Planning $175M investment in Spartanburg, Greenville counties, Michelin seeks to renew tax breaks

Herald-Journal (Spartanburg, SC)

Nov. 17--Michelin North America is planning to invest up to $175 million in equipment and machinery in Spartanburg and Greenville counties over the next five to seven years.

Headquartered in Greenville, the tire maker is seeking to update its 25-year tax break agreements with both counties, which date back to 1996.

"We are committing to invest $75 million in our Spartanburg County facilities for equipment and machinery throughout the next five years, consistent with our commitment to accelerating advanced manufacturing in our state," Michelin spokeswoman Megan Bagwell said.

Michelin is also seeking to revise its tax agreements with Greenville County, where it plans to invest $100 million at its facilities over the next seven years.

Industries refer to advanced manufacturing as the use of technology to make production more efficient, improve quality, and speed up the product's time to market.

On Monday, Spartanburg County Council approved the second of three readings for a new fee-in-lieu-of-tax agreement. By agreeing to invest $75 million over the next five years, Michelin will continue to receive a reduced property tax rate of 6 percent. The agreement takes effect upon the third approval, which is expected next month.

Without such an agreement, the standard property tax rate for manufacturers in South Carolina is 10.5 percent.

Councilman Whitney Farr, who has consistently voted against tax breaks for companies, was the lone opponent of Michelin's tax breaks Monday.

Farr has previously questioned the fairness of giving larger companies tax breaks when many smaller ones do not.

On Tuesday, Farr declined to comment on his no vote.

"I'd rather just leave it as it is," he said.

Farr, a Republican who has served one term on council representing District 4, was defeated by Justin McCorkle in the recent election. McCorkle will be seated in January.

Although no new jobs are promised in the Spartanburg County agreement, Michelin has been seeking to fill 50 new positions at its truck tire production facility on International Drive, ranging from production operators to forklift operators, with pay starting at $14 an hour plus benefits.

Michelin employs more than 9,700 workers in South Carolina, with more than 1,100 workers at the truck tire production facility and an additional 350 at its recently opened 3.3 million square-foot distribution center near Woodruff in southwestern Spartanburg County.

In Greenville County, the company employs more than 4,400 at its facilities and North American headquarters, according to Michelin's website.

Michelin's presence in Spartanburg County dates back to 1977 when the company announced it was building a tire plant to complement its Greenville auto tire plant and rubber compound plant in Anderson, according to longtime Spartanburg County Councilman David Britt, who is chairman of the county's economic development committee.

At that time, textile plants generated most of the local jobs. But as those plants began closing in the 1990s, manufacturers like Michelin and BMW became the area's largest employers.

"They came here when textiles were still riding high and they were not necessarily greeted with open arms throughout the Upstate," Britt said of Michelin. "This was an explosion of opportunity for Spartanburg County -- a $100-plus million plant along with 1,500 new jobs.

"In hindsight, this decision by Michelin to build their U.S. manufacturing facilities in the Upstate and Spartanburg County, in particular, could have been the very thing that made BMW, 15 years later, take notice of the Upstate of South Carolina when they began their search for their first manufacturing facility outside of Germany.

According to the S.C. Department of Commerce, South Carolina leads the nation in the export sales of tires and passenger vehicles.

"All you have to do is look at Spartanburg County and see where we are now compared to 1990. We lost over 20,000 jobs when the textile industry evaporated before our eyes, and now we have added over 75,000 new jobs with $18 billion invested in our county just in the past 25 years," Britt added.

Also Monday, Spartanburg County Council approved tax break agreements for three other companies planning large investments. Farr, again, was the lone council member to oppose the tax breaks.

IGP North America at 1880 Campton Road in Inman is planning to invest $7.1 million and create 40 jobs in a plant expansion and modernization, according to its tax agreement. Headquartered in Switzerland, IGP makes environmentally friendly powder coatings for many everyday items made of steel or aluminum.

Milliken & Company is planning to invest $25 million at its Dewey, Keystone and Tyger Lake facilities and the Roger Milliken Center.

Headquartered in Spartanburg County with locations worldwide, Milliken specializes in research, design and manufacturing, including floor covering, performance and protective textiles, specialty chemicals, health care, and operational excellence consulting for industrial manufacturers.

Adidas America Inc. is planning to invest $15.1 million at its Cedar Crest Road facility. The Oregon-based company distributes apparel, footwear, equipment and accessories from its Spartanburg facility.

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