Is South Carolina the Next Tire Capital of the United States?

The tire industry continues to grow and expand in the Palmetto State

Photography courtesy of Michelin

In 2003, the New Carolina initiative, a public/private partnership founded by financier and South Carolina native Darla Moore, recommended pursuing and building several industry clusters in the state, including the burgeoning automotive industry and its full complement of suppliers. It was a fairly safe bet, with BMW and Michelin building cars and tires in the Upstate and the Midlands, as well as Bridgestone in Aiken County.

According to New Carolina, the automotive cluster in South Carolina, including suppliers and related businesses, consists of 1,530 companies and 341 manufacturing plants. A big part of the growing automotive cluster is the tire industry, which has sprouted like a well-fed teenager in recent years. And that growth has been concentrated in the Midlands.

In 2011, German-owned Continental Tire of the Americas announced a $500 million plant slated to come online in January 2014 in Sumter County. The plant will make passenger and light truck tires and bring more than 1,700 new jobs to South Carolina, making approximately eight million tires per year by 2021.
Bridgestone is in the midst of adding 850 full-time jobs to the 1,000 positions already at its facilities in Aiken, where tires for passenger cars and light trucks are made. The Japanese-based company also will add an off-road radial plant that will open in March 2014.

Michelin is adding 200 to 300 workers to its Lexington County facilities where it currently employs about 2,000 people making passenger car tires and large tires for earthmoving equipment.

All three companies say their investments in South Carolina reflect the business climate here and confidence in being able to find skilled workers. “As is the case with Continental in Sumter, success builds on success,” says South Carolina Commerce Department spokesperson Amy Love. “With recent announcements from Michelin, Bridgestone and Continental, South Carolina is positioned to be the tire capital of the United States,” she says.

According to the Commerce Department, South Carolina’s $1.7 billion in tire exports this past year ranked first in the nation and accounted for nearly 30 percent of all American-made tires exported in 2012.

This type of clustering and synergy was just what New Carolina organizers were looking for when they followed the words of Harvard professor Michael Porter, who first put forth the idea in the late 1990s. It is an idea that has caught on. “Regional industry clusters – geographic concentrations of interconnected firms and supporting organizations – represent a potent source of productivity at a moment of national vulnerability to global economic competition,” according to an April 2008 report titled, “Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies,” written by Karen G. Mills, Elisabeth B. Reynolds and Andrew Reamer and published by the Metropolitan Policy Program at Brookings Institution.

The report, part of the “Blueprint for American Prosperity” series, mentions New Carolina’s public-private development effort as one of several initiatives to increase industry clusters.

The companies have received millions of dollars in incentives to locate in South Carolina and additional incentives for expansions. The state technical college system helps train workers according to each company’s specifications, and a steady stream of engineers from the University of South Carolina and Clemson University keep the plants running.

South Carolina’s tire industry cluster began with Michelin in the 1970s. Michelin made its first tires in South Carolina in 1975 at a plant in Greenville. The company also opened plants in Anderson and Spartanburg. In the early 1980s, Michelin opened its plant in Lexington and by the end of the decade had moved its North American headquarters to Greenville. Greenville also is home to one of three locations worldwide where Michelin conducts research on tires and manufacturing processes.

Michelin attributes its success to its South Carolina workforce and the pro-business climate of the state. “It’s the people and making sure that we’ve got the best possible people to make the products we make,” says Mark Patterson, Lexington manufacturing site personnel manager for Michelin. “We make the best products in our industry, and frankly, we need the best people to do it.”

Keeping a pipeline for that talent is important to all the tire companies. To that end, Michelin has created a Michelin Technical Scholars program for recent high school graduates looking to attend two year technical trades programs in the state.

South Carolina’s $1.7 billion in tire exports ranked 
first in the nation and accounted for nearly 30
percent of all American-made tires exported in 2012.

“We’ve got 14 positions right now in our facility. We’ll give them a scholarship to go to Midlands Tech and train for a two-year automation technician degree and they will work part-time in our facility while they are going to school,” Mark says. “Ideally, they would come to work for us after they complete their degree.”

Mark says that Michelin sends representatives into local high schools, middle schools and even elementary schools to raise awareness about manufacturing jobs. Michelin has a tutoring program in Red Bank Elementary School, helped build a science, technology, engineering and math lab at Meadow Glen Middle School, and has robotics teams at White Knoll and Pleasant Hill high schools. “We contribute to those schools from a time and money standpoint,” he says.

But even more so, the battle may be to change opinions of working for a manufacturing company. “I think there’s still paradigms out there about what working in manufacturing is like, particularly in South Carolina, where we have a rich history in the textile industry,” Mark says.

When people hear that a manufacturing company is hiring, they may think of how companies operated decades ago. “So there’s still some work to do with regards to marketing and branding of manufacturing and what that means today,” Mark says. “We’ve got a very clean and automated facility. And when we give tours, people are frankly shocked. They do not expect to see what they are seeing.”

Keeping a steady flow of talent became a little tougher for Michelin with the arrival of Bridgestone in the 1990s. Bridgestone makes passenger car tires and light truck tires at its Aiken County plant, which is currently undergoing an expansion. The company also is adding a division there to make earthmover tires, which are 63 inches tall and are predominantly used by the mining industry. Total employment, including contract workers, will surpass 2,000 once the new facilities are up and running.

Part of the impetus for Bridgestone’s decision to build another plant to make the giant tires was the 2011 tsunami that struck Japan. “We realized we had a single source of supply for this tire,” says Steve Brooks, the chief project officer at the off-road radial facility. In addition to the diversification, the new location will put production closer to its Americas markets.

Steve says that the success that his company has had in Aiken, coupled with the tremendous support of local and state leaders, contributed to the decision to locate there. “The people in and around Aiken County make the difference for us at our plants,” he says. “With the Savannah River Site being down here and a large population employed there at one time, I think there has been a technology focus in this area that has been beneficial.” Steve says Bridgestone has hired some engineers from the former nuclear complex outside Aiken, and some of his engineers have gone to work at the Savannah River Site as that facility’s mission has been refocused over the years. “I think the labor pool has proven to be very sufficient to support the demands of our technologically advanced plants,” Steve says.

For newcomer Continental Tire, the presence of Bridgestone, Michelin and other international companies was part of the allure of the area. “The fact that BMW has been in South Carolina for 20 years and has consistently expanded, as have our competitors, and there are 1,200 international companies operating in South Carolina was definitely a very comforting statistic,” says Craig Baartman, plant manager for the Sumter facility under construction.

Craig also says that the state’s willingness to work with Contintental and help with permitting and work training was a major factor in the decision to locate in Sumter. “We also wanted to keep a certain amount of distance from our competitors,” Craig says. “We were respectful of their locations, and we wanted to keep a respectful distance from them. It was just part of the equation.”

Continental also has no worries about finding enough people to staff its new plant. “Sumter is historically a manufacturing-based town, and we believe that we can attract the respective skills and resources in this area,” Craig says.

The recent announcements that will add about 1,800 new workers to the tire industry in the state are not the end, all three companies say. There is room to grow and all plan to continue to look to South Carolina for that growth.

One byproduct of all the expansion is thousands of jobs for construction workers who were hit hard by the recession. About 800 construction workers were hired to build the expansion and new plant at Bridgestone alone.

As Commerce Department spokesperson Amy Love says, “New plants and expansions in manufacturing put people in construction and engineering professions immediately to work.” And that’s good for South Carolina.