News that Central Oregon’s third-largest employer, Les Schwab Tire Centers, is putting itself up for sale has some in the Prineville community concerned.
For more than 50 years, the tire company has created a culture of giving back to the community with donations and support, said Steve Forrester, Prineville city manager. It’s that giving culture that has funded Little League, city parks and rodeos.
“Les Schwab started his business in Prineville, and his contribution is foundational for this community,” Forrester said. “He had a philosophy of investing in his people to ensure that they earned a good livelihood. That’s unparalleled.”
Over the years, countless Prineville residents cut their teeth and funded college education with summer jobs at the Central Oregon company, Forrester said. About 20% of Les Schwab’s tires are delivered to it through the municipal City of Prineville Railway.
Tires are brought into the company’s distribution centers in Prineville by trucks, ships and train, where they are then hauled by truck to its stores throughout the Northwest and California. In 2008, the company moved its headquarters from Prineville to Juniper Ridge in Bend .
On Tuesday, the company’s board of directors and shareholders, who are relatives of founder Les Schwab, announced they are seeking new owners for the company. In 2018, the company reported $1.8 billion in revenue. The tire chain operates 492 locations and has 7,000 employees spread out in 10 states, including Washington, Oregon and California.
The tire company said the decision to sell was not made lightly. It also said that no new statements would be made until after the New Year.
To help with the sale, it hired Goldman Sachs, which declined to comment, said Nicole Sharp, a Goldman Sachs spokeswoman.
Bloomberg News estimates the company could sell for $3 billion. Founder Les Schwab started the company with $11,000 in 1952, when the Bend native purchased OK Rubber Welders in Prineville and changed the name to Les Schwab Tire Centers four years later.
“A lot of my contemporaries have done very well working and making careers at Les Schwab,” Forrester said. “That’s been impactful for our community. We’re very concerned about losing this opportunity for people in our community.”
About 1,080 people are employed in the regional operations of the company, according to Economic Development for Central Oregon’s annual 50 largest private employers list. Bright Wood Corp.’s regional operation was ranked No. 2 with 1,138 employees in 2019.
The potential sale leaves some in the tri-county community in a state of flux while the company seeks a new owner, said Roger Lee, Economic Development for Central Oregon CEO.
“We understand that businesses do change ownerships over time,” Lee said. “What follows acquisition is key.”
Over the years, Central Oregon has seen new ownership result in consolidation that has meant downsizing or relocation of operations outside of the region, Lee said. That happened at Beaver Motor Coach, Seaswirl Boats, Marus Dental, IdaTech, Advanced Energy and Orcom.
At the same time, some change can even result in positive outcomes and expansion of operations. That happened with Bend Research Pharmaceutical when it was acquired by Lonza; Schlosser Casting Co. when it was acquired by Precision Castparts Corp., Medissis when acquired by Medline ReNewal, Hydro Flask when bought by Helen of Troy, 10 Barrel Brewing when AB/InBev bought the company, and Agere Pharmaceuticals Inc. when acquired by Thermo Fisher Scientific.