BMW Expansion in South Carolina Makes State Auto Manufacturing Giant
BMW's Production Facility, Spartanburg, SC
BMW's production facility in Spartanburg, SC, opened in 1992 and now produces the X3, X5 and X6. BMW is investing $750 million on a 1.5 million-square-foot expansion of its Spartanburg operations – which will be larger than its first facility - to produce three models and increase production capacity to 240,000 units by 2012.
In 2008, BMW Manufacturing Co. announced plans to invest an additional $750 million in its Upstate South Carolina factory, adding 500 new jobs. The expansion – BMW’s largest single investment in a state where it has had a manufacturing presence since 1993 – will allow the automaker to produce three models and increase production capacity to 240,000 units by 2012.
The Spartanburg County facilities are BMW’s only assembly operations in North America. BMW’s massive expansion underscores the Palmetto State’s stature as a major center of the automotive industry. The project adds a new 1.5 million-square-foot plant to the company’s existing 2.5 million-square-foot Spartanburg County campus, including a 300,000-square-foot expansion of the paint shop.
The new facilities, which opened in October 2010, increased BMW’s overall investment to $4.6 billion in Spartanburg County, where more than 7,000 people work for the company. The opening came as the company launched the next-generation BMW X3 Sports Activity Vehicle, which will be made exclusively in South Carolina and sold around the globe.
BMW’s expansion of its Spartanburg County site is larger than its first facility, enabling the company to increase production capacity from 160,000 to 240,000 units by 2012, says Max Metcalf, manager of communications for BMW Manufacturing. The German company initially chose South Carolina because of its superior transportation infrastructure, which includes an interstate highway system with close proximity to international airports and the Port of Charleston.
The availability of a deep-water port was a huge benefit for BMW, as was the state’s skilled workforce. “The boost in the production capacity at BMW Manufacturing will positively impact the logistics, supplier and distribution networks that support the manufacturing processes,” said Josef Kerscher, president of BMW Manufacturing.
Kerscher says existing supplier companies will ramp up operations to provide automotive parts for the higher production levels, doubling parts container traffic and significantly increasing exports through the Port of Charleston.
With the opening of its new facility, BMW will export the X3, X5 and X6 worldwide from South Carolina. In 2009, South Carolina exports of motor cars and vehicles worldwide totaled more than $4 billion.
South Carolina economic development leaders see the BMW expansion as a job-generating machine that will draw new automotive-
related suppliers to the state and spur expansions at existing suppliers.
“BMW’s expansion in South Carolina will have a tremendous impact on the region and the entire state. We expect to see new suppliers come to the state and existing suppliers grow as a result of this announcement, and that means new jobs and lots of new supplier jobs all over South Carolina,” says Joe Taylor, South Carolina Secretary of Commerce.
Workforce Lures Business
Laying the groundwork for that expansion were state efforts to further enhance a business-friendly climate, commit the resources to develop a deep pool of highly skilled workers and maximize the state’s world-class port and other transportation assets.
“The automotive industry is constantly evolving, so BMW always needs a well-educated and talented labor pool from which to draw. South Carolina has shown an exceptional commitment to working with us on creating programs that provide the necessary skills for the best and brightest to succeed and grow with BMW,” says Robert Hitt, department manager, corporate affairs for BMW Manufacturing.
Automotive-related manufacturing employs more than 30,000 people in South Carolina, a state that includes operations for companies such as Michelin North America, Bridgestone Americas Tire Operations, Robert Bosch, Daimler AG, American LaFrance, Honda South Carolina and Caterpillar. These investments have increased the proliferation of hundreds of component manufacturers and suppliers in the state to serve them.
“BMW really put us on the map, and today we have nine original equipment manufacturers (OEMs),” says Jack Ellenberg, deputy secretary for new investment at the Department of Commerce. “We also have well over 250 companies in the state supporting the automotive industry – with at least one supplier in 38 of our 46 counties. They don’t just serve the OEMs in South Carolina, but their presence has also helped attract Mercedes and Volkswagen to the Southeast.”
In 2009 alone, South Carolina companies announced more than $286 million in new capital investment and 1,852 new jobs from automotive industry projects.
Michelin North America, which has had manufacturing operations in the state since 1973 and its headquarters in Greenville since 1984, produces tires in six of its 12 facilities throughout the state, employing about 7,800 people, says Steve Evered, Michelin’s director of government affairs.
Like BMW, one of the factors that attracted Michelin to South Carolina was the Port of Charleston, where Michelin ships its tires made in the state to customers around the world.
“It remains a key ingredient to our continued development and growth within the state,” Evered says.
Moreover, South Carolina has a strong technical college system, providing Michelin with a proficient workforce, and it is a Right to Work state that enables the company to pay competitive wages, Evered says. “We also have strong relationships with the local and state governments, which have been very supportive to businesses over the years,” Evered says. “That enables us to continue investing in the state.”