CHARLOTTE-based diversified company, Carlisle, is exiting from the business as it faces plunging profit margins versus “price-aggressive” Chinese competitors.
The company, founded in 1917, has started selling inner tubes for automobiles and later on expanded into other manufacturing lines, from airplane wiring to restaurant plates.
Its second-quarter earnings showed that the company’s transportation products segment as “no longer a strategic asset.” The company said it was seeking a buyer for the segment, whose profit before interest and taxes is in the single digits compared with double digits in other Carlisle units.
The segment makes speciality tyres for all-terrain vehicles, boat and horse trailers.
Posting a growth earning of 476% after closing tyre factories in China and Pennsylvania, according to its 2012 annual report, the company’s transportation products segment has performed poorly since then.
Recently, the company announced that it had hired SunTrust Robinson Humphrey, part of Atlanta-based SunTrust Banks, to help it with a sale of the segment. No buyer has been named yet.
Reportedly, profit before interest and income taxes for the transportation products unit was 6.5 percent in the quarter, excluding a US$100 million impairment charge, which resulted in a loss of US$86.8 million before interest and income taxes.