$200M Lexington Michelin expansion means 270 new jobs

05/09/2011 3:54 PM

05/09/2011 8:52 PM

Tire manufacturer Michelin North America said Monday it will expand and add up to 270 new jobs over the next two years at its Lexington County plant, boosting total investment at the facility to more than $1 billion and making it the company’s largest production site worldwide.

The tire maker — which has been operating in the county for three decades — said the $200 million expansion will allow it to increase production of its passenger and larger Earthmover tire lines.

Michelin’s investment puts the worldwide tire maker and distributor on par in the Palmetto State with the highly publicized capital investment of aircraft maker Boeing, announced nearly two years ago in Charleston.

The announcement also comes on the heels of a recently failed bid to bring an Amazon distribution center to Lexington County that would have created 1,249 jobs. That deal fell through after the General Assembly rejected sales tax incentives for Amazon and the company halted hiring efforts and construction.

Michelin CEO Dick Wilkerson said that the company fared well during the recession and that its North American market is ripe for expansion as the economy begins a tentative recovery and demand for tires increases.

“We must have additional capacity for high-performance car tires to meet our customers’ needs,” Wilkerson told a crowd at the plant. “We’re thrilled that the expansion will be in our home state of South Carolina.”

Michelin, headquartered in Greenville, is the most profitable tire company in North America, the CEO said, and has been for seven years. When the expansion is completed, the Lexington plant will employ more than 2,100 workers.

Construction on the new facilities is to begin immediately, officials said, with equipment installation completed by the first half of 2013.

Wilkerson said Lexington County Council and the state of South Carolina have been effective partners in bringing about the expansion.

Gov. Nikki Haley, who has clashed with Lexington County leaders in recent weeks over the Amazon deal, was on hand Monday for the announcement.

Haley, who is from Lexington County, has come under heavy criticism from local lawmakers for failing to push for the Amazon deal at a time of persistently high unemployment in the state.

Preparing to offer remarks at the event, Haley received a standing ovation from the Michelin crowd. “It is a great day in South Carolina,” Haley said, thanking the company for what it has invested in Lexington and in South Carolina. “This is a true collaboration, when you watch a company continue to invest in a state that continues to appreciate it.”

Haley said it is a celebration when a company that is here chooses to expand because the expansion is recognition of a good business climate, a low cost of doing business and an appreciation of right-to-work laws.

Lexington County Council Chairman Jim Kinard said the Michelin deal is to be celebrated for the breadth of the investment it represents, but — still smarting from Amazon’s decision to pull out of the county — he gave little credit to state leadership on the issue.

“(Haley) is just coming to celebrate (a milestone),” and rightfully so, Kinard said. However, “She was not involved in these negotiations at all.”

Bill Banning, council vice chairman and point man on economic development issues, said, “We’ve been working on this a long time.”

Banning has been one of the most vocal critics of Haley and others for not following through on an agreement Banning said the state had with Amazon to locate in the county.

Lexington County leaders said the Amazon debacle already has cost the state at least two other economic development projects.

“We weren’t worried about Michelin going anywhere,” Banning said, pointing to the county’s decision to extend tax incentives.

Lexington County Council gave final approval last week to extend tax incentives — worth $150 million — to Michelin for the expansion, Banning said.

The fee-in-lieu-of-taxes agreement between Lexington and Michelin lowers the company’s tax rate to 4 percent over 20 years, after which it reverts to the existing tax rate for the final 10 years of the deal.

Michelin makes tires for machinery ranging from airplanes and automobiles to motorcycles and farm equipment, opening its 1.2 million-square-foot passenger tire plant in Lexington in 1981 and its 825,000-square-foot Earthmover tire plant in 1998.

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