When South Carolina met BMW

Richmond Federal Reserve's Research Department ^ | June 2011 | B E T T Y J OYC E N A S H

[MontaniSemperLiberi]

Last April, the Spartanburg BMW plant rolled out 23,059 vehicles — three-quarters of them for export. (The BMW Group’s U.S. sales went up by 10 percent in 2010 over 2009.) The plant’s latest and biggest addition was announced in 2008, amid recession, and completed in late 2010: The company invested $750 million and added 1,600 jobs to tool up for the next generation of crossover sport utility vehicles, which BMW calls sports “activity” vehicles. But back in 1992, when the plant was announced, people wondered whether South Carolina’s workforce could produce these prestige vehicles. Since the 1970s, the state’s manufacturing base, largely composed of textiles, had been dominated by lower-skilled, low-wage work. Moreover, textile jobs were chasing even lower-wage regions abroad in the wake of falling trade barriers. As those jobs went away, income levels fell.

Foreign company operations were not new to South Carolina. The state already had 75 firms from Germany alone, but South Carolina workers had to prove they could make BMWs.

BMW, as it turns out, had something to prove too.

...

BMW also was pleased by something South Carolina did not possess: an existing automotive culture. “BMW wanted to develop its workforce and routine in its own way,” Hitt says. And it probably didn’t hurt that union activity in the state is practically nonexistent. Foreign auto firms locate, in most cases, in right-to-work states. Although BMW would be the state’s first automaker, South Carolina already had a small auto-parts cluster. Michelin had established its first tire plant in 1973; in 1988, Michelin had even moved its North American headquarters from New York to Greenville, S.C. Bosch began producing injection systems for diesel engines in South Carolina in 1974.

[MontaniSemperLiberi]

I ran across this article today from the Richmond Fed. I thought it was a good response to the union foisted idea that people outside of unions are too dumb to manufacture stuff.

[San Jacinto]

According to the NLRB, it is illegal to have manufacturing plants in South Carolina.

[festusbanjo]

So you are saying that evil corporations actually will locate and prosper in areas where they aren’t viewed as the enemy or the golden goose waiting to be slaughtered? Who knew? /sarc