Business

New Volvo plant could benefit the Upstate

By Zach Fox

zach.fox@shj.com

Commerce Secretary Bobby Hitt is joined by Gov. Nikki Haley and state officials outside the Governor's Mansion Complex as they make it official by announcing Volvo will build a $500 million factory in Berkeley County to produce 100,000 cars a year.
Commerce Secretary Bobby Hitt is joined by Gov. Nikki Haley and state officials outside the Governor's Mansion Complex as they make it official by announcing Volvo will build a $500 million factory in Berkeley County to produce 100,000 cars a year. gmelendez@thestate.com

The impact of Volvo Car Corp.'s announcement of a $500 million plant in Berkeley County could reach into the Upstate.

The announcement that Volvo had chosen South Carolina for its first manufacturing plant in the Western Hemisphere came Monday morning. The plant is expected to create 2,000 new jobs over the next decade, and 4,000 jobs by 2030. Construction on the plant begins this fall with an expected initial capacity of around 100,000 cars, the first of which is expected to roll off the assembly line in 2018.

Experts say the plant will bring an economic boost to the state and bring benefits to the many automotive industry suppliers in the Upstate.

“This is a landmark moment and truly a great day in South Carolina as we welcome Volvo Cars' first American manufacturing plant to our state,” said Gov. Nikki Haley. “By bringing $500 million in new investment and 4,000 jobs to this community, Volvo's presence and commitment to Berkeley County and the state will be felt for decades to come.”

The statewide impact of Volvo's announcement will be major, according to Joey Von Nessen, a research economist with the University of South Carolina's Darla Moore School of Business. “The impact will be significant,” he said. “This is a huge win for South Carolina.”

Von Nessen has conducted economic impact studies across the state, including a study on the economic impacts of BMW Manufacturing Co. He said that for every job added to South Carolina's automotive cluster, including the thousands expected to come from Volvo's newest plant, three additional jobs are created across the state. “They (automakers) can scale up employment in a fairly unique way,” he said.

An economic impact analysis compiled by Dr. Frank Hefner at the College of Charleston estimates that, for the initial 2,000 direct jobs, more than 8,000 total jobs would be created. Operating with 2,000 employees, the plant would contribute approximately $4.8 billion in total economic output on an annual basis.

“South Carolina is leading the pack in advanced manufacturing, and we're excited to celebrate the decision of yet another global leader that our state is 'just right' for business,” said State Secretary of Commerce Bobby Hitt.

Volvo's presence creates positive benefits for other companies in the automotive cluster, Von Nessen said. “I think Volvo coming here will certainly increase demand for suppliers,” he said. “It's good for Volvo, for BMW and for everyone involved.”

Last year, BMW, which celebrated its 20th anniversary in South Carolina, announced a $1 billion plan to add production of the new X7 and 800 jobs to its Spartanburg County plant by 2016. The company said the expansion will boost BMW Manufacturing's output by 50 percent to 450,000 cars per year and increase the facility's workforce to almost 9,000, making it the largest BMW plant — in terms of volume — in the world.

The state's auto industry, home to more than 250 companies and suppliers, is the nation's leading exporter of both tires and automobiles. Spartanburg County Councilman David Britt said the state's automotive supplier network was the deciding factor behind why Volvo chose The Palmetto State over Georgia and North Carolina. “I guarantee you they'll be tapping into the supplier network,” Britt said. “These companies in Spartanburg County would be tops on my list.”

Britt, chairman of the council's economic development committee, said the Volvo announcement means nothing but positives for the hundreds of South Carolina's auto suppliers. “In Spartanburg, I think we're in a great position. A rising tide floats all boats,” he said. “The great thing about South Carolina is that we know how to build things, and we're not just singing that here. The world knows our tune.”

Along with the benefits Volvo brings to the state's automotive cluster, Von Nessen said the announcement could impact business across the state. He said the presence of major players in the auto world could entice other big companies from different sectors to consider investing in South Carolina.

“It's another major, marquee name here,“ he said. “I think that's a good thing for South Carolina in the long run. It's a beacon for South Carolina.”

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