Lost in Transition – In May 1972, Goodrich executives had experienced enough losses in the footwear factory debacle and chose to exit the footwear industry entirely. They struck a lease-with-option-to-purchase deal with Converse Rubber Co.’s parent company, Eltra Corp. for the rubber-canvas footwear operations of the B.F. Goodrich Co.
The two companies agreed in principle that Converse was to lease for 12 years, with the option to purchase, the Goodrich plants in North Carolina, South Carolina, and Mayaguez, Puerto Rico. Goodrich agreed to assign or sell to Converse many of its Hood and Goodrich canvas footwear patents and trademarks, including “Jack Purcell,” “Posture Foundation,” and “P.F. Flyers”.
The Justice Department, however, concerned that Converse would have a monopoly on casual footwear, filed suit. They charged that the agreement would violate the Clayton Act by eliminating competition in the manufacture and sale of rubber-canvas shoes. Eltra Corp. did not have the resources for a lengthy and expensive antitrust battle, and looked for a quick settlement.
The judgment proposed by the government required Converse to sell by June 30, 1974, one or more of its canvas footwear production facilities producing at least seven million pairs annually to a buyer approved by the Justice Department.