GROWTH IN SALEM . . . YOKOHAMA TO EXPAND TIRE PLANT

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 2, 1993                   TAG: 9302020047
SECTION: BUSINESS                    PAGE: A3   EDITION: METRO 
SOURCE: GEORGE KEGLEY STAFF WRITER
DATELINE:                                 LENGTH: Medium
GROWTH IN SALEM . . . YOKOHAMA TO EXPAND TIRE PLANT
Yokohama Tire Corp. on Monday announced a $33 million expansion, the second phase of a proposed $200 million project that's expected to continue hiring at the Salem factory.
Unlike many companies that have announced downsizing plans, Yokohama is continuing its long-term plant growth with a program planned for full economic recovery in the future, said Yoshimichi Hanabusa, Yokohama president.
Less than half of the $33 million will be spent to build a 150,000-square-foot addition, which will enlarge the Salem plant about 30 percent to 580,000 square feet, making it one of the largest factories in the Roanoke Valley.
The rest of the money would be spent for equipment. Work will start this spring and construction should take about a year, he said.
Yokohama makes more than 20,000 tires a day in Salem. It plans to increase its production more than 17 percent this year in both the replacement and new-car tire markets. Yokohama expects to make 5.4 million tires in Salem in 1993, up from 4.6 million in 1992.
Hanabusa declined to specify any employment gains from the expansion. The Japanese-owned company will add "a few jobs" in the first step of its second-phase expansion, he said.
In the past year, Yokohama has hired about 100 people, increasing its work force to a record 790, Hanabusa said in a telephone interview from the company's Fullerton, Calif., headquarters.
More than 3,000 people have applied for jobs at the Salem tire plant, mainly because of its high pay, which averages more than $15 an hour.
Hanabusa said he hopes the economy is turning around from the recession. Investment should be made ahead of time in order to be ready for business growth when it comes, he said.
In the equipment portion of the expenditure, "we are aiming for the leading edge of technology, to become one of the most modern passenger tire factories," he said.
Yokohama completed the $80 million first phase of its long-term expansion in Salem during the third quarter of 1992. With the $33 million announced Monday, the company will have spent $113 million, or well over half of the $200 million it proposed investing there by the mid-1990s.
The plan is to double its production to 10 million tires a year after it doubles the capacity of the Salem plant, which supplies 70 percent of the Yokohama-brand passenger tires sold in the U.S.
The new investment "will position us to meet diversifying industry demands, including increased interest in fuel-efficient tires for both the original-equipment and replacement markets," he said.
Yokohama Tire formerly was Mohawk Rubber Co. In July the company merged its U.S. sales subsidiary with Mohawk, its manufacturing and sales arm.

by Archana Subramaniam by CNB