this invention concerns a method of making a urethane - terminated polycarbodiimide and the product resulting therefrom wherein the product displays unique hydrolytic degradation stabilization properties for polyester urethane rubbers and peroxide cured hydrocarbon rubbers . the method involves reacting an arylene diisocyanate with a stoichiometric deficiency of a primary or secondary aliphatic alcohol containing no other isocyanate - reactive substituents , thereby converting less than all of the isocyanate groups to urethane groups , and thereafter admixing thereto a carbodiimide - forming catalyst to polymerize the unconverted isocyanate groups and form the urethane - terminated polycarbodiimide .