Commercial appeal: Yokohama plant celebrates milestone

WEST POINT, Miss. — The 570-acre field of commercial tire-making dreams that Yokohama Tire Corp. (YTC) transformed into its first U.S. truck tire plant a decade ago certainly has caused its share of sleepless nights.

Building a $300 million greenfield tire plant in the middle of rural Mississippi — at a time when unemployment was said to have eclipsed 20% — is a challenge in the best of times. Throw in machine-related issues, a high turnover rate and operating losses of $164 million in four years, all suffered before a global pandemic, and celebrating a positive milestone at the facility seemed like a pipe dream.

But on Oct. 11, a group of YTC executives, including North American CEO and President Jeff Barna, as well as a group of local dignitaries and the tire trade press, descended on the 1-million-sq.-ft. plant to celebrate the 10th anniversary of the facility's ground-breaking.

After surviving a rough patch — YTC scaled back production expectations in 2018 and took a $102 million "asset impairment charge" against its 2018 third-quarter earnings to account for a reassessment of the profitability for the facility, revealed in a stock exchange filing that year — the West Point plant keeps on truckin'.

Last year, the plant set a production record that the team expects to break again this year. The factory should produce around 800,000 units this year, according to Phillip Calhoun, general manager and vice president of Yokohama Tire Manufacturing Mississippi (YTMM), with an additional 25,000 to 30,000 units possible in the future.

The workforce of close to 900 — 1,200 including contractors and vendors — manufactures five sizes of commercial tires (22.5- and 24.5-inch rim diameters), in 43 different SKUs.

Yokohama Rubber Co. Ltd. recently awarded the plant its Presidents Award as the most efficient of the tire maker's 18 manufacturing plants across the globe. The plant has achieved its yearly production budgets, and its attrition rate has dipped significantly, as the plant embeds itself into the fabric of the community, particularly the youth.

"Like any new plant startup, we have endured our fair share of challenges," Barna said in his presentation, "but we wear them proudly as a reminder that the pursuit of excellence is, and always should be, our unwavering focus."

Calhoun, among a host of others — including YTMM President and Chairman Takehisa Morimoto — has been a key part of the plant's success.

A native of Mississippi, Calhoun joined YTMM a little more than two years ago after more than 28 years of manufacturing leadership experience, including stints at Ford Motor Co. and Nissan North America.

He credits the implementation of Lean Six Sigma — a process improvement approach that uses a collaboration to improve performance by removing waste and reducing process variation — and the buy-in from the workforce for the plant's success.

Calhoun described the process as everyone speaking the same language in order to fix and resolve problems effectively.

"If everybody fixes one problem, that's 900 problems that got fixed," he said. "It's the great accelerator, as I call it, to have a plant going from a good plant to a great plant."

He said the spirit of collaboration permeates the workforce.

"If I can help you fix your issues and your problems and make your job easier, who's gonna say no to that, right?" Calhoun said. "When people get buy in, (when) they see that the process actually works, not only is it making my job, better, but now we're more efficient."

He said the plant is focused on eliminating waste as well as rewarding employees for supporting the plant's goals.

''You have a standard; the standards are going to drive behaviors; your behavior is what makes the culture," he said. "So the key thing is to have good, effective standards. It's going to drive the behaviors you want to see. And then that's going to impact the culture.''

Calhoun said he addressed the plant's high attrition by improving several plant practices, including onboarding, training, developing talent from within and simply having more workplace fun.

''I have always believed people leave people," he said. "They don't leave the company. They leave you."

The task ahead is to keep ramping up production. The commercial market, Barna said, accounts for about a fifth of YTC's North American revenue.

Calhoun works closely with Stan Changdie, executive vice president of sales for YTC, to determine the correct product mix and maintain strong fill rates. Dealer inventory, Changdie said, is at healthy levels, months after the "perfect storm" of pandemic-related shortages caused a glut of product.

Changdie said Yokohama has "seen a very positive sell-out consistency over the course of the year," particularly in the second half.

"Our inventories are a lot more healthy, and we feel like we can get back to more normal cadence," Changdie said. "We are anticipating that we will continue to grow and start to see growth on the sell-in and sell-out side, which over the past year has been somewhat over the challenge."

Barna said the plant remains in its infancy — production didn't start at YTTM until October 2015. Expansion, he told Tire Business, wouldn't be part of any discussion for three more years, well after the plant reaches full capacity.

"Now, obviously, 'Built in America for America, American consumption,' helps from a policy standpoint, and ultimately a supply-chain standpoint," Barna said. "It creates jobs here in our backyard, which we like to do. So personal preference aside. I would like to think that we would be back to the drawing board sometime mid-2026, determining whether or not there's additional brick and mortar required based on our sales trajectory. That's when that conversation makes sense."

For the present, YTMM will focus on refining plant efficiencies, increasing production and producing the right products based on demand.

"We are proud for what we have accomplished, but we will not rest on that," Barna said. "Instead we look forward to the next 10 years. We intend to set even more records while achieving other worthwhile milestones. A manufacturing plant is a living, evolving entity.

"The most important inputs are the ones related to human capital, and our ability to staff our shifts with the highest energy, committed and dependable workforce in this region. It indeed takes a community to feed a plant, and we are grateful for the hundreds of people in this area who call YTMM their workplace of choice."