Spartanburg takes a look back at landing BMW

jason.spencer@shj.comJuly 13, 2014 

AP FILE PHOTO

— It's hard to imagine Spartanburg County, or South Carolina for that matter, without BMW.

The manufacturer is directly credited with quadrupling the automotive industry in this state since the first car rolled off the line 20 years ago. Today, that sector encompasses about 250 companies and 46,000 employees in South Carolina, spread out across 38 of the state's 46 counties.

"It's Official," proclaimed a 20-page Herald-Journal special report on June 24, 1992, with the BMW logo inside of the "O." The cover featured then-Gov. Carroll Campbell getting inside a red BMW with South Carolina tags that stated simply "BMW 1." Stories looked at the arduous process of landing the company, how the announcement could change Greer and the surrounding area, and a plea for patience to eager workers who would need to wait for the facility to be constructed. Several advertisements contained welcome messages, sometimes in German. The newspaper's welcome ad called it "A New Beginning."

The celebration was long awaited and hard-earned.

Landing the company involved more than three years of secret, and sometimes surprise, meetings between state and local officials and BMW leadership; the serendipity of the Greenville-Spartanburg International Airport's location near large swaths of sparsely developed land; a mad dash to acquire hundreds of acres from home and property owners; and offering millions in incentives, some of which had never been used.

The stories of the tense times and occasional bumps in the road that led BMW here are the stuff of local legend. Anyone involved in the courtship will tell you how the company's leadership had been eyeing a site in Anderson County — they flew in and out of GSP when visiting — only to one day look out of the airplane window and ask, "What about that land right there?"

Being close to an airport was important, as it would save BMW the costs of transporting its product along the highway. Being close to the Atlantic Ocean helped, too — the last two sites competing for BMW were in Spartanburg and Omaha, Neb. And over the course of the last 20 years, the extra hours of flight time to and from Germany would have quickly compounded had the plant landed in the American Midwest.

It was a time when the fax machine was the superior communication technology. The first steps in landing BMW began in 1989, a few months before the Berlin Wall fell. That's the year that introduced the Energizer Bunny and "The Simpsons" to mainstream America. Tim Burton's "Batman" was the top movie, and bands like New Kids on the Block and Milli Vanilli had No. 1 hits.

During the three-year courtship, the world would see Nelson Mandela freed from prison after more than 27 years, the Persian Gulf War, and the confirmation of Clarence Thomas to the U.S. Supreme Court, despite sexual harassment allegations by a former aide. America would witness the capture and trial of serial killer Jeffrey Dahmer and riots would break out in Los Angeles after the acquittal of four officers who had been accused of beating Rodney King.

Forming relationships

It started in 1989, when the State Development Board recruited Paul Foerster, a top executive at the Hoechst Celanese Corp. in Spartanburg who had been in line to become the next chairman of the Spartanburg Area Chamber of Commerce, to staff its newly reopened office in Munich, West Germany.

Initially, Foerster was charged with nurturing economic development contacts in central Europe, particularly his native Germany. As BMW's interest in building a plant in the United States became known, he faced the challenge of developing contacts among that company's leadership.

In 1990, Foerster found out about a meeting on the rebuilding of Germany's parliament in Berlin. From his contacts, he was reasonably sure executives from both Hoechst and BMW would be there. He attended the meeting, where he was able to introduce himself to BMW Chairman Eberhard von Kuenheim, to whom he had written some time before. Von Kuenheim told him, "I'll give you five minutes."

"I have dealt often enough with people of that level to know that when they say five minutes, they mean five minutes — and you are better off when you use four minutes than when you use six," Foerster said.

The chairman referred Foerster to Bernd Pischetsrieder, then BMW's head of production, who became his primary contact — and that relationship helped form the bedrock of subsequent dealings between South Carolina and the auto manufacturer.

During one hastily arranged trip, a funny thing happened on the way to the Frankfurt Airport.

Foerster always used the same car rental agency, and he always rented a BMW, complete with a car phone and other equipment. To his surprise, all the BMWs had been rented out; he was forced to settle on a Mercedes. In a recent interview, Foerster recounted his worry that driving something other than a BMW to meet with company executives would have been bad form.

His fears were unfounded, though, when his contact's secretary told him the Mercedes would make it easier for BMW officials to find him when he arrived.

But that attention to detail would prove invaluable to officials in South Carolina.

"He did a lot of excellent work in helping us understand what BMW's needs were," said Lane Fowler, then-chairman of the Spartanburg Area Chamber of Commerce.

Landing the deal

As with any major development in Spartanburg County for decades, textile magnate Roger Milliken played a role.

Milliken, who served as chairman of the Greenville-Spartanburg International Airport until his death in 2010, agreed to extend the airport's runway to meet BMW's needs. But Milliken did not approve of BMW's first choice of land in Spartanburg, which would have required the airport to sell off parcels that were designated for a future second runway.

Milliken also believed BMW's first choice would box the company in, limiting their options for future expansion. He suggested a site east of the airport, according to a Herald-Journal account at the time.

"He was a real asset. He talked to the chairman of the board of BMW constantly," Fowler said.

Fowler worked for Lockwood Greene, whose parent company long had an interest in BMW's next move in hopes of landing a design contract, according to a Herald-Journal account. Fowler was a key player in a two-hour, closed-door meeting with Gov. Campbell and Milliken at Wofford College.

Some of the land needed for BMW was occupied. But Campbell took a gamble that Spartanburg could deliver: "We didn't know whether we could do it or not, but we told them we could," he told the Herald-Journal in 1992.

Spartanburg businessman George Dean Johnson and Johnson Development Corp. President Foster Chapman had already been asked to help acquire the necessary land. After meeting with Milliken, Campbell called and told them to "go all the way to 101," Chapman said.

Chapman assembled a team of three real estate agents to acquire the land — Jim Bright, to handle commercial buildings; Doug Lancaster, a farm Realtor; and Jim Mayo, who focused on a housing subdivision — and got to work.

Chapman said much of the land was owned by the same family — the Davis family — and that he didn't want to approach them until after church on a Sunday, because he knew they would all start talking to one another.

It took three days to sign the first 90-day option on one of the pieces of property. Ninety-three days after the governor's request — the day the first options would expire — word came down that BMW had chosen Spartanburg, and the paperwork could be finalized.

"We cussed and screamed and yelled, and got yelled at and cussed at through parts of it," Chapman said. "But really, we had no idea, until they started funding on the 93rd day. But we were so busy that we didn't have too much time to worry about it, because we had to move on to the next property and the next."

He added: "I'm proud of what we paid for that property. We couldn't do that again if all the stars aligned."

A 1992 Herald-Journal article detailing the courtship of BMW indicates Campbell found out South Carolina would be home to BMW's first North American manufacturing plant at 8:55 on a Monday morning. And he found out by fax — a technology that had proven invaluable to the negotiations. The fax machines were on fire, too, soon afterward when the time arrived to finalize the paperwork on the land acquisitions.

"They were praising the technology that existed in 1992 — the fax machine. Without that, they couldn't get over here quick enough… to keep the options from expiring," said Spartanburg County Councilman David Britt, who was first elected in 1991.

Property owners were offered up to twice the value of their land, plus a set amount per square foot for any buildings. In all, 900 acres were acquired south and west of Highway 101 for about $36.6 million, paid for by the State Ports Authority and the state and county governments. A 1992 New York Times story focused on those families bore the headline, "Making millionaires of Southern farmers."

Options were signed on another 200-plus acres on the other side of 101, Chapman said. Much of that land would soon become part of the BMW campus, too.

Because of the scope of the acquisition — about 160 pieces of property were involved — the Spartanburg County Register of Deeds Office had to stay open on Saturdays and Sundays for about six weeks, Chapman said. The property included a dairy farm, homes, barns, a beauty parlor, a comic book store, a factory that made tungsten products, a warehouse for silk flowers, a peach farm and a grass seed production facility.

"Sometimes we were kind of shooting fish in a barrel. And sometimes it was a challenge," Mayo, one of the real estate agents, said. "I would meet with Jim Bright late at night. There was a little convenience store up the way, and we'd just sit in the parking lot and drink a beer and decompress. It was around 11 o'clock at night, and we'd kind of discuss how things were going. We just didn't know if it was going to happen. We had no idea. It was a big leap of faith on everybody's part."

Not everyone was eager to sell; friends and family members were enlisted to help change minds, according to Herald-Journal accounts at the time, and Campbell called several landowners personally to ask them to sign.

The Davis homeplace was near the intersection of Highway 101 and Brockman McClimon Road. Phil Davis estimated the land had been in his family for three or four generations.

That home is where he grew up. It's where he returned after college to help keep the farm alive.

"That's all I had known," he said. But it was expected that the land so close to the airport would be developed sooner or later.

"It was kind of sad, but I think we knew the potential was there for great, great things," he said.

Southern charm

The acquisition of the land was part of a $130 million incentives package put together for the company that included highway expansion, runway expansion at GSP, $10 million for job training and a change in state law that would allow BMW to pay a flat fee for services such as water and sewer over 20 years, saving the company an estimated $50 million.

Since then, fee-in-lieu-of-tax agreements have been used in virtually every economic development project of any consequence in Spartanburg County.

Some criticized the incentives as overly generous. Campbell refuted those claims by saying the incentives were only offered against the promise of a substantial investment on BMW's part. They would be null should the company go elsewhere. "Zero from zero is zero," Campbell said at the time.

Pischetsrieder, with BMW, said at the time the incentives weighed less in the company's consideration than the Spartanburg site's proximity to the coast. That's despite Nebraska officials offering to subsidize the company's transport of goods from Omaha to the coast.

"If you rely on others to make sure that you are successful, you will be bankrupt earlier or later, and your partner will be, too," Pischetsrieder said then.

In the end, it seems Southern charm played a role. Pischetsrieder said at the time that he liked working with South Carolina officials "because, like Bavarians, they are informal, open and charming."

When asked about what might have been had BMW chosen Omaha or anywhere else, local officials were quick to say some other company would have come along and brought jobs to the area. But all of them couch that by saying the prestige of BMW couldn't be matched, and that its investment has brought so much more to this area than was ever imagined.

"BMW not only elevated salaries and wages, but it elevated the world's impression of Spartanburg," Chapman said. He estimated the jobs directly and indirectly created by BMW have surpassed those jobs lost with the 40-odd mills that used to make up the textile industry in Spartanburg County.

"We would've continued to work and try to recruit industry here… but there was no other company that I knew of then or know of now that could've impacted us like BMW has," Britt said. Britt said his BMW file contains the physical copy of the speech Campbell read announcing the auto manufacturer's intention to locate in Spartanburg.

"I remember the feeling was just total elation — and relief, too — that it was real," Britt said. "Just thank God that it happened. And I meant that. I said a prayer of thanks to God for letting Spartanburg be the winner — because it changed us forever. BMW saved Spartanburg."

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