Inside Hankook Tire: A Really Long Trip for a Very Short Answer

By Jacob Brown | April 19, 2012
Weeks before I set off for Hankook Tire’s development and manufacturing facilities in South Korea, Automotive.com’s biggest kahuna, Angus MacKenzie, discussed the importance of tires with me from his Australian point of view. During our dinnertime conversation, he explained the difference between U.S. and international consumers when it comes to tires as only he could. "Typically, Americans couldn’t care less about tires," he said. "They just want something that will go 60-, 80-, or even 100,000 miles. They don’t believe tires are actually supposed to grip the road." Paragraphimage [caption id="attachment_90193" align="alignright" width="300" caption="Hankook's Geumsan tire plant, located south of Seoul, is one the company's six tire plants around the world."][/caption] With his insight in mind, Hankook then flew me 5900 miles across the Pacific Ocean to South Korea, a country about which most Westerners know little besides its massive consumer electronics industry and a loose-cannon dictatorship to its north. My destination: Hankook's manufacturing facilities. As the world's seventh-largest tire maker and a Korean industrial powerhouse, Hankook makes 67,000 different kinds of tires for cars, trucks, and industrial vehicles. The tire maker has said it's on a mission to change Americans’ mindsets about the only part of a car that's actually designed to touch the road. The trip to South Korea became a quest for me to find out how tires are made and why customers should care about what goes on their cars, trucks, and SUVs. Executives from the Hankook explained it like this: Trends show that Europeans and Asians—especially Japanese consumers—take a certain amount of pride in tire shopping for their cars. They said Europeans are concerned with road feel, and their home-market Korean customers value a pillowy soft ride over their roads. As for North American customers—and there’s no way around saying this—most of us are cheapskates. We wouldn’t care if our cars rode on stone blocks as long as we got a good deal for them. Hankook vice president and CFO Cho Hyun Bum wants to change that. The 41-year-old American-educated executive said he wants to make Hankook part of American lexicon. Cho said there’s foothold for Hankook's business in the U.S. to exponentially take off, and he believes Hankook is close to finding it. "I’m sure that in time we will be in a high position in the U.S. and also all over the world," he said. Paragraphimage Education is Key [caption id="attachment_90195" align="alignright" width="200" caption="Hankook Tire CFO Cho Hyun Bum says the manufacturer is on the cusp of finding its niche in the U.S."][/caption] As explained by Cho, the chief difference in tire consumers from continent to continent stems from education, or the lack thereof. Part of why Japanese consumers are so fervent about tire selection is because they've been educated for "decades and decades" from manufacturer-owned distributors. Europeans and Koreans have also been taught what to look for from stores that sell brands under their own banner. American consumers have largely been left to their own devices, whether shopping at a mom and pop shop or in a big-chain automotive department. Over time, the lack of person-to-person marketing promoted a lack of interest for U.S. consumers, other than how much a tire costs. The information rift comes at a time when there are probably the starkest differences in products and processes from manufacturer to manufacturer that there have ever been, leaving most customers to make less-than-informed decisions that cost them hundreds of dollars. Speaking with Cho and the engineers that contribute to helping build Hankook tire into a global brand, it became clear that tires aren’t like toothpaste. Tires mostly look the same, but Hankook, like other tire makers, has plenty of trade secrets for making its products. From the materials used to make them to the testing that goes into ensuring their quality, thousands of factors go into them to get them from the drawing board to your car. What Do Tires Do? It's easy enough to say that a tire is wrapped around a wheel and connects the moving parts of your car to the road. But that would be similar to saying an iPhone makes phone calls. Tires come in all different sizes, densities, patterns for different purposes and price points. All tires share commonalities in what they're made of: natural and synthetic rubber to compose most of the structure; carbon black as a bonding agent for the rubber and an aid for traction; steel or fiberglass strands to help the tire keep its shape; and most recently, silica. The last material, used in everything from sandcastles to Taco Bell's ground beef, is an expensive but increasingly more important element in making a better tire. Paragraphimage [caption id="attachment_90227" align="alignright" width="199" caption="Tires roll down the assembly line at Hankook's Geumsan plant."][/caption] Initially, silica was used almost exclusively in high-performance tires for sports cars to help balance the sticky properties of grippy tires with reduced friction for quicker response and handling. However, with the need for greater fuel efficiency, silica has found a new purpose with low rolling resistance tires commonly found on electric and hybrid cars. Budget tires, by comparison, contain little of this high-tech stuff. Few contain much, if any, silica. There's also less widespread use of natural rubber, and more reliance on lightweight materials like fiberglass and even Kevlar. Harder synthetic rubber in budget tires has often been cited in maintaining a tire's longevity, but it's usually at the cost of on-road control, handling in emergency situations, road noise, and vibrations felt during driving. Hankook took particular pride in showing us its Optimo H426 touring tire, which serves as original equipment on some Fords, Hyundais, Kias, Lincolns, and Volkswagens. Comparatively speaking, the Optimo H426 uses more silica than what most other manufacturers use in similar tires, also adding to cost and complexity. Hankook spokespeople said the process for mixing tires rich in silica is more complicated, but it's what the company has to do to gain some advantage, slowly chipping away at the market share maintained by more-established players. Hankook also tests thousands of simulated hours, both in the virtual and real-world situations, to make sure its products are up to snuff. In what the company calls "stiffness control contour theory design," Hankook subjects tires to testing at high speeds to the point where engineers say a tire’s profile can expand almost an inch due to heat and pressure. Putting Tires to the Test We had the opportunity to discover how the tires worked, firsthand, as engineer Choi Seung Pil got behind the wheel of a BMW 528i equipped with Hankook Ventus V12 Evo high-performance tires. As Hankook manufactures tires under its own label at basic to premium price points, as well as private label brands, it maintains a fleet of cars it uses for testing, ranging from tiny subcompacts you'd never see in the U.S. to midsize and large sedans. Most cars are pushed so hard that they rarely make it past 13,000 miles of use. Off to the side of its track behind a fence, we saw a handful of cars with their roofs caved in, clearly showing the testing engineers took their jobs seriously. Paragraphimage [caption id="attachment_90183" align="alignright" width="300" caption="Hankook engineer Choi Seung Pil logs 500 miles a day around test tracks to evaluate tires."][/caption] Choi says drives up to 500 miles a day on road surfaces that are cobbled in some places, potholed in others, and look remarkably like the grooved, concrete highways of Los Angeles in others still. It's all in the name of making sure tires respond well to whatever environment they're sold in. On our ride with him, he took us through simulated ice- and rain-covered surfaces, as well as several of Hankook's other environments—26 in all—spanning more than 50 acres. Choi goes through the same motions he's been going through for the last 25 years or so, not even so much as flinching with a car full of passengers who are hanging on for dear life. On most days, he doesn’t have an audience, but his tasks remain the same: Conveying his findings to development engineers to tweak products for wide-scale production, mostly devoid of expensive electronic testing equipment. "I work with all sorts of cars," Choi says through a translator. "Steering and stability feeling just become second nature." Each tire has its own objectives. High-performance tires are designed to keep hold of the road, low-friction rubber maintains better fuel efficiency, snow tires are tested in slick environments, and durability and performance must live up to the expectations of both Hankook and the customers buying them. Futuristic Manufacturing When you go to a tire plant, you expect to see a gritty blue-collar plant filled with people in every crevice of space. When we reached Hankook’s Geumsan Plant No. 3, we were surprised to find that wasn’t the case. In fact, it was quite the opposite, eerie in how much high-tech machinery kept tires moving from station to station with laser-guided robots and relatively few people at each helm. Paragraphimage [caption id="attachment_90225" align="alignright" width="300" caption="Despite laser-guided sensors to check a tire's integrity, every tire that leaves the plant is still checked by hand."][/caption] Spanning more than 9 million square feet between four giant square plants that make up the Geumsan facility, Hankook employs around 300 people per plant. But most are paired between two or three automated machines, laying rubber ply over a carcass belt drum or monitoring machines. That rubber is then run through a steam injection molding press, curing what finally resembles a tire at 352 degrees for 12 minutes. Tires are then visually inspected before they’re handed off to even more machines and sensors that check their integrity. They get ratings of A, B, or C; the top-rated rubber gets handed off from its sensor-laden conveyor belt to storage racks before getting shipped out. B-rated tires get remolded, and C tires are shredded and discarded. Because of the quality assurance in place, Hankook estimates that just 0.0001 percent of the tires it makes ever meet the giant scrapyard in the sky instead of being exported to some 180 countries around the world. You, Your Car, and a Tire Maker Hankook Tire walked us through its plants, giving us a week's worth of dog and pony show to let us in on a little secret: It's rapidly expanding. The company just finished an addition to its plant in Hungary late last year, broke ground on a plant in Indonesia, and recently began building its third plant in China. In 2011, the tire maker posted its biggest ever sales year in the U.S., bolstered largely by its premium ultra-high-performance Ventus line. But Hankook didn’t always have the same luck in the U.S. Despite its 71-year history, it was instead relegated to mostly making spare tires for automakers up through the 1990s. Then in 1997, Ford contracted Hankook to be a supplier for the Ford F-150. Paragraphimage [caption id="attachment_90181" align="alignright" width="300" caption="A Kia Rio laps Hankook Tire's G'Trac testing facility in Geumsan, South Korea."][/caption] "They actually asked us to erase the brand 'Hankook'" from the tires to be supplied to Ford, says Hankook’s Cho Hyun Bum. "We said 'No way.' "We struck a deal for a very cheap price," he added. "So we were subsidizing like crazy just to get into that." Since then, Hankook has fought a budget-brand stigma because it has usually sold with little brand recognition and a discounted price compared to rivals. All the while, Hankook has been busy winning consumer satisfaction surveys, contracts, and advertising deals that have allowed it to spread its presence in major sporting venues throughout the U.S. As Cho explained with reference to companies like Apple, or even home-grown power players like Samsung and Hyundai, "Once it’s been implanted in your head that something’s a good brand, it’s very hard to erase." We probably didn’t have to travel 5900 miles across the International Dateline to figure out that good marketing for a lesser-known product goes a long way. We also didn’t need the flight over to see how tires are made or how they operate in various conditions. However, seeing the sights of a rapidly growing company, and experiencing its business practices firsthand—from the company’s openness to trying new ideas with its technology to its patience with a market very much unlike its own—gave us an appreciation for trying to get its products right the first time around. Hankook calls it "proactive tireship." Tires aren’t created equally. Hankook knows that, and it has focused its mission around educating consumers of that fact. It's a noble goal, and Hankook definitely seems to be on the right track. But it begs the question, can Hankook, still a relative unknown in the U.S., really make a name for itself against the likes of Goodyear, Michelin, Pirelli and other mainstream brands? Ask Hyundai.
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