New Michelin Plant Boosts Manufacturing `Tire Town’

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Dec. 12 (Bloomberg) -- Pete Selleck, president & CEO at Michelin North America, discusses the company’s newest tire-making plant in South Carolina and the state of manufacturing in the U.S. on Bloomberg Television’s “Bloomberg Surveillance.”


What is so attractive about being there?

We have been in south carolina now for 40 years.

As you said, we are starting up our ninth plant which will be making these large tires you see behind me.

That tire back there is the largest tire in the world.

It is 13 feet tall, weighs 11,000 pounds, it and used in large construction and mining applications.

This is the second earth mover tire plants we will have in the state of south carolina.

What is interesting about this, it not only is michelin building new manufacturing facilities in the united states, but 80% of these large earth mover tires we're making here will be exported around the world.

Teach, you make a good point.

That is a huge tire, by the way.

80% of those tires will go overseas.

If we look at the underlying fundamentals of the mining sector, we hear things from caterpillar, rio tinto also divesting assets.

What difference demand do you see in the mining sector?

The mining sector is very cyclical, as you well know.

It goes up and down.

There is still long-term growth.

This year, mining output will increase.

It is projected to increase next year as well.

When you make an investment like this of 750 million dollars, you're not making up for next year or the year after, but for the next decade.

The next 40, 50, 60 years.

Though question the minds need the technology we give them with these tires.

Pete selleck, what does the tire cost?

Is it going to cost me $5,000? it will cost you a little more than that, tom.

Clearly, the technology and innovation -- the reason michelin tires are so valued by our customers is because of their performance and their reliability and innovation.

Clearly, it is a good buy.

You did your graduate work at clemson university.

With the fourth infantry of the united states army.

Tell us about the manufacturing wars in america.

Do you have any sense that michigan, detroit, can compete with the advantages you have in south carolina?

We have been in south carolina now for 40 years.

Every company has to decide what they're going to do.

We came here for a number of reasons.

First of all, the infrastructure is right for us.

And the access to ports, in particular.

Come on.

I will buy all that, but it was a union differential, wasn't it?

You went to south carolina for a low wage.

Have those wages grown on a real bases in 40 years?

Tom, i don't agree with your hypothesis.

We operate 14 plants in the u.s. three are unionized.

The pay and benefits between our union and nonunion plants are virtually the same.


We have to continue to move forward and we are determined as workforce in all of our plans, in particular in south carolina.

How many workers will you hire for your plants in the next year?

We announced with the $759 investment we will be hiring 500 people.

We're doing that -- one of the interesting things, the critical skill and a plan like this are reliability technicians.

These are the people that install and maintain as you quit it.

We work closely with the local technical colleges here to engineer the curriculum to provide scholarships, basically, to help the transition from high school into our or places.

It has been successful.

There were headlines that bmw is considering building engines and north america for the first time.

The auto industry has done a lot of the manufacturing in the u.s. what is it about that that makes it such a good candidate for domestic manufacturing?

First of all, in the market here is huge.

We discovered during the recession it was very important for manufacturers of these large products to be as close to the markets as they possibly can.

Not only does that improve your adjusted cost, but more importantly, making specific products for specific markets of the closer your are to the market the better.

Bmw has a right here in north carolina as well.

South carolina seems to be a good place to manufacture.

The turbine clocks in at 30,000 or 40,000. let me ask a rude question.

Do you make money on automobile tires?

Is that such a generic is missed that you just do it to do it now?

No, we do it because we want to create value.

We are creating value and all of our sectors right now.

Automobile tires, commercial truck tires, and earth mover tires.

We also do very well in oe when we sell to new car manufacturers.

It is all about value.

Fuel consumption is very important with oe.

Tires have a huge impact on fuel consumption.

We of innovations that improve fuel economy, for example, light trucks, which is tremendously valued.

Give me a broad look at how washington plays into your business.

What is it like?

As you know, there are many, many moving parts to the economy.

Most of what happens in washington doesn't affect us unless he gets in the way.

Basically, most of the incentives, things that are interesting for us, with a to the state and local governments to help us.

The thing we're most concerned about in washington today is the fiscal problem.

What is happened is because interesting, but is nowhere close to what is to happen.

If the federal government can solve the tax problem, that will provide a booster to this economy.

We have got to have the sense of urgency to move forward.

Thank you so much, p selleck, we appreciate it.

11,000-pound tires.

And more than $5,000. and they must wear out.

Can you just keep going if you get a puncture?

I should have asked him.

You should see the piece of aluminum that goes on that tire.

You end up with that thought on washington.

The senate pulled an all nighter in washington to take care of

This text has been automatically generated. It may not be 100% accurate.


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