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May 01, 2013 02:00 AM

U.S. R&D Center plays vital role in Hankook's growth

Mike McNulty, Crain News Service
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    Photo by Mike McNulty, Crain News Service
    Thomas Kenny took over as head of Hankook Tire's U.S. R&D center in Uniontown, Ohio, in March.

    UNIONTOWN, Ohio (May 1, 2013) — Hankook Tire Co. Ltd. in 1992 was a relatively small, predominantly South Korea-focused tire manufacturer — and barely a blip on the North American tire industry radar — when it decided to open a research and development center in Akron, its first overseas R&D facility.

    That decision proved to be an important step for the ambitious Seoul-based tire maker, which had its sights set on climbing the global tire rankings. Though it had a long way to go, it figured that a research center located in a key area of America eventually would help it gain ground on U.S. soil.

    It was right.

    The Akron R&D center, now located in Uniontown, has proved to be a key force in helping to expand Wayne, N.J.-based Hankook Tire America Inc. and its South Korean parent over the last 21 years. Now one of four technical centers Hankook operates worldwide, it also plays a pivotal role within the company's R&D global network.

    Hankook was much, much smaller in 1992 – ranked 11th with global sales of just $759 million — but was growing, said Thomas Kenny, the company's new vice president of technology and head of the Uniontown technical center. The company had one factory when he joined the firm in 1994. It has added six since then.

    Long-time industry veteran Ray Labuda was in charge of the center when it opened. He spearheaded the move from small quarters to a much larger facility that Hankook built in 1996 in Uniontown, just a few miles south of Akron's city limits. Mr. Labuda recently retired after serving for 20 years in the post Kenny now holds.

    (Tire Business photo by Dave Zielasko)
    Thomas Kenny (right) is succeeding Ray Labuda (left), who recently retired as head of Hankook Tire America Corp.'s Akron Technical Center in Uniontown, Ohio.

    Before taking over his present position, Mr. Kenny spent 14 years in the center's tire development sector and four years as manager of tire development and engineering.

    He said Hankook showed great foresight in 1992 when it added the center. He pointed out that the firm needed a presence in North America to build its business outward.

    The center was instrumental, for example, in Hankook's gaining its first OE technical approval with Ford Motor Co., in 1996. That led to the company's initial OE supply contract with Ford three years later.

    It is one of several major moves the company made in the last 20 years that has vaulted it from the back to the front of the pack.

    "We're a critical part of Hankook," Mr. Kenny said. "The company has been growing by about 15 to 20 percent a year and wants to be in the top five by 2020."

    Hankook posted 2012 sales of $6.26 billion, with an estimated $1.4 billion of that coming from North America.

    Mr. Kenny came on board two years before the center was moved to the sprawling 48,000-sq.-ft. Uniontown facility. "We had 15 people working for us then. Today we have 40."

    The center primarily handles tire development for the North American market with a majority of its work focused on OE fitments in the U.S., Mr. Kenny said. The firm's OE business has grown from that single fitment with Ford in 1992 to fitments with Ford, General Motors Co. and Hyundai/Kia Motors, which together added up to an estimated 4 percent North American OE market share last year.

    "We also have research and test departments and a fully functioning lab that develops compounds for use in this market as well."

    Hankook earmarks about 5 percent of its annual sales toward R&D, Mr. Kenny said, "so there is a large commitment.

    Our center in Akron plays a key role in several areas for the company and is vital for the support of our OE customers and the development of new technologies for the future."

    Byeong Jin Lee, who in January was named president of the U.S. sales company, agreed, calling the Akron Technical Center "one of our company's most valuable resources."

    Mr. Kenny, who has more than 30 years' experience in the tire industry, is responsible for overseeing the general operation of the facility. His primary responsibility is to facilitate effective communications between the center and the other Hankook technical centers in other parts of the world.

    Because many programs are not global, he said, it is critical that all branches of the company operate effectively among the various centers, including headquarters, R&D and manufacturing.

    At the Akron technical facility, "it's important to have the right people doing the right jobs with the right tools," Mr. Kenny said. "It's the difference between sitting on the couch and yelling at the coach … and being the coach."

    Hankook operates three other R&D centers -- a primary operation in Daejon, South Korea, and regional sites in Germany and China – and is building a $130 million global R&D center in Daejeon, South Korea, that is twice the size of the present operation in the country.

    It plans to maintain some research operations at the current center.

    Because the new R&D site "is still many months away from completion, it is not possible to say exactly what will stay at the current facility and what will be relocated," according to Mr. Kenny.

    Hankook built the Uniontown building with growth in mind, he said.

    It uses advanced engineering concepts and new compounding technologies to develop products aimed at U.S. driving conditions and plays a key role in accumulating new technologies that meet international standards for Hankook's R&D network, he said.

    It also does some research on OE products for overseas markets, Kenny said.

    The center handles a good deal of testing and research on a variety of projects and products. "Though we test vehicles and tires, our only focus is tires," he said.

    An auto maker works closely with the facility's staff to come up with the proper tire for a vehicle, Kenny said.

    In-house software is used to design the tire, and engineers at the center come up with a prototype that is built at one of Hankook's production factories or—much less often — at its pilot manufacturing plant at the main R&D center in South Korea, he said.

    The information is sent to the firm's Korean technical center, and tires are manufactured and shipped back to the Akron site for inspection and testing. It can take a few development cycles to come up with the right tire.

    ____________________________________________________________________

    This story appeared originally in Rubber & Plastics News, a sister publication of Tire Business.

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