$130M OK’d for Clay County tire plant

By Bobby Harrison/NEMS Daily Journal

JACKSON – Mayor Scott Ross said people in Clay County “did not put their heads down” when Sara Lee closed its operations in West Point in 2007, cutting about 1,200 jobs.
The outgoing West Point mayor said state and local officials began working on new economic development projects when that happened.
On Friday, that worked paid off when the Legislature – in about two and a half hours in special session – passed a $130 million incentive package to lure Yokohama Rubber Co. Ltd., to Clay County, which currently has the state’s highest unemployment rate.
“Economic development is a team sport, and the Legislature quickly completed its task to support job creation in Mississippi,” said Lt. Gov. Tate Reeves, who presides over the Senate.
Yokohama Tire Co., the Japanese tire maker’s American unit, eventually could employ 2,000 people. It will produce large tires for trucks and buses at the site just northeast of West Point. It will have annual production capacity of 1 million tires.
The company will invest $300 million of its own money during the initial phase.
During the first phase, 500 people will be employed when the plant begins operation in 2015. Construction is scheduled to begin in October.
Gov. Phil Bryant, who traveled to Japan to meet with company officials and met with them twice in Mississippi, said the plant “will have a positive impact on the state’s economy for years to come.”
Bryant and company officials will have an official announcement at 10:30 a.m. Monday at the Ritz Theater and Conference Center in West Point.
The only minor speed bump in passage of the bill came when Reps. Steve Holland, D-Plantersville, and Brian Aldridge, R-Tupelo, tried unsuccessfully to amend the bill to provide some of the same incentives to Cooper Tire in Tupelo that Yokohama will get in Clay County.
The House voted down that proposal after Ways and Means Chair Jeff Smith, R-Columbus, urged members to wait until a later date to take up Cooper’s needs when more was known about them.
Holland and Aldridge tried to provide Cooper an exemption on the sales tax on the purchase of equipment.
“I can tell you with mathematical certainty that Cooper wants to relocate its headquarters” from Ohio to Tupelo, Holland said.
Kathy Gelston, the chief financial officer for the Mississippi Development Authority, told Holland and others during Friday morning’s meeting of the House Ways and Means Committee that her agency knew of issues facing Cooper and there might be a later special session to deal with the Lee County employer.
Cooper employs about 1,300 in Lee County.
Anne Roman, a spokeswoman for Findlay, Ohio-based Cooper Tire, said, “I can tell you that Cooper is very pleased to be a part of the Tupelo community and that our team there does a great job making quality products. As for relocating our company headquarters from Findlay to Tupelo, we have no plans to do that.”
The package for Yokohama includes $70 million in bonds during the first stage for infrastructure, jobs training and land purchase.
Three additional installments of bonds totaling $60 million are planned with a commitment of 500 jobs for each installment.
The incentive package also would include income tax breaks on its employees for at least 20 years and local property tax breaks.
The local governments, the Tennessee Valley Authority and the Appalachian Regional Commission also are providing incentives to entice the manufacturer to Clay County. Clay County is issuing nearly $12 million in bonds for the project.
Gelston said the company is committed to an annual salary of $35,000 and will invest $1.2 billion in the plant.
In later phases, Yokohama said it would make passenger and truck tires. The company now makes passenger tires in Salem, Va., and it makes truck and bus tires in a joint venture plant with Continental Tire in Mount Vernon, Ill. It also imports tires to the U.S. from Japan and Thailand.
David Rumbarger, president and CEO of the Tupelo-based Community Development Foundation, said Yokohama should not be viewed as a threat to Cooper Tire.
“We’ve wanted to develop an automotive corridor in the area – Cooper Tire was first, Toyota is here, suppliers are here. … this is good for all of Mississippi,” he said. “A skilled workforce is what manufacturers are looking for, and this adds to that.”
Smith said studies indicate the state “would be in the black” on the investment within two years of the start of operation. During a 20-year period, MDA said the plant will provide the state general fund $1.1 billion.
Sen. Angela Turner, D-West Point, said since Sara Lee closed its Bryan Foods meat processing plant, Clay County has perennially been near the top in the state in unemployment.
She said the plant would be a major project for not only Clay County, but also for the state.
Mississippi’s March unemployment rate of 9.4 percent is among the highest in the nation. Clay County’s 18.4 percent jobless rate was the highest in the state.
MDA Executive Director Brent Christensen, who traveled to Japan three times to meet with company officials, said about 3,000 communities were involved in the initial recruitment of the company.
Officials said the fact Clay County had an industrial site ready and could handle a company with a high demand for water and the ability to dispose of wastewater made the area an attractive site.
In a statement Thursday, Yokohama said the new plant was needed “to accommodate the increasingly growing demand for its brand and further strengthen a system aimed at ‘local production for local consumption.’”
Daily Journal Business Editor Dennis Seid contributed to this report.