With the industry in flux as North America continues to grapple with the COVID-19 crisis, Hankook Tire America Corp. President Sooil Lee said the tire maker is well positioned for the future. Lee said Hankook has taken the initial steps toward a phase two expansion at its plant in Clarksville, Tenn., and has offered its first-ever rebate for its Laufenn brand, as consumers move toward value-driven products.
How would you describe business thus far in 2020?
2020 has presented the industry with many challenging and unique factors. COVID-19 has impacted every part of the industry, from logistics and supply chain to the way consumers are changing their purchase behaviors. These are challenges that the entire industry is facing and will likely impact the way the companies and consumers make decisions going forward.
What are some of the key changes the company has made in order to keep employees and customers safe during the COVID-19 pandemic?
Hankook Tire has taken precautionary steps to keep its employees safe by temporarily suspending operations at the Tennessee plant as well as encouraging/requiring employees to work remotely wherever possible. Additionally, we have enhanced our cleaning procedures and are regularly disinfecting workspaces and common areas.
For employees who are unable to work remotely, we are performing daily temperature checks (before entering workspaces), requiring that employees wear masks and stay at least six feet apart, and limiting the size of groups of employees working in closer contact.
Hankook also is providing frequent training and educational materials to inform staff about safety precautions. Our Tennessee plant has since reopened and also is taking these precautions to protect plant employees.
Hankook Tire global headquarters also provided masks and sanitizer for its global network since the early stages of the epidemic to keep its employees safe.
For our customers, we have been refraining from in-person visits to avoid the spread of the virus and have ramped up communication with dealers to ensure that their needs continue to be met.
This includes regular updates via phone, email platforms and video meetings in order to plan for future demand.
Do you expect any supply difficulties in the second half of the year? Why or why not?
Our U.S. warehouses have remained operational and our Tennessee plant is now open, so we do not expect an interruption in supply. We manage our supply through our SKU system so that we can efficiently supply customers in accordance to their demands with optimal fill-rate.
Additionally, Hankook is a global company with manufacturing facilities all over the world in several different continents. We are confident that our supply will remain strong.
The USW has petitioned to for antidumping and countervailing duties on passenger and light truck tires made in Thailand, South Korea, Taiwan and Vietnam. What is your company's reaction?
Hankook has been notified and is looking into details. This does not only concern Hankook, therefore, cooperation under the Korea Tire Manufacturers Association (KOTMA) will need to be reviewed.
We do want to point out that 60 percent of the tires exported from (South) Korea are for OE supply purpose, not replacement.
Nevertheless, Hankook is reviewing different options to best meet consumer demand such as producing OE tires in our Tennessee plant.
We will reorganize our global production portfolio and increase U.S. plant production to meet our U.S. stakeholder demands.
How might additional duties impact the industry?
It's difficult to say at the moment as it's still in the early stages and nothing has been decided.