Another growth “tsunami” is expected to hit Spartanburg County's automotive sector.
German automaker BMW announced in March 2014 it planned to pump another $1 billion into its local plant. The expansion will support a 50 percent annual production increase (from 300,000 vehicles to 450,000), add 800 jobs to the plant's 8,000-person workforce and facilitate production of the new X7 by the end of next year. It will also elevate the 5 million-square-foot, $8 billion BMW Manufacturing Co. to the status of world's largest BMW plant.
As with past expansions, local officials said they anticipate growth in the company's supply chain, which is comprised of 270 companies in North America, including 40 in South Carolina and nearly two dozen in Spartanburg.
“We do expect growth opportunities as the automotive arena continues to increase its output,” said Carter Smith, executive vice president of the Spartanburg Area Chamber of Commerce's Economic Futures Group. “More vehicles mean more components, which typically leads to additional facility and workforce expansion among suppliers.”
Last week, Draexlmaier Group, a BMW supplier, announced it will invest more than $35 million to expand its facility in Duncan and create 94 new jobs during the next five years.
Stefan Bude, the company's chief financial officer, said Draexlmaier's expansion isn't caused entirely to BMW's expansion, but that did play a part. “Our expansion is one of the largest consequences of BMW's expansion,” he said.
Smith said Draexlmaier's announcement could be the first of several expansions of existing suppliers, or the relocation of other companies seeking to be closer to “the mothership.”“We are seeing increased traffic in the automotive sector,” Smith said.
A University of South Carolina Darla Moore School of Business study in 2014 found that BMW vehicle production supports 30,777 jobs in the state. For every job created at BMW Manufacturing Co., three jobs are created elsewhere, the study said.
That means the additional jobs tied to BMW's current expansion could potentially generate 2,400 jobs in the state.
According to the USC study, BMW's total economic output in South Carolina is $16.6 billion annually. The plant and its suppliers generate about $1.8 billion in labor income each year.