Jasper Rubber faces closure amid First Brands Group bankruptcy and fraud scandal

Jasper Rubber Products is set to permanently close by the end of April unless a buyer emerges, the latest casualty of a sweeping financial fraud that brought down one of the world’s largest auto parts suppliers.

On February 27, the company’s 345 employees received a WARN Act notice from parent company First Brands Group announcing the permanent shutdown of all Jasper facilities located on West 1st Avenue in Jasper with closures commencing April 30, 2026 and employee terminations effective that same date. Federal law requires the 60-day advance notice under the Worker Adjustment and Retraining Notification Act of 1988.

A buyer could still step in and opt to keep the facility operating, and according to Jasper Mayor Dean Vonderheide, that hope remains alive among workers and city officials alike.

“They’re hopeful that somebody might swoop in,” Vonderheide said, noting that employees had sensed trouble brewing as early as January, well after the Chapter 11 filing last fall.

“The more you dig into it, the more you just sigh and say, cross your fingers,” Vonderheide said about the ongoing troubles with the parent company, First Brands.

Vonderheide said he personally visited the company Tuesday with Mayor elect Ryan Craig to see what assistance could be offered. The city is also working with WorkOne and Dubois Strong to help affected employees with job placement, lateral transfers, and upskilling opportunities.

Still, the Mayor acknowledged the road ahead is uncertain. “A lot of industries are slow right now. Tariffs have impacted them,” he said. “We’ll just have to play it out.”

He also expressed concern that the company’s assets could be tied up in bankruptcy proceedings for an extended period, complicating any quick redevelopment or reuse of the facilities. Jasper Rubber is also among the city’s largest power consumers, adding another layer of concern for municipal finances.

Founded in 1949, Jasper Rubber was purchased by First Brands in 2024. Reflecting on that change in ownership, Vonderheide noted that the closure carries a broader cautionary lesson when a local privately held company is sold to a larger conglomerate.

“This is the concern you have when a privately held company — or in this case, an ESOP — sells to a larger organization and loses control locally,” he said. “When you lose control locally, you cannot predict your future.”

The ripple effects of the First Brand bankruptcy extend beyond Jasper, with some communities facing much greater impacts than Jasper and Dubois County. Champion, based in Albion, Illinois — a town of roughly 1,700 people where about 1,000 residents work at the facility — is also a First Brands company facing similar pressures. “Talk about a community that’s devastated,” Vonderheide said about the closure announcement there.

First Brands, which owned roughly 25 automotive aftermarket brands including FRAM, Autolite, Raybestos, StopTech, and TRICO, filed for Chapter 11 bankruptcy in September 2025. At the time of filing, the company held approximately $12 million in corporate bank accounts against more than $9 billion in liabilities, according to the Department of Justice.

Federal prosecutors have charged former founder and CEO Patrick James and his brother, former senior executive Edward James, with conspiracy to commit money laundering, conspiracy to commit wire fraud, and multiple counts of bank and wire fraud. Authorities allege the pair concealed liabilities, falsified financial statements, and double- and triple-pledged loan collateral — in some cases inflating invoice packages by hundreds of percent. Old loans were reportedly paid off with funds from new loans in what prosecutors describe as a years-long scheme.

Vonderheide was blunt in his assessment: “It’s a Ponzi scheme.”

As a consequence of the defendants’ fraudulent schemes, First Brands’ lenders and creditors now face billions in losses, the DOJ said in its indictment announcement.

First Brands, now operating as debtor in possession under new management, has also filed a civil lawsuit against Patrick James and related entities, alleging he “fraudulently secured billions of dollars of financing for First Brands, only to turn around and enrich himself and his family by misappropriating hundreds of millions (if not billions) of dollars.” A third executive, Peter Brumbergs, has already pleaded guilty and is cooperating with the government.

The Jasper closure is part of a broader wind-down affecting multiple First Brands locations.

WorkOne Southwest will be providing information on upcoming job fair opportunities in response to the closure. According to Director Sara Worstell, they also plan on reaching out to the company to set up times to meet with employees to assist with their employment needs.

“We try to work with employees to move them into comparable employment with comparable skill levels and wages,” she explained.

WorkOne maintains an office at Vincennes University Jasper, 850 College Avenue and can be reached at 812-634-1599 as well.