Foam Factory’s Demise to Cause Ripple Effect

For the surfboard industry, the closure of Gordon “Grubby” Clark’s foam factory looms as a wipeout.

The 72-year-old Clark said his business withered under federal and state regulation, adding that he faced stiff punishment if he continued churning out the foam blanks that he has sold to surfboard shapers around the country.

“I may be looking at very large fines, civil lawsuits and even time in prison,” Clark told his clients in a letter sent Monday, announcing that he would shutter his Laguna Niguel factory after 44 years in business.

Clark, with surfboard pioneer Hobie Alter, invented the process in the 1950s that led to mass production of surfboards.

His company makes the polyurethane foam blanks, which are in rough surfboard shapes, for about two-thirds of the surfboards made in the United States, according to the Surf Industry Manufacturers Assn. in San Clemente.

Environmental regulators denied targeting Clark Foam, but news of his factory’s closure reverberated around the globe. Up and down the California coast and in Australia and other surf havens, artisan shapers and surf shops worried that hundreds of businesses would suffer.

“Virtually all the small shapers in America use him almost exclusively,” said Dick Baker, the association’s president, who is chief executive of Irvine-based surf wear maker Ocean Pacific Apparel Corp. “You could clearly have people shutting down their businesses as we speak until they can figure out how to deal with the supply issue.”

Hank Byzak, owner of Pure Fun Longboards, a surfboard producer in Encinitas, Calif., said Clark Foam’s sudden shutdown was “like an earthquake happened and we’re all victims.”

“If we have no raw materials to work with, none of us have a job anymore,” he said.

Clark did not return calls seeking comment. But in his letter he portrayed himself as a businessman being run out of town by state, federal and county regulators. He claimed that the Orange County Fire Authority took a “very tough line and added extra regulation that could be focused on closing Clark Foam.”

And Clark said his company was beset by allegations of unsafe practices.

“We have three ex-employees on full workman’s compensation disability -- evidently for life,” he said. “There is another claim being made by the widow of an employee who died from cancer.”

According to the claim, Clark said, chemicals at Clark Foam caused the cancer. “A few years ago we had one of those horror stories one hears about lawyers,” his letter stated. “Almost $400,000.00 in lawyers fees and the ex-employee suing Clark Foam got $17,000.00 The judge in the lawsuit advised me, ‘This is just a cost of doing business (in California).’ ”

Federal records show that the foam factory has been cited by the Environmental Protection Agency for improperly storing a hazardous chemical.

A 10-page notice of violation issued in 2004 alleged that the factory mishandled toluene diisocyanate, or TDI, a liquid chemical commonly used to make soft flexible foams for padding or insulation.

A known carcinogen, TDI can cause asthma and other lung problems when breathed in, even at low exposure levels, according to the state Department of Health Services.

The citation required Clark to develop emergency response plans to protect his 100 employees and his neighbors from potential chemical spills. Although Clark could have been fined as much as $27,500 a day, he corrected violations by the May 2004 deadline as required, EPA officials said.

“He complied and we never fined him a thing,” EPA spokesman Mark Merchant said, adding, “We would not have sent him to jail.”

Orange County fire officials, who have cited Clark for minor violations, said they didn’t believe that their actions resulted in his factory’s closure. Clark complied with the recommendations, said Capt. Stephen Miller of the Orange County Fire Authority.

“On the surface, my guess is that it’s a business decision [to close] and he’s trying to go out on a soapbox,” Miller said.

Clark is a formidable figure in surfing history. In 1959, surfboard maker Hobie Alter and Clark poured hot resin over a hunk of plastic. When it didn’t melt, the two became the creators of the first process to mass-produce surfboards.

That remains the single biggest innovation in the history of surfboards, which before that had been carved out of balsa wood. The technique helped spark the rise of the modern surfing culture.

There are now about 2 million surfers worldwide, according to the surf industry association. Surfers who ride the waves daily replace their boards as often as every month.

Surfboards, which typically sell for $350 to $900, racked up $200 million in retail sales in 2003, according to the industry association. About 75% of all boards are made in the U.S., the vast majority of polyurethane foam.

The price of surfboards could climb if Clark’s factory remained closed, some in the industry said. Some predict that many surfboards will soon be selling for double -- or triple -- what they sold for last week.

“Our own boards ... have gone up in price already,” said Byzak, who said he told surfboard dealers Tuesday to hold off selling his products until he studied market conditions. “It’s the law of supply and demand.”

Drew Milton, 22, a surfer at the Huntington Beach pier, said he expected the price of surfboards to soar.

“I’ll probably just really take good care of the one I got now,” he said, nodding to the 2-year-old longboard under his arm.

Surfboard dealers said the closure of Clark’s factory could result in more imported surfboards, which many in the industry have resisted. It could also mean more business for Surftech, a Santa Cruz company that cranks out thousands of boards every year at a factory in Thailand.

“It’s going to really make the whole industry change its thinking, something that wouldn’t have happened for a long time if Clark was still staying in business,” said Bill Bahne, a board member of the surf industry association.