WEST POINT, Miss. (AP) -- Executives with Yokohama Rubber Co. Ltd. say they will build a new tire plant in Mississippi because they see a global supply shortage for tires.
State and company officials gathered Monday at the Ritz Theater & Conference Center in West Point to celebrate the company's plans to build a factory. Later, Gov. Phil Bryant and company officials traveled to the 500-acre site northeast of town, where they drove across a field on all-terrain vehicles and unveiled a sign noting the site.
"I'd like to thank Gov. Phil Bryant and the state of Mississippi for their dedication in bringing this to fruition," Hikomitsu Noji, CEO of Yokohama Tire Corp., the company's American subsidiary, said in a news release. "I'd like to thank Mississippi as well for a very warm welcome."
The company plans to invest $300 million, hiring 500 people, in a first phase, and could invest $1.2 billion, hiring 2,000 people, over time. State and local governments could give more than $340 million in aid and tax breaks.
On Sunday, Bryant signed the incentives bill passed by the Legislature in a Friday special session, as well as a memorandum of understanding between the state and the company, Bryant spokesman Mick Bullock said.
"I am honored Yokohama has selected our state for its newest U.S. tire manufacturing facility," Bryant, a Republican, said in a news release. "This new plant will have a tremendous impact on the Golden Triangle region and on our state as a whole, and I welcome this highly-respected company to Mississippi and look forward to our partnership in the years to come."
Takayuki Hamaya, chief operating officer of Yokohama Tire Corp., told The Associated Press in a phone interview Monday that construction would start in September and production is scheduled to begin in October 2015. The company will seek employees later, but the state has started a website for people to express interest in jobs or contracts. Mississippi officials have said Yokohama workers will make about $35,000 a year, on average.
The company now makes tires for passenger cars and trucks in Salem, Va. It makes commercial tires at a joint-venture plant at a plant in Mount Vernon, Ill. Himaya said that it hasn't been decided yet whether the company will make passenger tires in Mississippi in later phases, but said the Virginia plant shouldn't be affected either way. He said Yokohama doesn't plan to withdraw from the joint venture in Illinois.
In March, Clay County had an 18.2 percent unemployment rate, the highest in the state. And a double-digit unemployment rate has been the norm in Clay County ever since then-Sara Lee Corp. closed the Bryan Foods plant in 2007, laying off 2,100 workers.
"When Sara Lee was operating, there were a lot of people who had decent incomes" Gus Shaw said last week. He and his father are opening a video game store on Main Street. "When Sara Lee shut down, the whole tide turned. A lot of people lost their jobs."
Clay County's population peaked in 2001 at just below 22,000 and decreases have gotten steeper in recent years. Latasha Russell, a West Point native who owns a hair salon on the same block of Main Street as Shaw's store, said many local residents commute for work to Tupelo, or even to the Tyson Foods chicken processing plant in Carthage.
She's planning on moving to suburban DeSoto County near Memphis, Tenn. "I think I'll have a few more opportunities," Russell said.
Yokohama, though, sees its opportunities in Clay County, near the Alabama line. Hamaya said it makes sense to build a truck and bus tire plant in the United States because that's where Yokohama sells the most commercial tires.
"By looking at what demand is worldwide, we definitely see a shortage of supply," Hamaya said.
Many Japanese companies have looked to increase production in the United States because the yen had been valued highly against the dollar. Hamaya noted the value of the yen has fallen in recent months, said any currency gain would only be a side benefit.
The Mississippi plant is the latest in a series of expansions for Yokohama. Earlier this year, the company announced plans to increase production capacity at plants in Russia, the Philippines and Thailand. The company is also considering new plants in China, India and Latin America.
Andrew Briggs, director of marketing and product planning, said it hadn't yet been decided whether the plant would produce for markets outside of the United States, Canada and Mexico.
The 1 million tires a year that the first phase of the West Point plant would make could become 4 million tires a year if the company follows through on three additional phases.
Mississippi would borrow $70 million to buy land, build infrastructure and train workers for the first phase, augmented by $12 million from West Point and Clay County, $1 million from the Appalachian Regional Commission, $900,000 from the Tennessee Valley Authority and $590,000 from Atmos Energy.
The state would borrow another $20 million for each following phase, for as much as $60 million more.
- Consumer Discretionary
- Phil Bryant