Tire Manufacturer Kumho’s Bibb Plant Will Bring Jobs, Impact Local Economy

By Linda S. Morris, The Macon Telegraph, Ga.

Feb. 24–Kumho Tire Co.’s plans to open in Bibb County next year are part of its goal to become the fifth-largest tire maker in the world by 2015.

It will be the Seoul, South Korea-based company’s first manufacturing plant outside Asia.

Kumho Tire, now considered the world’s 10th-largest tire maker, announced plans Jan. 29 to build a 1.3 million-square-foot plant on 130 acres in Sofkee Industrial Park in south Bibb County.

Kumho Tire plans to create 450 jobs and make a total $225 million investment in its plant here during a two-phase process. The company plans to start construction in May, with production expected to begin in October 2009.

Landing another international company in Bibb County is a huge boost to the local economy, but outside the tire industry, little is known locally about Kumho Tire.

“We have grown very rapidly here in the U.S. in the last five or six years,” said Dan Davis, public relations manager for Kumho. “Our sales have gone from about $150 million in 2002 to $565 million here in the U.S. in 2007.”

The company had $2.4 billion in sales worldwide in 2007.

The company’s plan to double its presence in the tire-making market is “a very aggressive goal for us,” Davis said.

But the company has taken an aggressive approach since it was created 48 years ago.

In 1960, Samyang Tire, the predecessor of today’s Kumho Tire Co., was established, and the next year it produced about 20 tires a day. By the end of the 1960s, it shipped tires to Thailand for the first time.

By the mid-1970s, the company produced one million tires a year, a record in Korea, according to the company’s history. In 1983, its total output was more than 30 million tires. In 1985, the name changed to Kumho Tire, and in late 1990, its total output exceeded 100 million tires.

Other than its South Korean plants, the company has opened plants in China and Vietnam during the past 18 months. It has technical centers in Korea, England, China and in Akron, Ohio.

Kumho’s U.S. headquarters in Rancho Cucamonga, Calif., opened in 1975. It is home to the company’s 830,000-square-foot central distribution center. It has other distribution facilities in Atlanta, Chicago, Columbus, Ohio, and Dallas, Texas.

Kumho Tire is a subsidiary of Kumho Asiana Group, a large South Korean conglomerate, which includes an airline, bus terminal, resort, rental car company, life insurance company and several chemical companies.

At the Bibb County plant, Kumho Tire is expected to produce about 2.1 million tires a year for passenger cars and trucks during its first phase and anticipates making 3.15 million tires during a second phase if its market share increases as expected, Davis said.

The company plans to bring about 15 workers and their families to help get the plant up and running, said Pat Topping, senior vice president of the Macon Economic Development Commission. It is common for foreign-based companies to do this, and usually the workers are rotated in and out every few years. This past week, three Kumho executives were in Macon as part of an advance team to set up an office until they can move into the new facility, said Chip Cherry, president of the Macon Economic Development Commission.

“These three will be here to run the company,” Cherry said. “This is a big deal for (Kumho) and they want to make sure they are here throughout the entire process.”

These executives have to establish relationships with bankers, suppliers, energy providers, engineers and others to get the plant up and running, he said.

Several efforts are under way to help transition the workers and their families into the local community, Topping said. The Korean-American community here as well as people in the school systems helped put together a relocation team to assist the Korean families in finding places to live, learn how to get into the schools and provide other assistance. “The (company’s) culture is creative and innovative,” Davis said. “Some of the products we’ve come up with is a result of fostering that kind of ‘hey, let’s reach for the stars’ kind of culture and attitude.”

It is the first and only tire company making aroma tires.

“This tire smells like lavender rather than rubber,” he said. “If you have these tires on your car and park it in your garage, your garage will have a pleasant, lavender smell rather than smell like trash cans and lawn mowers.”

It is also the only company making colored smoke tires, which are popular at racing burnout events, Davis said. Instead of making white smoke, the tires make red, blue or yellow smoke.

KIA PLANT PLAYED INTO DECISION

Kumho tires are distributed in the U.S. through more than 4,000 retail centers, according to the company, including national retailers such as Discount Tire, Sears, Pep Boys and the Tire Rack.

Some Middle Georgia retailers that carry the tires are in Macon, Gray, Centerville, Milledgeville and Byron, according to the company’s Web site.

Del’s Automotive on Vineville Avenue has carried Kumho Tires for about 10 years, said mechanic John Gay.

“They are a good tire, an economy tire,” Gay said. “It’s the best thing for the buck. … As far as the quality of the tire, it’s a good tire, hands down.”

Gay said he is happy the company will build the manufacturing plant here.

“Anytime you get a plant in the U.S., it’s a good thing,” he said.

Kumho makes tires for all kinds of vehicles, including high performance, passenger, sport utility vehicles, recreational, trucks, buses, agricultural, construction, as well as aircraft.

John Plumstead, president of the Georgia Tire Dealers and Retreaders Association, said the company first came into the U.S. “in a big way with truck tires, and they had a nice passenger car line,” he said. “High performance (tires) have increased with everybody.”

Kumho is a member of the association.

Plumstead also is president of Tire Distributors of Georgia, which is based in Macon. At this time, he doesn’t carry Kumho tires, he said.

“No particular reason, I just have my own brands,” he said. “There is a very distinct possibility that Kumho will be another line in my inventory (in the future). It would certainly make sense.”

The Bibb County plant will not only make replacement tires but it also will be a tire supplier to major car makers in the United States, company President/CEO Sae Chul Oh said in January.

“Kumho Tire’s new plant will be able to materially benefit U.S. automakers by reducing their import customs duty from overseas plants as well as related logistic costs,” Oh said.

The Kia automobile plant under construction in West Point played into Kumho’s decision to locate its tire plant here because it supplies tires for Kia, Davis said.

“One of the things we looked at was proximity to original equipment manufacturers and the automakers,” he said. “That helps reduce transportation costs, helps with just-in-time-delivery and other things. I’m sure (the Georgia Kia plant) was one of the factors that weighed into the decision.”

‘GOOD REPUTATION’

The incentives offered, combined with labor costs, proximity to transportation and customers were some of the reasons Kumho Tire chose to locate here, company officials said.

At the same time, local economic development officials looked at not only what benefits the company would create, it considered the ramifications of bringing a tire maker to the county.

Topping said when he began working with Kumho last year on a site for the plant, he was already familiar with the company. Topping worked for Palmer Tire for 18 years with its buying group before leaving by 1990.

During his own research, Topping found that Kumho “had a good reputation for building quality tires,” he said.

And he learned if Kumho Tire came here, other businesses would likely follow, he said.

“I knew it was a true manufacturing company and would also have associate companies that would be required to locate fairly close to supply them with raw materials,” he said. “There is up to at least five suppliers (Kumho) has told us about. We are trying to set up meetings with them in Korea in the next couple of months.”

Despite the obvious benefits of new jobs and the large investment the plant would have here, Topping had initial concerns about the environmental impact of bringing a tire maker to the county.

So he paid a visit to the Toyo Tire & Rubber Co. in Bartow County, which began operating in 2006.

“My concerns were going to be the air quality, noise, any water discharge and smell,” Topping said.

He talked to his counterpart in the area and a friend who lived less than a mile from the plant and neither voiced any concerns. But Topping wanted to see for himself, so he drove around the plant taking video. He talked to a Federal Express driver and a postal worker. He talked to people in a cafe who lived there. No one had a problem, saying they couldn’t smell or hear it.

Melinda Lemmon, executive director of the Cartersville-Bartow County Department of Economic Development, said while their community has had a good experience with Toyo, it’s hard to make a comparison between the two tire companies.

“First, let me say that not all companies are alike, nor the concept of corporate citizenship from country to country, nor technology even within the same industry,” she said in an e-mail. “I’m hopeful that Kumho will be as good for Macon as Toyo has been for Cartersville-Bartow County.”

Topping also talked with a friend in Rome about the Pirelli Tire Co. plant there and to a state official who had visited Kumho’s plant in Korea and heard the same thing.

“They all got me comfortable” with the tire maker’s being a good corporate citizen.

Topping said he’s aware the tire business has “made a quantum leap from where it used to be,” regarding environmental issues.

“There are different levels of air permits (manufacturers) have to get and this tire plant will be considered a minor source,” said Topping, referring to information he received from the Georgia Environmental Protection Division.

Kumho officials want to be a good neighbor, Topping said.

“They are very, very concerned about their image in the community, both of their workers and environmental image,” Topping said. “That was a big thing they talked about.”

To contact writer Linda S. Morris, call 744-4223.

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