South Korean firm is in talks to invest $300 million at plant
Caterpillar is leaving
By Timothy W. Martin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the US print
edition of The Wall Street Journal (June 23, 2017).
SEOUL -- Samsung Electronics Co. is in late-stage discussions to
invest about $300 million to expand its U.S. production facilities
at a factory soon to be vacated by Caterpillar Inc., according to
people familiar with the matter, with an announcement expected as
early as next week.
The facility eyed by Samsung is in Newberry, S.C., a town
located about 150 miles northwest of the port of Charleston, the
people said, with plans to shift over some production of oven
ranges made currently in Mexico. The investment could generate
around 500 jobs, and though the start date is unclear, production
would likely begin next year, the people said.
Samsung could eventually ramp up U.S. manufacturing of
refrigerators, washers, dryers and other home appliances in
subsequent years, the people said. Final details over incentives
and other matters are still being hammered out between Samsung and
South Carolina officials, the people said. Though unlikely, it is
still possible for either party to walk away from the pact, the
people said.
The timing of the announcement could still change, the people
said. But South Korea's newly-elected President Moon Jae-in is
scheduled to meet U.S. President Donald Trump for the first time
next week in Washington.
A Samsung spokeswoman declined to comment.
Samsung's interest in a U.S. factory was influenced by the
election of Mr. Trump, who vowed on the campaign trail to bring
more manufacturing jobs back into the country, The Wall Street
Journal reported in March.
Mr. Trump's reshoring mantra brought promises from Asian
billionaires such as SoftBank Group's Masayoshi Son and Foxconn
Technology's Terry Gou. Foxconn, the assembler of iPhones and other
electronics, said Thursday it was considering seven states in the
American heartland to invest $10 billion or more in factories.
Samsung's crosstown rival LG Electronics Inc. said in February
it planned to build a new factory for washing machines in
Tennessee, its first major U.S. plant.
Samsung had previously said that it started reviewing U.S.
options in the early fall last year, meaning before Mr. Trump's
victory in November. At least five states were under consideration
at the time, the Journal reported.
In recent weeks, state officials from South Carolina and Alabama
traveled to South Korea to pitch their sites and incentive packages
to Samsung, with the Newberry facility emerging as the leader, the
people said. The two states had courted Samsung officials for
months, including in high-level discussions at a Republican
Governors Association event this spring, two of the people
said.
The South Korean electronics giant, the world's largest
manufacturer of smartphones, memory chips and televisions, had
initially looked at a site near Blythewood, S.C., but another
company landed the facility, two of the people said.
Samsung had told state officials that it preferred moving into a
pre-existing facility, rather than building a new factory,
according to people familiar with discussions.
A team of Samsung officials visited the Newberry site, which is
located near Interstate 26, a freeway that feeds directly into the
port of Charleston, according to two people familiar with the
matter.
Caterpillar said last year that it would close the Newberry
facility, a packaging plant for electric generators, with 325 jobs,
and eventually shift those positions to other U.S. locations.
Samsung has invested heavily in the U.S. over the years, making
it one of the country's largest direct foreign investors. In
November, just days before Mr. Trump's election, Samsung said it
would invest more than $1 billion in its Austin, Texas
semiconductor factory to boost production of processor chips for
smartphones and other devices.
Samsung's consumer-electronics unit represented nearly
one-fourth of the company's annual revenue last year of 201.9
trillion South Korean won ($176.8 billion). But the unit, which
makes refrigerators, ovens, televisions and other home appliances,
brings in less than 10% of overall operating profit.
In April, Samsung notched its highest quarterly profit in more
than three years, powered by strong sales of components like memory
chips and display panels.
Write to Timothy W. Martin at timothy.martin@wsj.com
(END) Dow Jones Newswires
June 23, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Caterpillar (NYSE:CAT)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Caterpillar (NYSE:CAT)
Historical Stock Chart
Von Jul 2023 bis Jul 2024