Effort to Recycle Discarded Tires Losing Traction in State

Only a year ago, the mood at the Cabazon Band of Mission Indians’ tire-recycling plant was upbeat.

The state-of-the-art plant 30 miles southeast of Palm Springs symbolized the tribe’s respect for the environment by pulverizing millions of scrap tires into crumbs used in asphalt, playground surfaces and floor mats. In the process, it diverted a million tires a year from California landfills.

Not anymore. Tribal leaders say their First Nation Recovery Inc. -- the only tire-recycling facility in the nation owned and operated by Native Americans -- may have to shut down.

A glut of so-called crumb rubber on the market, combined with competition from heavily subsidized Canadian producers, has driven market prices for crumb rubber down to 10 cents a pound; the tribe says it needs 15 cents to make a profit. Then there are energy costs, which have nearly tripled over the last year, and anticipated markets that never developed.

For example, sales of rubberized asphalt -- the major market for crumb rubber -- have fallen because budget concerns have reduced demand from potential major customers, such as the California Department of Transportation.

The Cabazon band owns a casino in Indio, and the tire-recycling plant represents an attempt by the tribe to diversify its interests.

Striding through a maze of 30,000 used tires in the tribe’s 640-acre “eco-industrial park,” the plant’s general manager, Joe Tomcho, glumly acknowledged, “The future doesn’t look bright.”

The Cabazon facility is one of several California tire recyclers fighting for survival.

Michael Blumenthal, senior technical director of the Rubber Manufacturers Assn., summed up the situation this way: “Too much ground rubber in the marketplace has triggered a vicious downward spiral in the industry.”

“Only two types of businesses will survive in California,” Blumenthal said. “Those who take the raw material and make a finished product, such as traffic-control devices or floor mats, and those who have the next wave of contracts for rubberized asphalt.”

Three months ago, Atlos Rubber Co. in downtown Los Angeles folded after 74 years in operation. Executives at CRM Co. in Compton and Bay Area Tire Recycling in San Leandro say their businesses have been hit hard as well.

Meanwhile, the number of discarded tires sent to landfills and dumped illegally across the state far exceeds the number diverted for recycling.

California producers would be doing better were it not for competition from subsidized Canadian firms, said CRM Chief Executive Barry Takallou.

“The Canadians get subsidized up to 60% of the product’s value, and buyers are enjoying the benefits of that,” he said. “But for producers like me, it’s hard not to get emotional, because we’re talking about California’s economy and environment.”

Only a year ago, the decade-old industry was enjoying record profits.

Crumb rubber producers still talk about the massive Firestone tire recall of 2000, which flooded recyclers with millions of flawed tires to be ground up and then sold by the pound, like coffee.

The 33-member Cabazon Band was among the biggest recipients of the sudden rush of Firestone tires. First Nation was paid $20 a ton to take those tires, and profited further by selling the recycled rubber.

These days, the problem is finding enough customers to meet overhead costs and keep the 4-year-old plant running.

Discarded tires arrive by the truckload at the tribe’s recycling warehouse, where they are tossed onto a conveyor belt, which feeds them into a shredding machine that spits out chunks of rubber. By day’s end, those chunks, with fragments of steel removed by magnets, have been reduced to fine, clean crumbs to be shipped to manufacturers of various rubber products.

“The Cabazon plant is a showcase of crumb rubber facilities in the Western United States,” said Larry Morris, an industry consultant. “It was bought brand new and housed in a 30,000-square-foot building. In an otherwise dirty business, it’s so clean, you can almost eat off the floor.”

But Patrick Schoonover, the tribe’s director of legal affairs, said, “We’re extremely concerned about our ability to continue operating.

“Under the current price scenario,it’s impossible to maintain a profit,” he said.

Six months ago, the tribe entertained a purchase offer from Recovery Technologies Group of Los Angeles, which originated in Canada and is one of the few local producers trying to expand operations. In recent weeks, the tribe has also been exploring potential markets in Mexico and China.

“I keep hoping we can find a customer in some specialty market,” Tomcho said as he locked up the plant on a recent weekday. “Otherwise, all these tires will be headed for a landfill.”