Nokian Tyres Building Plant In Tennessee, But No Plans To Move Colchester Headquarters

May 10, 2017

Nokian Tyres recently announced plans to build a plant in Tennessee, but Tommi Heinonen – head of Nokian Tyres North America – says there are no plans at the moment to move the company's North American headquarters out of Vermont.

Since 2008, Colchester has been home to the North American headquarters of the Finnish tire company, which is one of the 20 largest tire companies in the world.

"We have in Vermont, right now, 115 people working for us," Heinonen told Vermont Edition recently. "And there is all kind of administration – there is marketing, finance, logistics."

In addition to administrative offices, there's also a tire warehouse on the Colchester premises.

"This is our 'mother ship' in North America," Heinonen says. "So this is our biggest warehouse in North America."

He adds that the company has five other North American warehouse locations, but the Vermont warehouse holds around 350,000 passenger car tires.

While some tires are just stacked in piles, some are stored using a method called "lacing or weavings," Heinonen explains, as a way to maximize the storage space.

The Nokian Tyres warehouse in Colchester holds around 350,000 tires, where some are strategically stored in a "lacing" pattern to maximize the space, says Tommi Heinonen, head of Nokian Tyres North America.
Credit Meg Malone / VPR

The new plant  in Tennessee will be Nokian Tyres' first North American factory. It has been in the works for a couple of years, Heinonen explains, and he says a few reasons contributed to the decision to build a U.S. factory.

"Logistics is, of course, one of those," Heinonen says. "Right now, we are importing our tires from Europe and there is a duty on those tires. And also logistics costs, freights, are astronomical – because everybody understands when you put tires into containers, you are actually moving a lot of air in that container because there is no efficient way to pile tires. So our logistics costs are remarkable right now."

As far as basing it in Tennessee, Heinonen says the company was looking to go south and be in closer proximity to a larger population. But when asked about the possibility of the headquarters moving to Tennessee, Heinonen says "there are no such plans right now."

While Vermonters may be most familiar with Nokian's winter tires, like the "Hakkapeliitta," Heinonen says that the company continues to look beyond that for growth.

"There's a limit to where we can grow in winter tires because it's only [a] small portion of the North American market ... And we have already quite a remarkable share of that," he says.

Heinonen adds that all-season tires and light truck tires are two areas with growth potential.

A pillar of President Donald Trump’s political campaign was bringing manufacturing back to the United States, however Heinonen says Nokian Tyres' decision to build the Tennessee plant "has nothing to do with the U.S. politics." He again cites that this plan was in the works for the past couple of years, and that it stems from a desire to take advantage of the large North American market.

Listen to the conversation above. Broadcast on Vermont Edition on Wednesday, May 10, 2017.