Last summer, when Volvo executives were considering South Carolina for their first American plant – a $500 million behemoth which promises to eventually employ 4,000 people – they talked with what may seem like an unlikely adviser. They visited their competitors, BMW.
“You always want to avoid reinventing the wheel,” Lex Kerssemakers, CEO of Volvo Cars of North America, said Thursday in an interview, confirming earlier reporting by The State newspaper. “If they had a good experience, that would make a big difference in our decision process. They have been there for years so they know exactly how it works in South Carolina.”
Although Secretary of Commerce Bobby Hitt, a former BMW executive, said he didn’t facilitate or attend the meetings, his institutional knowledge loomed large in Volvo’s decision to locate here.
“He has very long experience in the automotive industry,” said Kerssmakers (pronounced KEHR'-say-may-kurz), a native of The Netherlands after a ceremony at Founders Hall on the banks of the Ashley River near Charles Towne Landing. Hitt “knows the challenges we are going to face. So he has been thinking with us instead of us asking a question and then coming back with a solution. It was a parallel process. That increases speed tremendously. He has been a huge contributor to the process.”
Kerssmakers also said that Volvo would unveil 14 new models over the next few years. He said the company hasn’t decided which models will be manufactured in South Carolina.
His comments followed a ceremony in Charleston at which he and Gov. Nikki Haley made the deal official, signing an agreement that will bring the plant to a former timber farm off I-26 in Berkeley County.
Attendees at the event noshed on crab cakes, ham biscuits and several varieties of tea and lemonade as they snapped photos and selfies with an array of Volvo cars, both antique and modern.
Already work has begun widing the highway, according to Lars Wrebo, senior vice president of purchasing and manufacturing. An interchange will be added for the plant, too.
Volvo is receiving at least $204 million in incentives from the state and electric utility Santee Cooper.
South Carolina offered about $150 million in incentives to land the company, including about $120 million in economic-development bonds that will need final state approval, Hitt said. The state also offered grants for site improvements and tax credits for jobs created.
Some of the money will go toward the new interchange.
The company will begin construction this fall and want to start making cars in 2018. It plans to make 57,000 a year. An expansion about a decade down the road would be an identical plant, bringing the total of cars produced to 100,000 annually, Volvo officials said.
The first phase of the Volvo plant would cover 575 acres near Ridgeville with another 322 acres set aside for expansion, according to an environmental permit. “It would be a mirror image,” Kerssmakers said.
Hiring will begin in late 2017, with the bulk of workers coming aboard in 2018. About 7,500 potential employees have signed up to apply on the READYSC web site, which is affliated with the state’s technical college system, he said.
Kerssmakers said earlier that South Carolina’s workforce was a major consideration in the Swedish automaker’s decision to locate here. It is Volvo’s first American plant. But the company, now owned by a Chinese company, recently opened two plants there.
Referring to the models to be made at the plant, he said, “You can imagine the journey was are making in the next few years. We are still reshuffling a little bit which is the best car to start with, also based on demand outside the U.S. It will be both global demand and local demand.
“It’s a puzzle and we are still working on that puzzle,” Kerssmakers said.
Volvo is the latest economic whale for Haley and Hitt, who also have landed big scores such as Continental Tire in Sumter and Michelin expansions in the Midlands and the Upstate.
But BMW has been the driver in the state’s automotive cluster, which now has another has another major player. The German automaker opened its first U.S. plant in Greer in 1994, transforming South Carolina’s economic culture.
The Upstate plant now employs more than 8,000 and has attracted thousands of additional jobs at its suppliers. BMW’s plant site has become a tourist destination, which includes a driving course.
Hitt, who attended the ceremony but did not speak, was clearly thrilled following the formal signing.
“We now have BMW, Mercedes-Benz and Volvo,” Hitt said. “No other state has that constellation.”
Reach Wilkinson at (803) 771-8495.
Volvo by the numbers
cost of Berkeley County plant
incentives the company received from the state and Santee Cooper
number of cars the plant and an expansion will produce each year.
number of jobs announced
number of initial jobs