SCOTTSBURG, Ind. (July 14, 2005) — Michelin North America Inc. has signed an agreement with Hyosung America Inc. for the latter to buy Michelin's steel cord facility in Scottsburg for an undisclosed amount.
Under the terms of the agreement, Michelin said Hyosung will offer employment to the plant's 220 current employees and maintain a comparable compensation package.
The agreement also calls for a 10-year supply contract for Michelin to buy steel cord from Hyosung. That contract is valued at $650 million over its life. Hyosung plans to begin operating at the Scottsburg plant in August, Michelin said.
Hyosung is a subsidiary of Hyosung Group in South Korea that operates in various industries, including synthetic fibers, specialty chemicals, industrial machinery, construction and information technology. Its 2004 revenue was $4.8 billion.
“We have a successful track record with Hyosung that makes us confident that this is the right decision for all concerned,” said Jim Micali, chairman and president of Michelin. In 2002 Michelin sold its textile cord facility in Scottsville, Va., to Hyosung.
“Hyosung has been looking to increase its manufacturing presence in North America, and Michelin's Scottsburg plant provides us with the perfect opportunity,” said Terry Swanner, vice president of Hyosung's North American operations. “In addition to our recent production expansion in China, this will enhance Hyosung's position as a world leading supplier of tire reinforcement products.”