Who says manufacturing is dead in the U.S.? Certainly not the tire industry.
The announcement last week that Nokian Tyres P.L.C. is going ahead with plans to build an 830,000 sq.-ft. plant in Tennessee — an investment of $360 million over five years — marks the fifth new tire plant project announced in the past four years.
Collectively, these projects — all being undertaken by non-U.S.-headquartered companies — represent nearly $3.7 billion in investment, 35 million units of annual tire production and the potential of 7,400 new jobs.
Two of these projects, Hankook Tire Co. Ltd.'s in Clarksville, Tenn., and Giti Tire Group's in Richville, S.C., are expected to start production this year, while the others, Continental A.G.'s in Clinton, Miss., and Qingdao Sentury Tire Co. Ltd.'s in LaGrange, Ga., are still several years away from production.
These investments come on the heels of several other new plant projects that recently were completed, including Trelleborg Wheel Systems' in North Carolina, Kumho Tire Co. Ltd.'s in Georgia and Yokohama Tire Corp.'s in Mississippi.
Those plants involved $750 million in investment and created more than 1,000 new jobs.
Considered together, these new factories should take a considerable bite out of the U.S.'s trade deficit in tires, which stood at $10 billion last year. Foreign-made tires represent a third of the U.S. car tire aftermarket and half of the truck tire replacement market.
And in terms of impact on North America, one shouldn't overlook new plants under construction in Mexico by Goodyear and Group Michelin. Both projects are expected to supply the U.S. in measurable quantities.
For Nokia, Finland-based Nokian Tyres, the U.S. factory "is above all a strategic decision to continue and enable Nokian Tyres' growth path," said Nokian Chairman Petteri Walldén, who expects his company's sales in North America to double by 2022, when the new plant hits full stride.
The U.S. plant, the seventh tire plant in Tennessee, will produce higher rim-diameter passenger, SUV and light truck tires that will be sold exclusively or primarily in the North American market.
Nokian may be the latest, but it no doubt won't be the last tire manufacturer to announce plans to build a U.S. plant.
Officials from Apollo Tyres Ltd., the Indian tire maker, said last month that the U.S. market was the firm's next priority. In fact, its vice chairman and managing director, Nareej Kanwar, said he was "100 percent" sure he could foresee a day soon when his company was inaugurating a U.S. plant. His timetable? Four to five years.
And that's more good news for the U.S. economy.