Business: The Why of Guayule

The U.S. last week took its biggest single step yet toward future self-sufficiency in rubber. The Department of Agriculture okayed a $25,000,000 project to plant 45,000 acres in the Southwest with guayule (wa-yu-ley), a tough, sagebrush-like plant containing 20-22% pure rubber.

Guayule rubber is not new; Intercontinental Rubber Co. has been producing and selling it for 35 years. A U.S. corporation, Intercontinental gets all of its guayule rubber from Mexico, where the shrub grows wild in high, semi-arid regions. Mexican peons yank the plants from the ground, tie them on the backs of plodding burros, send them off to one of Intercontinental’s three Mexican factories. There the rubber is extracted by running the plants through grinding and pebble mills. The final product (which is shipped to the U.S. in 100-lb. boxes) looks, feels and smells like tree rubber, but is softer, less wear-resistant.

Simple to produce, guayule rubber has never before got out of the pin-money class, mainly because it costs 12-15¢ a Ib. v. 5-10¢ for plantation rubber. It is too soft to replace tree rubber completely in the vast tire and inner-tube market, is chiefly used (especially by Goodrich) for impregnating the cotton strands in belting, shoes, raincoats, etc. Hence Intercontinental has never produced more than 5,000 tons a year (less than 1% of U.S. consumption); it has lost money in eight of the last twelve years; its 1940 profits were only $324,000, about 20 days’ earnings for a company like Goodrich.* Nevertheless all the Big Four rubber companies (Goodyear, Goodrich, U.S. and Firestone) have used guayule for years, know it can go into 80% of their products.

Combined with reclaimed rubber it can make tires 80-90% as good as regular tires, can be used extensively in the booming retreading industry (see p. 53). In a wartime economy, guayule rubber has an advantage over synthetic rubber because it requires no fancy factories, no vital chemicals. Also, its price is lower than synthetic now (but not likely to drop as fast as synthetic’s with increased output).

Because Intercontinental has most of the know-how, owns all of the known guayule seed (from a 15-year-old experimental station in Salinas, Calif.), Agriculture will work side by side with the company on the new project. Plantings should begin about March, probably in California, New Mexico, other western States. Since an acre of guayule yields about 2,000 lb.of rubber, the new 45,000-acre scheme can produce a total of 40,000 long tons of rubber. Biggest hitch: guayule takes four years to reach maximum yield and each new crop means complete replanting.

* Intercontinental’s first big customer around 1910 (when tree rubber was $2.07 a lb.) was Diamond Rubber Co., later bought by Goodrich.