Dub this one Project Chat-a-lot?
An Indian tire maker who wants to move his prosperous tire manufacturing plant from Asia to South Carolina says he is courting state and local governments to get a suitable financial incentives package that would make the deal happen.
Usually – actually, almost always – it is the other way around.
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State governments, assisted by local governments, recruit capital-investing companies to come to their regions under the promise they will produce gobs of good-paying jobs, possibly attract other businesses and create significant tax revenue.
Armed with millions of dollars to offset land costs and improvements, they then give the prized prospect a code name such as Project Soccer, the secret name for the $500 million Continental Tire plant in Sumter County when it was under negotiation in 2011, and nobody talks. Nobody.
Nobody talks until the deal is done: signed, sealed and delivered. Continental Tire, by the way, is expected to fill 1,600 jobs that pay an average of $55,000 a year when it is fully completed.
But Javed Bodian, president and CEO of American International Tires, told The State Monday that he met with state and local officials last week in Florence County to discuss bringing his tire manufacturing operation to Johnsonville, a rural town of about 1,500 people. He also is considering a site in Pamplico and hopes to make a decision in the next 10 days. The Georgia businessman said he picked South Carolina after hearing of Gov. Nikki Haley’s recent economic development recruiting trip to India.
A hundred jobs in a rural town Johnsonville’s size has the impact of 700 jobs in a city the size of Florence, or 1,500 jobs in a city Columbia’s size, Johnsonville Mayor Steve Dukes said. “It would make a huge impact for our economy,” he said.
Bodian, who has run his tire manufacturing and import business in the United States for 14 years, said he sold off his India manufacturing facility about six months ago. “For the last 11/2years I have been thinking, it makes a lot of sense that we can make the tires here, rather than getting it made in China or in India,” Bodian said.
In addition, the U.S. Commerce Department last week took a big step closer to placing significant, punitive anti-dumping tariffs on Chinese-made passenger and light truck tires ranging from 17.7 percent to 81.3 percent, to make up for what the U.S. government says are unfair subsidies provided to Chinese manufacturers.
“That’s going to make it almost impossible for those guys to sell here,” Bodian said.
Those subsidies tilt the playing field against U.S. tire manufacturers and cost U.S. jobs, the Obama administration says. A final ruling on last week’s preliminary Commerce Department finding is expected in early 2015.
Bodian, who lives in Augusta and has his manufacturing and import tire business in nearby Martinez, Ga., said he wants to open a plant in the U.S. that would employ 100 to 150 workers in its initial phase, and the tire plant would produce off-the-road tires for commercial vehicles such as in construction.
“We would build the same thing we now import – stop importing and build here,” Bodian said.
Bodian, an India native, said he was close to buying a manufacturing property for his future plant in the Jefferson County, Ga. area, but heard while traveling in India a month ago that Haley was coming to the country on a trade mission.
“I heard about Nikki Haley going to India and trying to get some people to come over here and start some business in South Carolina,” Bodian said. When he returned home, he told people at a social gathering that Haley had been in his country, and someone there invited him to come to Johnsonville and look around.
Several factors make manufacturing tires in the U.S. ideal compared to China or India, Bodian said, including the cost of electricity, the cost of fuel and U.S. labor.
Bodian said the cost of bringing tires out of India or China to the U.S. “is huge” – almost equal to what the U.S. labor costs would be for building the tires here. For instance, it costs about $6,000 to bring a container of tires out of India or China to the U.S., he said, or roughly 20 percent of the value of the tire.
“Also the electricity is so cheap here in the United States compared to India, less than 50 percent of what we pay in India,” he said. “Fuel (in the U.S.) is almost free. In India, it is so expensive.”
Both Haley’s office and the S.C. Department of Commerce pointed out it remains their longstanding practice not to comment on economic development recruitment issues.