Korean conglomerate to buy Mitsubishi plant, create 410 Memphis jobs

The Korean company Hyosung Heavy Industries Corp. will  buy the Memphis power-transformer plant that Mitsubishi plans to close next month, hire 410 people and manufacture a different kind of transformer, company officials announced with Tennessee Gov. Bill Lee on Friday, Dec. 13.

The company will pay Mitsubishi $25 million for the 418,826-square-foot building on 73 acres and another $21.5 million for the personal property, according to EDGE Board information released later Friday.

Soon after the transaction is finished, Hyosung Heavy Industries will invest $40 million retrofitting and making upgrades at 2865 Riverport for the type of transformers it makes, Hyosung senior vice president Sunghoon Ahn said.

But over the next seven years the investment is to grow to $86.9 million total, according to state officials.

The company plans to hire as many of the remaining Mitsubishi workers – about 160 as of November – as it can, officials said.

The jobs will pay an average of just over $23 an hour, Lee said during a press event hosted Downtown by the Greater Memphis Chamber.

Mitsubishi’s transformer sales had been sluggish, but Hyosung makes a smaller type. Its transformers – known as “core form” – have a simpler design and are less expensive. The windings, or coils, surround the core.

Mitsubishi has been making a larger transformer – a “shell form” that is much heavier and more expensive. The core surrounds the windings.

Core form transformers dominate the market, commanding more than 90% of sales, Ahn indicated.

The core form transformers that Hyosung will manufacture in Memphis will be sold across the world.

Hyosung Heavy Industries is a division of Seoul, South Korea-based Hyosung Corp., a conglomerate that operates in the industrial chemical, machinery and construction markets.

Mitsubishi Electric Power Products informed the state in November that it plans to close the Memphis plant between Jan. 3 and Jan. 31.

But the general manager also told The Daily Memphian last month that the company was negotiating a sale that could save many of the jobs.

“They considered multiple states and multiple sites,” Lee told reporters Friday. “And we had a lot of conversation with them about why we felt like this facility was perfect for their manufacturing operation and why this city and this county was the right spot to locate for the jobs that they were going to be bringing.”

The amount of incentives the state plans to provide for the project “will be made public as they are finalized,” Lee said.

The governor went on one of four trips state officials took to South Korea in pursuit of the deal over the past two years, said Bob Rolfe, Tennessee Department of Economic and Community Development commissioner.

Memphis Mayor Jim Strickland said the deal reflects the city’s “grit.”

“The plant could have closed and we would have zero jobs and a piece of property that wasn’t productive,” Strickland said. “This is sort of like the phoenix coming out of the ashes …

“The plant is good quality,” Strickland said. “Our workforce is good. Mitsubishi was very high on the quality of our workforce. The workforce wasn’t a problem. It was the market for the product they were making. That helped. I think the governor’s personal involvement in going to Korea helped tremendously. We’ve been working on it a long time.”

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