By Business Facilities Editorial Staff
From the January/February 2017 Issue
PROJECT TITLE: CONTINENTAL TIRE MANUFACTURING PLANT
ENTERED BY: MISSISSIPPI DEVELOPMENT AUTHORITY
The Mississippi Development Authority has taken the top honor in Business Facilities’ 2016 Economic Development Deal of the Year competition, winning our Gold Award for Continental Tire’s manufacturing plant in Clinton, MS.
The Continental Tire facility is a $1.45-billion investment that will directly create 2,500 new jobs over the next decade. The project also will create 2,740 indirect and 1,013 induced jobs during the same period, generating more than $1.3 billion in overall economic impact for the Greater Jackson region.
“Mississippi executed an impressive double play early in 2016 by winning the highly coveted Continental plant and simultaneously landing the new TopShip shipbuilding complex in Gulfport,” BF Editor in Chief Jack Rogers said.
“The Magnolia State had a banner year—and we fully expect that its dynamic and well-executed growth strategy will produce even greater success in 2017,” Rogers added.
Continental’s commercial vehicle tire manufacturing plant will occupy a multi-million-square-foot facility now under construction off I-20 West in Hinds County.
PROXIMITY TO MARKET, LOGISTICS AND A LARGE SITE SEALED THE DEAL
“There were a lot of different reasons [we chose] to locate in Mississippi,” Continental Tire the Americas Executive Vice President Paul Williams said at the project announcement in February 2016. “Logistically, Mississippi is in the right area, with access to our markets. The skill level was another attraction.”
Williams added that the flexibility offered by the site gave Continental the option of making more than truck tires at the new facility. “Ultimately, because of the site size, we’ll have the possibility of making passenger car tires and big tires [for off-road vehicles].”
MDA’s team, which included Hinds County Economic Development Authority, Greater Jackson Partnership/ Alliance, the City of Clinton and utilities Atmos Energy and Entergy, had to overcome a series of challenges during the two-year negotiation to seal the deal on what it called “Project Potter.”
These included the discovery of an abandoned graveyard on the proposed site; wetlands mitigation; the execution of a plan to transfer education trust land to the company (in exchange for land donated to the school system by Continental); and the approval by the Mississippi State Legislature of a $263-million incentives package for the project. The incentives package covered site acquisition and site preparation, infrastructure improvements and workforce training for the project.
Approximately 270 marked and unmarked burial plots were relocated to nearby Bolton Cemetery, a process that included a full archeological survey and the excavation of artifacts as well as remains. To expedite permitting for the project, Gov. Phil Bryant personally filed the necessary wetlands mitigation permits. Continental also was given access to the region’s community college system, which worked with the company to develop a customized workforce-training program for the project.
To answer the company’s concerns regarding workforce training, MDA and its partners mobilized a variety of state and regional resources. Continental Tire representatives toured the state’s WIN Jobs Centers, operated by the Mississippi Department of Employment Security, and got a firsthand look at the screening and recruitment efforts taking place at the centers. In addition to meeting with representatives of Mississippi’s community college system to discuss collaboration with the company on customized training programs, Continental’s team met with area business leaders for a roundtable discussion about challenges faced in the area and how these challenges are addressed.
Mississippi is counting on the Continental plant to replicate the success story in nearby Canton, MS, where Nissan North America opened a vehicle assembly facility in 2003, which now employs more than 6,400 workers and has indirectly created nearly 25,000 jobs.
“Nissan’s commitment to Mississippi helped draw a number of prime players to the area, including Toyota, Yokohama, PACCAR and Airbus Helicopters,” Rogers noted. “With industry giants like Continental lining up behind the state’s already impressive vehicle assembly facilities, Mississippi is accelerating into the top tier of U.S. auto industry manufacturing hubs.”
MISSISSIPPI: EPICENTER OF TIRE PRODUCTION
Mississippi laid down a big marker in 2013 of its intention to become the epicenter of U.S. tire production with its announcement that Yokohama Tire Corporation (YTC) had signed an agreement to build a commercial truck tire plant in West Point, MS.
Ground was broken last year for the Yokohama facility, the company’s first U.S. manufacturing facility built from the ground up. The project represented an initial capital investment of $300 million, creating 500 new jobs. Potential plant expansions could reach up to four times the original employment and investment levels. The roughly 1-million-square-foot factory, to be constructed on more than 500 acres of land, will include production, warehousing and operations facilities, and will produce up to 1 million tires annually.
“This is a historic day for Yokohama,” said Hikomitsu Noji, president of The Yokohama Rubber Co., Ltd., YTC’s parent company in Japan, at the announcement ceremony. “Since our entry into the U.S. market over 40 years ago, along with the subsequent acquisition of our plant in Salem, VA in the 1980s, Yokohama has been on a continual growth. Now we will build a factory in the United States for the first time. I’d like to thank Mississippi as well for a very warm welcome.”
Gov. Phil Bryant hailed Yokohama’s decision, saying “This new plant will have a tremendous impact on the Golden Triangle region and on our state as a whole.” Joe Higgins, CEO for the Golden Triangle Development said, “Yokohama’s decision to locate in West Point is a testament to our hard-working community.”
Mississippi’s Golden Triangle spans three counties on the state’s eastern border with Alabama. The three points of the Golden Triangle are anchored by Starkville, MS to the west, Columbus, MS to the east, and West Point, MS at the top. During the Great Recession, the unemployment rate in the Golden Triangle—one of the poorest regions in the state—topped out at a staggering 20 percent. Under Higgin’s leadership, the area has attracted $6 billion in new investments, turning a rural stretch of the Magnolia State into a red hot high-growth location.
“West Point offered the optimal mix of cost and operating conditions advantages that Yokohama was seeking to achieve,” said Darin Buelow of Deloitte’s Real Estate & Location Strategy practice.
The West Point tire production facility is operated by Yokohama Tire Manufacturing Mississippi (YTMM, formed in 2013 as a manufacturing subsidiary of Yokohama Tire Corporation).
PROJECT IMPACT ESTIMATES
- A direct economic impact estimated at $1.33 billion through 2030.
- 2,502 jobs directly created through 2030; 2,740 indirect jobs.
- Annual production of up to 1 million tires when plant achieves full capacity.