published Saturday, August 10th, 2013

Mohawk Industries worries new coal rules could slow job growth

About the plant:

* Where: Summerville, Ga.

* What: Mohawk’s recycling center, among the biggest in the U.S.

* How big: 600,000 square feet

* Employees: 250, with 400 more on the way

* How much recycling: 1.5 billion bottles in 2012

* What happens to the bottles: Transformed into 110 million pounds of carpet and carpeting material by end of 2013

SUMMERVILLE, Ga. -- Mohawk Industries on Friday asked Sen. Johnny Isakson, R-Ga., to help stop regulations that would make energy more expensive at the flooring manufacturer's Summerville recycling center.

Higher energy costs resulting from new anti-coal rules could slow job growth, the company warned.

"We're probably the largest user of electricity north of Atlanta," said Joe Yarbrough, senior vice president for advanced manufacturing engineering at Mohawk.

Calhoun, Ga.-based Mohawk Industries has pledged to invest $180 million and hire 500 workers in the next four years at its Summerville recycling center, which transforms used plastic bottles into the material needed to make carpet fibers and carpet backing. Mohawk, the world's biggest flooring manufacturer, already has hired 100 workers, and will complete its $180 million investment by the end of 2014, the company said.

But officials worry that Washington, D.C. politics could slow down North Georgia's nascant revovery.

"With the uncertainty with regulation and some of this tax reform, it's really important to us to know that we can invest in the kind of jobs we're creating here," Yarbrough said.

Isakson said that while there's a possibility that lawmakers could lower the corporate tax rate and eliminate the myriad of loopholes, environmental regulation and health legislation could continue to challenge employers.

"Government needs to be partner with business, it doesn't need to over-regulate business to the point that it can't do business," Isakson said.

However, "[President Barack Obama] hasn't lost his enthusiasm or appetite for a carbon tax," he warned, noting that electricity could become much more expensive as a result. "We're losing 15 Georgia Power facilities because the economics to clean emissions are too much to justify the revenue from electricity."

Reporters were not allowed inside Mohawk's state-of-the-art recycling plant, which is still under construction. As Isakson arrived, builders worked to complete one of the facility's newest buildings, which is adorned with gleaming ductwork and freshly-painted storage towers. Such a sight is rare in North Georgia, which has seen far more plant closings than openings in recent years.

The 600,000-square-foot plant recycled 1.5 billion bottles in 2012, and will produce 110 million pounds of carpet material through the end of 2013, said Chris Craig, director of fiber manufaturing for Mohawk. Using recycled material helps Mohawk save money on its raw materials costs, which are tied to the price of petroleum and its derivitives, like polyester and nylon.

"We're one of the largest recyclers of bottles in North America," said Craig, one of 250 employees who currently work at the growing site.

Mohawk bought the site in 1999 from Image Industries, part of an non-stop expansion that has continued unabated through the recession, as the flooring giant bought or built plants overseas and acquired rivals in sectors where it wasn't No. 1.

Isakson said lawmakers also want to streamline the process for companies like Mohawk that make money overseas, making it more attractive for them to bring that cash back to the U.S. instead of leaving it on foreign shores to avoid the high corporate tax rate in their home country.

"We created a market for Cayman Islands with a convoluted tax code," Isakson said. "We need to fix the tax code and the money would come flooding back in."

-- Contact staff writer Ellis Smith at esmith@timesfreepress, or 423-757-6315

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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