(From the April 16, 2012, issue of Rubber & Plastics News)
AKRON—Carolina is on their minds at Continental Tire the Americas L.L.C. and Michelin North America Inc. Make that South Carolina.
Conti on March 28 began construction of a $500 million plant to produce passenger and light truck tires at a site near Sumter, S.C. Less than two weeks later, Michelin disclosed it will build an earthmover tire factory in Anderson County, S.C., and expand a facility that makes OTR tires in Lexington, S.C., a $750 million investment.
So what's a state got to provide a tire company to get such consideration, projects that ultimately will add 2,300 jobs? Plenty, and South Carolina shows how it's done.
There are an amazing number of rankings of states devised every year. They compare everything from quality of life, to population density, to personal income.
South Carolina, the nation's 24th-largest state by population, ranks roughly halfway down many of the lists, about where you'd expect it. In some it's worse—No. 42 in household income—in others, better—15th in educational expenditures.
South Carolina's rankings on two lists stand out, and a case can be made they are related to each other.
Only seven states had a worse unemployment percentage in February than South Carolina's 9.1 percent. That mark actually is down from double-digits during the past couple of years. It hasn't been below 9 percent since late 2008.
Even the so-called “Rust Belt” states had better unemployment rates at last count.
That reality encourages state and local officials to do whatever is necessary to encourage job growth.
The other list is of “business friendly states,” devised from a survey of 500 CEOs. South Carolina is No. 8 in the rankings, and the state fares well in a number of similar lists.
“Business friendly” can incorporate many factors—wage rates, union presence or absence, local infrastructure, quality of life, access to skilled labor and regulatory environment. And, of course, taxation.
States most willing to pay the price win the investment money when tire companies are shopping for production sites. The financial and other incentives given to Conti and Michelin show South Carolina won't hesitate to give up the keys to the store.
That's how the game is played today.