Business

Why BMW and other German companies matter to SC

A "Made In SC" plate is shown on a BMW X4 vehicle during a 2014 news conference. BMW now produces the X3, X4, X5 and X6 in South Carolina, with an X7 on the horizon, according to the company.
A "Made In SC" plate is shown on a BMW X4 vehicle during a 2014 news conference. BMW now produces the X3, X4, X5 and X6 in South Carolina, with an X7 on the horizon, according to the company. FILE PHOTO/AP

For nearly two hours every day, Anderson native Deborah Williams commutes to and from her job at BMW Manufacturing in Spartanburg County, a job she patiently waited five years to apply for.

The job, she said, has allowed her to live a comfortable life, travel extensively and help her nieces and nephews pay for college.

President Donald Trump made recent comments taking Germany to task for its trade practices, and his comments have generated a discussion about the contributions that BMW and other German companies have had on South Carolina’s Upstate and the country.

Williams, a paint inspector, is in charge of checking vehicles before they roll off the assembly line and making sure each car has no defects.

She has become so good at her job that after 17 years at the plant, she has been able to recognize bad paint jobs on other cars while driving around.

For eight years, Williams worked at Frigidaire in Anderson, waiting until the BMW plant was up and running before sending in her application.

When the call finally came, “I was ready,” she said.

BMW, marking its 25th anniversary in South Carolina this year, employs nearly 9,000 people at its Greer facility, and suppliers throughout the state contribute billions to the South Carolina economy.

Since 1996 BMW has given more than $36 million to local educational, cultural and civic programs throughout the Upstate, according to the company. The golf tournament it sponsors every year has raised more than $12 million alone for local charities.

German news magazine Der Spiegel quoted sources at the NATO summit in Belgium late last month who said Trump called Germans very “bad” or “evil” to European Union President Jean-Claude Juncker. Trump spokesman Sean Spicer has denied the claim and sought to smooth any tension the president may have with German Chancellor Angela Merkel.

The same day as that report, Trump ally and South Carolina Gov. Henry McMaster, along with Germany’s Federal Minister for Economic Affairs and Energy, Brigitte Zypries, toured BMW Manufacturing in Greer. They stressed the importance of a trade relationship between the two before stepping into a closed meeting on apprenticeship programs with plant President and CEO Knudt Flor.

Trump then took to Twitter May 30: “We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military. Very bad for U.S. This will change.”

USA Today reported that trade deficit is almost $65 billion, or 35 percent wider than 10 years ago.

“I was dismayed,” said Greer Mayor Rick Danner, who reached out to the Greer and Spartanburg Chambers of Commerce upon hearing Trump’s targeted trade approach. “In this case, it seemed that the sentiment was something that we needed to address locally, simply because I know that those comments could be up to interpretation. We needed to send a positive message.”

The 1992 announcement of the German automaker’s first full manufacturing facility outside of Germany in the Upstate has been credited with helping South Carolina reduce unemployment and reinvigorate an economy devastated by the loss of textile jobs.

“In the mid- to late ’80s, we lost 25,000 jobs in Spartanburg, just with the demise of the textile industry,” longtime Spartanburg County Councilman David Britt said. “We were in a world of hurt. We had nothing. When it went away, it was just a tremendous devastation.”

BMW was seeking property in neighboring states and Nebraska when Greenville-born Gov. Carroll Campbell helped begin an effort to land BMW in the Upstate, Britt said.

“BMW saved Spartanburg County,” he said. “It set us up to be an industrial Mecca.”

A study published five years ago by the Darla Moore School of Business at the University of South Carolina illustrated BMW’s “ripple effects” across several industries, creating indirect job opportunities and higher wages for South Carolina residents.

Doug Woodward, an economics professor at USC who participated in the 20-year BMW economic analysis, considers BMW the linchpin for the Palmetto State’s automobile and supply industry.

“Certainly it’s the largest manufacturer, with the biggest impact on our GDP,” he said of BMW’s $7.8 billion capital investment in Spartanburg County and, as of 2013, almost $17 billion added onto the state’s economy annually. “Its reputation creates a halo effect, and we should be very happy to have a company that’s (going to be) around for 100 years.”

The BMW plant in Greer has grown since it arrived, including 800 jobs created within the past two years.

Latest estimates put the plant’s production at 1,400 cars per day, a pace that would exceed its 2016 production of 411,711 vehicles – its largest annual production volume in history.

Kenn Sparks, head of corporate communications for BMW North America, said the company exports 70 percent of U.S. production to 140 markets around the world.

BMW’s annual export value for 2016 was more than $10.5 billion. Many of the vehicles went through Inland Port in Greer, which opened in 2013, and through the Port of Charleston.

“The S.C. Ports Authority has a strong history with BMW and a great admiration for them,” said Jim Newsome, Ports Authority president and CEO. “Their South Carolina operations are vital to our success, and we look forward to continuing their import-export business through both our Charleston and Greer facilities.”

Last month at BMW, McMaster said within the past six years South Carolina has exported almost $5 billion in trade to Germany alone.

“We always, the country always wants to export more than they import, and that’s what (Trump) was referring to,” McMaster told reporters at the State House recently.

The governor said he has not spoken to the White House since last week, nor has he felt the need to educate the president on the heavy German footprint in the Palmetto State.

“No, I think the president is fully educated and he knows precisely what he’s doing.”

BMW’s reach

Burriss Nelson, Anderson County’s Economic Development director, said the president’s comments left him at a loss for words. “I certainly hope we can continue with the companies that we have,” he said. “It is our hope that there is no loss of jobs and that these companies don’t leave the U.S.”

BMW’s footprint in South Carolina stretches far beyond putting car parts together.

BMW North America’s suppliers have grown to about 270 companies, with 220 of those in the United States. Several of those supply companies are strategically located around the Upstate, with companies that include Plastic Omnium, Bosch and Draexlmaier Automotive of America LLC, which in 2011 announced the expansion of its Spartanburg plant that included 150 new jobs and a $22.3 million investment.

“Some 70,000 Americans depend on the BMW Group for their livelihood working in our plant, our dealerships, our suppliers and our corporate facilities across the U.S.,” Sparks said. “I should add, the highly popular BMW X models were born here in the United States beginning with the X5 in 1999. Our plant at Spartanburg is the worldwide Center of Competence for BMW X models and now produces the X3, X4, X5, and X6 with the all-new X7 on the horizon.”

BMW models built in South Carolina account for nearly 38 percent of BMW U.S. sales through the end of April.

Though a highly unrealistic scenario, if BMW pulled out of the Upstate it would result in at least 28,000 jobs lost and a chunk of income lost in the state’s GDP, Woodward said.

Reaction to Trump’s message mixed

South Carolina Chamber President and CEO Ted Pitts didn’t mince words when he told The State newspaper he was “a little surprised and disappointed” by Trump’s trade remarks.

“Perhaps the president needs to be ‘educated’ about the benefits German carmakers have brought to South Carolina,” Pitts told the newspaper.

State Commerce Secretary Bobby Hitt, who was head of BMW Manufacturing’s public affairs for 18 years and helped land the deal to bring the plant to Greer, called BMW the exact type of international partner any economist and any president would want.

But, he said, it’s almost routine for governments, and even American companies, to tiff over trade and tariffs.

“We try to work with all the governments to get these things smoothed out and I feel pretty comfortable all these matters will get smoothed out, too,” he said.

Asked for reaction to Trump’s trade message, Kevin Bishop, communications director for U.S. Sen. Lindsey Graham, deferred to tweets published by Graham in January following Trump’s hit to automakers on building plants outside of U.S. and in Mexico.

“South Carolina is proud to be part of the @BMW family. Success for @BMW anywhere is success everywhere,” Graham tweeted.

U.S. Rep. Trey Gowdy focused his response on the large international trade impact on the U.S. and South Carolina. “The Upstate is not only a manufacturing powerhouse, but also an exporting powerhouse,” he said. “Companies like BMW, Michelin and GE manufacture high quality products in South Carolina that are used world wide.”

The state Democratic Party was not so subtle, apologizing on behalf of the state Republican Party and the state. The Republican Party did not respond to repeated requests for comment.

The White House had not confirmed whether Trump will visit BMW at the end of the month for the plant’s 25th anniversary event. Asked whether Trump should visit BMW as an opportunity to learn about the company’s deep investment, Greer Mayor Rick Danner said he will leave that up to the president.

“I certainly don’t think that one comment indicates legislation or a trade agreement or anything like that, not rushing into judgment in this situation or panic,” he said. “On the other hand, it has to be disconcerting in some regards, to be the largest automaker in the U.S. and hear some of the comments that have been made.”

Kirk Brown of the Anderson Independent Mail contributed to this report.

By the numbers

BMW and German companies in South Carolina’s Upstate

1992

Year BMW announced plans to locate in Upstate

$600 million

BMW’s initial investment pledge to state

2,000

BMW’s initial employment pledge to state

$7.8 billion

BMW investment in Spartanburg County today

9,000

Employed by BMW today (just under 9,000)

1,400

Vehicles produced daily

3.7 million

Vehicles produced to date

136

German companies in Upstate

19,000

Upstate jobs with German companies

The Greenville News

BMW: Not only Germany company in Upstate

BMW is the biggest and best-known German company in the Upstate but it is certainly not the only one.

The automaker in Greer is among 136 German-owned firms in the Upstate, ranging from manufacturing titans like Bosch to the Aldi grocery store chain. Besides providing more than 19,000 jobs, they contribute to the region’s cultural diversity in ways that range from German restaurants to the European character of downtown Greenville.

“Germany is just a great country to work with for us,” said John Lummus, president and CEO of the Upstate SC Alliance.

South Carolina’s exports to Germany totaled $3.7 billion last year, ranking second to China as the state’s largest export market, according to the U.S. Census Bureau.

Bosch employs more than 1,200 people at its plant in Anderson and 750 at its facility in Fountain Inn. Another 1,900 people work at its plant in Charleston. A global supplier of technology and services, Bosch has nearly 33,000 employees in North America, where it racked up $13.7 billion in sales last year.

Additionally, Bosch’s U.S.-based foundation has awarded more than $3.4 million to organizations and schools in South Carolina since 2013. Those grants include $560,000 to support scholarships for women and underrepresented students at Clemson University’s International Center for Automotive Research in Greenville.

German influences in the Upstate predated BMW’s move to the region. But the presence of the automaker and the ensuing influx of German companies has enhanced the area’s international flavor.

Germans settlers founded Walhalla in Oconee County in the mid-1800s. Each year large crowds flock to the community’s Oktoberfest celebration.

In the 1960s, a number of German textile machinery manufacturers were lured to the Spartanburg area. Today there are more than 1,300 households in Spartanburg County where German is spoken, according to the county’s convention and visitors bureau.

The German American Club of the Carolinas, based in Spartanburg, marked its 40th anniversary last year. The club has about 140 members.

Kirk Brown, The Independent Mail

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