Superior Rubber Company Ltd. Factory
Holyrood, Conception Bay
Date Last Modified: November 15, 2015
The Superior Rubber Company Factory has been called one of "the last iconic reminders of Joey Smallwood's attempts to industrialize Newfoundland" (VOCM). Smallwood's attempts to grow the provinces economy ended with an abandoned factory in Holyrood and one of the largest government scandals in the early history of the province.
The 60,000 square foot factory has been abandoned for many, many years and as of early winter 2015 the building seemed to have no deadline. But in March of the same year it was decided the building would be demolished to make way for new development.
Nevertheless the buildings history and the impacts it had on the Smallwood government will never be forgotten.
Superior Rubber Factory Summer 2014 - Photo from Google Maps
History - Joey Smallwoods Industrialization Program
In the early 1950's Premier Joey R. Smallwood began a program to support the industrialization of the province in order to produce jobs and keep people from moving out of province. Smallwood was scared that once Newfoundland joined confederation with Canada, people would take the new opportunity to move to the mainland to find work.
“We must develop or perish. We Must Develop or our people will go in the thousands to other parts of Canada. We must create new jobs… Develop, develop, develop – that’s my slogan and that will remain my slogan” – Joey Smallwood's speech in July of 1949
During the industrialization drive large amounts of roads were being built, new water and sewer systems were installed, and large amounts of money were being put into building a provincial wide power grid to supply power to communities across the province. All of this in hopes of attracting local and foreign business and investors into setting up plants and factories in the province.
Unable to find investors, Smallwood ordered his Director General of the Economic Development Department, Alfred Valdmanis to begin looking into investors and businesses in Germany (as many investors in the country were looking to expand internationally as the country began its reconstruction after WWII). As Director of Economic Development, Valdmanis' role was to travel abroad creating contacts and reach agreements with companies interested in establishing in Newfoundland. Many investors and companies were very interested in the offer and almost immediately began building plants and factories on the island through government loans.
In late 1953 Valdmanis became the chairman of Newfoundland and Labrador Corporation in Montreal. He did however continue to play an important role in the industrialization program on the island. Later replacing him as the Director General of the Economic Development was Gordon Pushie.
Confidence in a Rubber Products Factory
One of the factories to be built was a rubber products factory in the community of Holyrood. Aimed at the demand for rubber clothing in the fishing industry, Joey Smallwood had high confidence in the success of a rubber factory in the province. He estimated that such a plant would produce $2 million a year. In the spring of 1953 he told the house of assembly:
"...with the latest machinery, with lots of skilled management behind it...we see no reason, as a Government, why such a plant should not succeed..."
(Letto M., Douglas, 1995)
"Scale Model of Superior Rubber Co. Ltd., 1951"
-Sources: Heritage Newfoundland
The government was willing to loan money to companies for start off cost and Smallwood believed that it would be paid back quickly and income from such a factory would help the local and provincial economies.
Shortly after in the early months of 1954 a 60,000 square foot plant was built by Ludwig Grube owner of the Superior Rubber Co. Ltd. The factories main production when first constructed was rubber boots and rubber clothing. The factory was expected to employ 400 people, most of whom were women from surrounding communities. The plant cost $1 million to build, money which Superior Rubber had borrowed from the government. The building sits on just 6 acres of land in Holyrood. (Letto M., Douglas, 1995) The factory would be under the management of German citizen, Max Braun-Wogau.
From the time it first opened confidence in Superior Rubber's future success slowly started to drop when it began running into problems. Conflicts between Superior Rubber and the "Parker and Monroe Shoe Company" over the low quality and high price of rubber clothing being produced at the factory created bad publicity and was the start of the factories infamous reputation.
In the first year the factory was in production a number of government scandals and unfortunate events occurred. It began with Manager Max Braun-Wogau falling ill around the time the factory opened. He was confined in a Swiss hospital for the first several months of the factories production. This is believed to have led to poor management and a decrease in the factories production rates. Around the same time Superior Rubber Companies president, Ludwig Grube was detained in Germany after authorities found $80,000 whose origins could not be found. With concern that the money was stolen, he was placed in jail until an explanation could be found.
After hearing this, Braun-Wogau sent his wife, Trudi to St. John's on Febuary 7, 1954 in order to find his friend Valdmanis and get an affidavit stating that Grube was holding the money for a Canadian citizen and it was all just a misunderstanding. Smallwood refused the affidavit stating that he did not want the province tied up in German courts nor did he want to be seen having affiliation with illegal German capitol exports.
After refusing the affidavit, the government ordered an audit to be done on the Superior Rubber Company. They found that $200,000 had been transferred to a New York Bank account for unknown reasons and a large unexplained cash deposit to Braun-Wogau.
Not long after this Valdmanis resigned from his position as the Newfoundland and Labrador Corporation. Before resigning however he provided the affidavit to Braun-Wogau in order to get Ludwig out of jail and Braun-Wogau off the hook. Valdmanis also warned Smallwood that the entire incident called for an investigation to taken out on all German investors associated with Newfoundland.
This series of events was devastating to Smallwood's attempt to industrialize the province. Good news came when the government exposed who was behind the illegal transfer of the $200,000 into a New York bank account. On April 23, 1954 Smallwood announced Alfred Valdmanis had been arrested and charged with the extortion. He was skimming large amounts of money from German Investors and placing it into a bank account he had set up in New York.
"Evening Telegram on April 24, 1954"
-Taken From Heritage NL
After this Superior Rubber continued production but many more problems were to come. Pushie informed Smallwood that the production at the plant was unsatisfactory and only produced 60 pairs of rubber footwear a day which was far less than what had been expected. Furthermore, when Braun-Wogau finally returned to work, he told the government he would need an additional $400,000 on top of the already extravagant loan to continue operations. At this time he was blaming the poor quality of workers and shortages in funds for the factories low quality products.
Superior Rubber was in bad shape and was continually degrading. In order to add to its working capitol, they began diverting the $10,000 the government had loaned them to a railway connection with the CN Railway and they transferred over $30,000 intended for installations of new equipment to a capitol account which they claimed was more important. By continuing to put money in their pockets and not into the importing raw materials they were quickly digging themselves into a deeper hole.
Another problem with the factory came from the building itself. Both the German architect who built it and a Canadian employee working with the building resigned because of its poor construction and poor condition. The Canadian employee wrote:
“I am embittered over the appealing (sic) condition of the building itself, its equipment, the senseless waste and destruction of material, the hopelessness of a native ever getting a higher job with better pay although their performance is in most cases better than the performance of the so- called experts”
- Letter from Frank Pronold to Smallwood, February 20, 1955
Poor quality products continued to be produced at the plant with nearly 60% of the products bought there were being returned. It was blamed mainly on second hand equipment in poor condition. Much of the equipment was refurbished or had come from the Marshal Plan (an American initiative to give economic aid to Europe after WWII).
Late in the winter 1955 Max Braun-Wogau told Pushie the now $1.4 million government loan they had would soon be used up. This was the last straw for the Newfoundland government and led to Pushie to search for another company to take over the factory or better yet, buy the factory. After attempting to contact several other rubber specialized companies with no luck, he approached the London plastics and rubber manufacturer, P.P. Cow and Company Limited and asked them to study Superior Rubber and determine if it would be smart to continue supporting the company. In December 1955 they produced a 20 page report that showed:
“Superior, with $1.4 million in government loans, a $120,000 bank overdraft, and $72,850 owing in interest to the government” and "lack of commercial experience" of the general manager and emphatically recommended the Works Manager must "...go at the earliest possible moment."
- (Letto M., Douglas, 1995)
The End of the Factory and The End of Smallwood's Industry Program
By this time in 1955 the plant had run a deficit of $622,337 and was plagued with a reputation of being unreliable and producing poor quality products. So on February 16, 1956 the government closed the factory for good. Realizing his mistake for trusting Superior Rubber, Smallwood told the House of Assembly that the factory had...
"...been disastrously bad and has failed."
(Proceedings, March 28, 1956 taken from Letto, 1995)
Surperior Rubber was not the only plant in Smallwoods industrialization program to fail. Many factories and plants which were part of the problem were shut down by the early 1960's and the amount of money invested into the development of the program outweighed the amount made from it.
The building remained idle for a period of time after the factory was closed but was eventually bought by a local merchant and used as a warehouse.
The building remained standing in Holyrood for numerous years. However in March 2015 the decision was made to tear the building down and use the 6 acres for new development. Many described this building as the last iconic reminder of Joey Smallwood's attempts to industrialize Newfoundland. Even though Smallwoods attempt was unsuccessful, the buildings remains a symbol of this turbulent time in the provinces history.
The “New Industries” - Heritage Newfoundland Labrador
"Chocolate bars and rubber boots: the Smallwood industrialization plan" - A thesis by Douglas M. Letto
"Alfred Valdmanis and the Politics of Survival" - A novel by Gerhard P. Bassler