20 year after opening plant in South Carolina, BMW exceeding employment, production goals

Two decades after BMW announced it would build an automotive plant in Greer, S.C., the factory’s 7,000 employees in November produced more than 25,000 of BMW’s crossover vehicles.

GREER, S.C. — Two decades ago, then-South Carolina Gov. Carroll Campbell stood at the Greenville-Spartanburg airport and announced that a plant being built just up the road by Germany’s Bayerische Motoren Worke AG would be a benchmark in the history of the state.

By most measures, the auto plant near Greer has exceeded some lofty expectations. BMW officials said they expected the plant to have 2,000 employees and make 6,500 luxury vehicles a month. In November, the factory’s 7,000 employees produced more than 25,000 of BMW’s crossover vehicles, which are sport utility-type vehicles built on the underpinnings of a sedan. In 20 years, BMW has invested $6 billion in South Carolina, nearly equal to the state budget proposed by Gov. Nikki Haley this month.

“They never stopped building the plant. It has been a continuing expansion,” said Bruce Yandle, an economics professor emeritus at Clemson University.

BMW is now a part of modern South Carolina culture, so much so that politicians have been chasing the next BMW ever since.

But some say that pursuit has had its drawbacks. BMW received hundreds of millions of dollars in public money and tax breaks. Although that investment appears to have paid off, it also led to an often strapped state providing millions more in taxpayer money to hundreds of other companies — most of it without much public regulation — making it nearly impossible to judge the quality of the investments.

Officials say BMW’s success is evident. A parade of suppliers followed the auto plant, and a University of South Carolina study found BMW and the plants that supply the parts to make the vehicles account for more than 1 percent of the state’s work force of nearly 2 million.

The automaker gave $10 million to help Clemson establish its International Center for Automotive Research. The auto plant just off I-85 might be the most recognizable landmark between Atlanta and Charlotte.

Rick Danner, mayor of Greer, said, “I couldn't even begin to quantify what their presence has meant. Obviously, their impact touches so many different areas.”

BMW said it had no plans to mark the 20th anniversary of the announcement and groundbreaking. Instead, the company celebrated last January when its 2 millionth vehicle came off the production line. It also announced yet another expansion, worth $900 million and 300 new jobs.

Mr. Campbell, who was governor from 1987 to 1995 and died in 2005, pursued BMW over several years. A flurry of faxes at all times of the day and night between Germany and South Carolina secured the deal in June 1992, with Mr. Campbell celebrating by climbing into one of the company’s luxury sedan's with a “BMW 1” license plate. BMW liked the land and tax breaks offered by the state along with its easy access to interstates and the port in Charleston.

South Carolina beat out Nebraska, whose governor at the time complained that he “couldn’t move the Atlantic Ocean.” The observation has been on the mark. BMW exports 70 percent of the vehicles made in South Carolina, most of them heading out to sea on cargo ships.

BMW’s decision wasn’t met with all praise, especially outside the state. Plenty of people in the United States were angry about manufacturing jobs going overseas for lower wages, and some suggested a plum manufacturer such as BMW picked South Carolina because its people would work cheap. The state’s right-to-work law also meant employees could not be required to join labor unions.

“South Carolina was to the Germans the state that bore the closest resemblance to Mexico,” a columnist in the New York-area paper Newsday wrote.

But BMW helped bring along a southern manufacturing renaissance, especially with automobiles, Clemson’s Mr. Yandle said

“Then you had BMW’s arch rival Mercedes thinking about locating a plant somewhere in the U.S.,” Mr. Yandle said. “If those folks in South Carolina can build a BMW that the world will accept, then somewhere else in the South could make a Mercedes that the world would accept.”

BMW didn’t bring the kind of economic kick that Mr. Campbell and others hoped for in individual wallets. Per capita income in Greenville and Spartanburg counties has risen barely more rapidly than the rate of inflation in the last decade, according to U.S. Census figures. The poverty level in both places has increased, and BMW and related industries couldn’t push the state from recession, as unemployment soared past 11 percent three years ago.

Still, per capita income in Greenville County was $26,547 in 2010, about $3,200 more than the South Carolina average.

BMW’s most important legacy may be its suppliers. About 50 plants in South Carolina provide parts to the automaker. Together they have added 16,000 jobs to the BMW plant’s 7,000 employees.