SANTA ANA, Calif.—Yokohama Tire Corp. had occupied the same headquarters and distribution site in Fullerton, Calif., for nearly three decades, but now the tire firm has moved those functions to two new leased facilities.
The North American unit of Japan's Yokohama Rubber Co. Ltd. moved its headquarters in December to an office building in Santa Ana, shortly after its distribution center was moved roughly 30 miles to a new building in Chino, Calif.
The relocations were needed because the headquarters in Fullerton couldn't accommodate any more staff, and the distribution center was outdated and no longer could support its West Coast business, according to Jeremy Kahrs, senior director of supply chain, logistics, corporate planning and corporate quality for Yokohama Corp. of North America.
It made sense to separate the functions because, he said, different factors help determine the best spot to locate each.
“For the distribution center, you're looking at how much does it cost me to move tires and how
much does real estate cost,” Kahrs said. “When we did the analysis for the distribution center, there really was a sweet spot in terms of cost of real estate and cost of transportation, and the Chino area was right in the middle of that sweet spot.”
For the headquarters, it's important to be close to where your employees are, along with proximity to vendors and an airport, if possible.
“We decided pretty early on that Orange County was where it was going to be,” he said.
The firm basically looked within a 15-mile radius around the Fullerton location to find a location that would have a minimal impact on employees. “If you move 40 miles or so, you may as well move to another state because so many of your employees are not going to be able to make a commute like that regularly,” Kahrs said.
Yokohama has about 50,000 square feet of usable office space at its new site in Santa Ana, compared to about 32,000 square feet in Fullerton. It had 180 employees at the former headquarters and was at capacity, he said. The firm currently employs 180-190 in Santa Ana but can accommodate up to 225.
The headquarters represents an upfront investment of between $1.5 million and $2 million for improvements to the office apace and will cost $15 million over the life of the 10-year lease, Kahrs said.