiary of the Firestone Tire and Rubber Company. Headquartered in Indianapolis, the company operates the largest contiguous rubber plantation in the world in Liberia, which first opened in 1926.
During the 1920s, the United States access to rubber was restricted by the European colonial powers (Britain and the Netherlands), which held a monopoly in rubber production.Herbert Hoover, then Secretary of Commerce, considered rubber a vital resource due to its usage for car tires and began working with American rubber companies in order to find a rubber source that was controlled by US interests. Part of a Department of Commerce-subsidised worldwide search for a place for rubber plantations, rubber magnate Harvey Samuel Firestone sent experts to Liberia in December 1923 to do a soil survey.
In 1926, the Liberian government granted Firestone a 99-year lease for a million acres (to be chosen by the company wherever in Liberia) at a price of 6 cents per acre, Firestone thus created the world's largest rubber plantation. Firestone also provided a $5 million loan at a 7% interest rate to the government to pay the foreign debts it had and to build a harbour needed by Firestone. The loan was given in exchange for complete authority over the government's revenues until the loan was paid.
The loan took a larger and larger portion of the Liberian government's incomes: it grew from 20% of the total revenue of Liberia in 1929, to 32% in 1930, to 54.9% in 1931 and nearly the whole revenue in 1932. An estimation made by a member of the American Legation in Liberia said that Liberia really paid a 17% interest rate for the loan.
During the Great Depression, as rubber price fell, Firestone stopped its development of the plantation (using just 50,000 acres and cutting wages in half), and, depriving the Liberian government of tax incomes, the government missed a payment to the loans to the company. Firestone asked the US government to send a warship to Monrovia to enforce the debt payment, but President Franklin Delano Roosevelt rejected the "gunboat diplomacy". The loans to the company were finally paid in 1952.
As rubber demand went down during the 1980s, Firestone dismissed a number of 5000 workers, leading to the local antipathy to the company. On June 6, 1990, during the First Liberian Civil War, the resistance group National Patriotic Front of Liberia took over the Firestone plantation and evacuated US personnel. The exact nature of Firestone's activities in the plantation between 1990 and 1997 is unclear, the government's official stance was that they were able to take it back within a few months, while media reports say that it was not operational until late 1994.
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Wikipedia