Williams: Technology, innovation drive Hankook's success

AKRON—The president of Hankook Tire America Corp. thinks his company's South Korean-based parent has a clear vision of what makes the firm successful and will help it continue to rise in the ranks of the top global tire manufacturers.

Rob Williams said Seoul, South Korea-based Hankook Tire and Technology Co. Ltd. makes its mark in the premium side of the tire business, and has a strong blend of being a global company, but with geographical units that have the freedom to operate "locally" in their individual regions.

"Hankook is highly advanced from a technology and innovation standpoint," he said. "I truly feel that we're driven from being a premium product."

Williams has been with Hankook Tire America for nearly six years, and was promoted to president at the beginning of 2023. He discussed a wide range of topics in an interview with Rubber News following his keynote address at the Tire Society annual conference Sept. 11 in Akron. The Hankook official weighed in on Hankook's place in the market, the firm's aggressive expansion plans at its plant in Clarksville, Tenn., and market trends reaching into 2025.

Hankook America Corp. handles the firm's business in the U.S. and Canada, accounting for a little more than 25 percent of the parent's global revenues of $6.84 billion in 2023. The unit is one of seven global zones for the tire maker, and is the firm's second largest, behind Europe.

Having such a spread around the globe is one of the strengths of Hankook, along with the ability to focus on what each region needs, according to Williams.

"We have a good mix of ex-pats and locals who work close together," he said. "Ex-pats know the inner workings of Hankook and the locals typically know the market, so we can collaborate together."

Just taking a look at Hankook's Technodome main R&D center in Daejeon, South Korea, speaks volumes about the tire maker's leadership in innovation.

A testament to that focus, Williams said, is the OE fitments earned on 44 vehicle makes and well over 100 models, most geared to the premium segment of the market.

"We're honestly second to none from a technology standpoint," Williams said. "In (South) Korea we are able to recruit some of the best and brightest engineers because of the fact that we've invested so much in technology and innovation."

Hankook has ranked as the No. 7 tire maker globally the past two years, and has voiced its goal to become a top 5 player.

With the Nos. 5-8 tire producers tightly ranked together within $1 billion of each other, Williams said this focus on evolving with new, innovative products is the key to breaking out of the pack. He mentioned Hankook's iON line of tires engineered for electric vehicles along with premium, long-haul tires on the commercial side of the business as examples of products that help the firm stand out.

He also pointed to the $1.6 billion investment at its Clarksville factory as a testament to the investment Hankook is willing to make to continue to grow market share.

In the region Williams leads—Mexico is part of Hankook's Latin America unit—the tire maker will look for continued growth both with innovative products and by boosting business in some channels where they haven't done as well in the past. The latter would include final mile delivery as an example of where Hankook can improve its fortunes, along with club channels at locations such as Costco and Sam's Club.

"It's about trying to meet the needs of our distribution network and understand what they need, and be responsive and be able to move quickly and adapt to the needs that they have," Williams said.

As for its core competency channels, he said his firm is very proud of its dealer partner network, and it has a two-fold plan to grow that critical business. "We want to continue to grow the share of our accounts with the current partners, and then strategically look for new distribution. More in markets where we might be underserved as opposed to just signing new dealers," he said. "We're very strategic in who we want to sign and where we want to sign them."

Hankook America will continue to work hard to boost its brand image in the market. Besides a marketing effort where Major League Baseball plays a big role, the tire maker has done a lot more consumer engagement events throughout the U.S.

"That is helping to directly touch the consumer and, more specifically, the consumers who are a bit more educated (about tires)," Williams said. "If they're coming to that type of event, they know a lot about their vehicle, they know a lot about the expectation of their vehicle, and how important the tires are to that."

It's been two years since Hankook revealed plans to spend $1.6 billion on a two-phase project that will bring to $2.2 billion the total amount the South Korean firm has spent at the Clarksville site, which began operations in 2017. Hankook has produced more than 5.5 million passenger/light truck tires annually at the factory, and when Phase 2 is completed, that capacity will double to 11 million units a year.

And Phase 3, to be constructed simultaneously with Phase 2, will bring 1 million units of truck/bus tire output annually, its first TBR production at the plant.

Williams said work on the expansion is moving along at a good pace, and is more than one-third of the way through completion. "All the ground work is done. Steel is up. Some of the roofing is up. Our goal is to be producing our first consumer tire by next summer, about Aug. 1," he told Rubber News. "And then to have our first medium truck tire produced by the end of 2025/January 2026."

Probably just as important, Hankook plans to bring in another 1,000 to 1,100 team members, bringing employment at Clarksville to 2,200 once the expansion is completed. But the firm won't be waiting until the upgrades are in place to begin the hiring process.

"You have to be proactive, you have to be assertive, you have to be willing to start doing that now," Williams said. "We're not waiting until next year to do that. We may have some extra staff in the interim, giving them time to get trained. So when that time hits, we're not waiting until the last minute to start recruiting."

The message from the South Korean parent firm, he said, is clear: "I think they see the North American market as vital to their global growth. I think they see we have been working tirelessly to have the infrastructure in place to allow us to have this growth."

Technology at the new plant will make it one of the most advanced manufacturing facilities in the industry, according to Williams. "The reason why I say that is a lot of our partners who have had the ability to attend other plants will tell us that," he said. "They say they're very impressed with how high-tech it is. How automated it is. How clean it is. How well-lit it is. The process flow seems almost seamless because of the high level of automation."

Once at full capacity, about 60 percent of Hankook's domestic needs will come from Clarksville, and most of the tires will stay in the Americas. But that's not just replacing tires currently made at the parent's South Korean plants—growth expectations are very high in the U.S. and Canada.

"The reality is that we all understand what the market challenges are: That we need to be very aggressively going after new business to utilize that capacity in the next 12-18 months," the Hankook America president said.

The most noticeable move in the market is what Williams calls a "tiering down effect."

That means the Tier 3 and 4 tires—typically offshore products made in nations like Vietnam, Thailand and Cambodia—are growing exponentially, while the premium Tier 1 and 2 lines are basically flat.

So if you're a company like Hankook that lives in the premium end of the tire market, that could pose some problems. But Williams said patience is the key to getting through the current market situation.

"What we do is continue to build on the success we have with more of the consumer activation events. Getting our brand name out there through social media, through commercials," he said. "... I think the reality is you have to keep doing what you're doing, but maybe do more of it. And be responsive to needs in the market."

Having a long-term view is also a necessity. "Within the industry, you see the peaks and the valleys," Williams said. "You kind of understand when the market goes that direction, you have to continue doing all the things that you need to be doing.

"You have to continue doing all of the basics, because eventually the market, when it changes, those that are the most prepared will benefit from it, and that's where we'll be."