Michelin sells steel cord plant
Michelin North America Inc. and Hyosung America Inc., an affiliate of Hyosung Corr., have signed an agreement under which Hyosung will purchase Michelin’s steel cord facility in Scottsburg, Ind.
The facility, American Steel Cord with 220 employees, produces steel cord used in tire manufacturing. The financial terms of the agreement were not disclosed.
The agreement includes a 10-year supply contract whereby Michelin will purchase steel cord from Hyosung. The supply contract is valued at $650 million over the 10-year term of the contract. Hyosung expects to begin operating the Scottsburg facility in August.
Under the terms of the agreement, Hyosung will offer employment to all current Scottsburg employees. According to Terry Swanner, vice president of Hyosung’s North American operations, Hyosung will maintain a comparable employee compensation package.
“We have a successful track record with Hyosung that makes us confident that this is the right decision for all concerned,” said Jim Micali, chairman and president, Michelin North America Inc. “In November 2002, Hyosung purchased our textile cord facility in Scottsville, Va. That transaction proved to be a win-win for Michelin, Hyosung and the employees. We’re looking forward to a similarly smooth transition with American Steel Cord.”