Recent company announcements suggest the Upstate may wind up getting a significant portion of the economic impact of a Volvo Cars assembly plant that’s under construction in the Lowcountry.
At least three automotive suppliers — Gestamp, Lear Corp., and Plastic Omnium — have announced plans to supply the first Volvo plant in America from the Upstate.
All three launched operations along South Carolina’s Interstate 85 corridor years ago to make parts for the BMW assembly plant between Greenville and Spartanburg.
Auto industry experts said it’s not surprising they chose to expand in the Upstate rather than launch new operations closer to the Berkeley County site where Volvo is scheduled to start making its S60 sedan in late 2018.
Fred Cartwright, a former General Motors executive who is now executive director of Clemson University’s International Center for Automotive Research in Greenville, said suppliers might prefer to be closer to the customer that offers the most business.
In South Carolina, that’s more likely to be the BMW plant, where the volume has grown steadily for more than 20 years and now exceeds 400,000 cars a year.
Volvo, by contrast, said its South Carolina plant will have the capacity to build no more than 120,000 to 150,000 cars a year.
Dennis Braasch, a Greenville-area executive who has helped manage the construction of auto assembly plants around the world, said suppliers may not have enough business from Volvo at this point to justify the expense of a new plant in the Lowcountry. That could change as Volvo’s production grows, he said.
Gestamp said business from Volvo and BMW is the reason it’s adding 130 jobs and 305,000 square feet to its metal-stamping plant in Union.
The plant will employ about 600 workers, including more than 100 contract laborers, inside 835,000 square feet when the expansion is complete, a spokesman for the Spanish company said.
Lear said it would spend $7.7 million expanding its plant in Duncan, which it said is scheduled to start making seats for Volvo in 2018 while continuing to make seats for the BMW X3 and X4.
The plant will have enough capacity for the Volvo work because it’s scheduled to stop making seats for BMW’s X5 and X6 in 2018 and 2019 respectively, said Joel Elsesser, director of financial planning and analysis and investor relations for Southfield, Mich.-based Lear.
Plastic Omnium said it’s building a new plant in Greer to supply exterior painted body parts to the Volvo plant as well as the BMW plant and a Mercedes plant in Alabama.
The Paris-based company said in a news release that the Greer plant is expected to begin production in mid-2018 and will be its “pilot 4.0 plant.”
Plastic Omnium didn’t respond to emails requesting additional information, and it wasn’t clear how its plans for the Greer plant fit with the future of its existing operation in Anderson County.
Jim Nichols, a spokesman for Volvo Cars in New Jersey, said the company doesn’t comment on its supplier network, though individual suppliers may make their own announcements.
