South Carolina is fast becoming the leading producer and exporter of tires in the United States, overshadowing once-mighty Ohio as the Tire Capital of America.
• The Palmetto State recently overtook Ohio – home of Akron, Goodyear and its iconic blimp – as the nation’s No. 1 tire exporter.
• In a year or two, experts predict, the state will achieve an even more impressive milestone – it could roll past Oklahoma as the nation’s No. 1 tire manufacturer.
South Carolina has nine active tire plants and two more on the way – more than any other state.
“Clearly, South Carolina is doing a very good job at demonstrating to our manufacturers it’s a very good place to be,” said Dan Zielinski, senior vice president of the Rubber Manufacturers Association, the Washington, D.C., lobbying firm that represents the eight largest tire manufacturers in North American.
So why is South Carolina outpacing other states, even Ohio, for the title of Tire Capital?
“Many say the reason is that South Carolina has a ‘business friendly environment’ – that means it’s a right-to-work state, non-union,” said Bruce Davis, who has covered the tire industry for 33 years at the Akron-based Tire Business magazine. “You can definitely make a case for that. … But there is no one single factor. It’s just the ease of doing business down there, from top to bottom.”
The state’s anti-union stance coupled with low taxes, a ready, comparatively cheap work forcee, a major port and a central location on the East Coast with substantial interstate highways and rail hubs all are part of the winning formula, experts said.
“The state is good for getting heavy stuff out and raw materials in,” Davis said.
Those factors allowed South Carolina to nearly triple the number of tires Ohio shipped overseas in 2011, in the process capturing about a third of the nation’s entire export market for tires. The state in 2011 also passed neighboring North Carolina for the No. 2 spot on the tire manufacturing list – for both domestic and foreign markets – and is closing in on No. 1 Oklahoma.
But experts added that the willingness of state, county and municipal governments to work one-on-one with company officials to locate plants, the judicious use of state incentives – others would say generous – along with offers of free land and other local perks are the closers in competitions with other states.
“The state government, county governments and local governments all seem to be mobilizing more resources (than other states),” Davis said. “And it’s not just money.”
Mark Cook, of the Washington, D.C.,-based Tire Industry Association, agreed that the combination of a business-friendly environment, a strong transportation system, workforce training and incentives – along with personal attention from the mayor’s office and county council chamber to the governor’s mansion and the State House – is paying off.
“That … has all come together to create a perfect storm for South Carolina,” he said. “And those are big factors in its rise in manufacturing overall.”
‘More interested in the jobs’
As an exporter, South Carolina is on a roll across the board:
The state currently holds a 30 percent share of U.S. tire exports.
• Car and light truck/SUV exports were up 52 percent in 2011.
• Overall, the state’s exports increased 21.4 percent in 2011 over 2010, making it the 17th largest exporting state.
• In total, South Carolina shipped some $24.6 billion in goods to 198 countries around the world.
“We are so in the game now,” said Lewis Gossett, chief executive of the S.C. Manufacturing Alliance. “They are all coming for the same reason. They are close to market – whether it’s direct to the customer or to the port. If they need a quality work force, we can get what we need from the technical colleges. These guys can come to South Carolina and get the best service imaginable.”
And those tire export and production numbers will be going up.
All three of the state’s tire companies – Bridgestone, Michelin and now Continental – made major announcements of new plants or expansions in the past year.
• Michelin announced Tuesday it will expand its Earthmover tire plant in Lexington County and build a plant to make the 4-ton tires for heavy construction equipment in Anderson County. The company’s announcement brings its total investment in the state in the past year to about $1 billion and more than 750 new jobs.
• Continental Tire recently broke ground on a $500 million plant in Sumter County that promises 1,600 new jobs by 2021.
• And Bridgestone is investing $1.2 billion to expand its Aiken County operations and hire 850 more workers – the biggest single corporate investment in state history.
For those three projects, the state offered the companies a total of $55 million in incentives, mostly for site preparation. That doesn’t include job-creation tax credits that the companies can apply for later.
“You’re planting a seed and letting it grow,” S.C. Secretary of Commerce Bobby Hitt said in an interview with The State. “Investment is important, but I’m more interested in the jobs than investment.”
For good reason. The state’s jobless rate has been one of the highest in the nation.
However, South Carolina’s employment rate dropped for the seventh month in a row in February, to 9.1 percent. That’s down 2 full percentage points from its Great Recession-high of 11.1 percent in August 2011.
That and the recent announcements led a North Carolina journalist to pen a blog headlined: “When It Comes to Jobs, the Other Carolina is Ahead.”
Manufacturing was credited with much of that improvement, leading the state’s recovery by adding 28,000 jobs over the past year.
“All sorts of manufacturing jobs are coming here,” said USC economist Joey Von Nessen, adding, as a result, "We’re seeing improving economic conditions across the state."
The numbers are good news for Gov. Nikki Haley, whose approval rating was at 34.5 percent, according to a Winthrop Poll released in December. Republicans insist, however, that subsequent internal polls show her tracking much better.
Haley has made job creation the top priority of her administration, and pundits have said the number of big announcements, led by tire manufacturing, has buoyed her reputation at home as a job creator, while her book tour is ingratiating her with the national media.
“I never knew I loved tires so much,” she said at last week’s Michelin announcement.
In an interview with The State last week, Haley credited her fierce opposition to unions – “we have to keep pushing them out” – and the state’s work force and incentives for the successes. She also pointed to Hitt’s and her own personal commitments to business leaders.
“Every new CEO that comes, I give them my personal cellphone number,” she said. “We build a relationship. We let them know, ‘We are with you for the long ride. You’ll have support all the way through.’ ”
Tires are just one fertile field in South Carolina’s manufacturing landscape.
With an automotive sector anchored by the stalwart BMW plant in the Upstate – the state recently reclaimed the top spot as the nation’s No. 1 exporter of vehicles from venerable Michigan and its Motor City – and an aerospace industry in the Lowcountry emerging around Boeing, South Carolina is on a roll with more than tires, experts said.
“It’s the general good business climate,” Gossett said. “With Haley and Hitt, it reminds me of the heady days of (former Govs. Carroll) Campbell and (David) Beasley.