Tire manufacturers may be looking east, but that doesn't mean they have altogether abandoned North America as a production base.
The latest news from the tire sector bears this out.
Michelin has found reason enough to spend $85 million to increase production capacity at its earthmover tire plant in Lexington, S.C. Toyo Tire & Rubber Co. Ltd. is pouring $180 million into a passenger tire plant in White, Ga. And while Goodyear found the lure of a $100 million sale price for its North American farm tire business more interesting than continuing in the field, Titan Tire Co. is quite willing to fork over that sum and boost its production capability in the U.S.
Sure, China is the land of opportunity for the tire industry, with tire manufacturers falling over each other trying to get a foothold in the low-cost production, potential high-consumption market. But there are reasons to invest in tire manufacturing in this region, too.
At Michelin, every earthmover tire made ``has a customer's name on it,'' one official said. Demand for tires for mining equipment is hot, and very much a global business. The firm has been pumping money into earthmover tire plants in Brazil and Spain, too, which hasn't harmed the Lexington plant at all. Michelin said 45 percent of the output from the Lexington facility is exported.
Meanwhile, Toyo has shown its commitment to serving its U.S. customers with its ultra-modern facility near Atlanta. The factory features Toyo's highly automated tire production system, Advanced Tire Operation Module, or ATOM, that doesn't even require tire builders.
Why open a plant in the U.S.? One reason Toyo gives is that it needs skilled labor-found in the U.S.-rather than lots of labor. Toyo also subscribes to the theory that if you want to compete in the world's largest tire market, you better make tires there.
Finally, Titan is showing it means business in America, via its purchase of Goodyear's Freeport, Ill., farm tire operation. The company, in spite of its past conflict with the United Steelworkers, was able to win overwhelming support from the union for the deal.
Despite the continuing exodus of general tire manufacturing from North America to less-expensive regions, these tire manufacturers have shown where there's a will, and a need, there's still a way to make tires on this continent.