State, local leaders defend BMW’s impact in the U.S.

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The “Ultimate Driving Machine” on Monday drew the ire of U.S. President-elect Donald Trump.

But South Carolina’s top economic development official on Tuesday voiced his support for BMW a day after Trump blasted the automaker and its cohorts in the German automotive industry for not assembling more cars in this country.

In an interview published by German newspaper Bild on Sunday, Trump said he would impose a 35 percent border tax on vehicles imported to the U.S. by BMW, Daimler and Volkswagen.

Trump appeared to single out BMW’s decision to build a new $1 billion plant in San Luis Potosí, Mexico, which is expected to begin production in 2019, create 1,500 jobs and produce about 150,000 of the company’s popular 3 Series sedans per year.

Bobby Hitt
Bobby Hitt

“BMW is a global company with the philosophy that production follows the market,” said the state’s commerce secretary and former BMW executive Bobby Hitt, in a statement. “With a production network of 31 plants in 14 countries around the world, BMW’s largest plant is here in South Carolina.”

Trump has continually criticized international trade deals like the North American Free Trade Agreement and proposed Trans-Pacific Partnership, calling them unfair to the U.S.

In the weeks since winning the election, Trump has taken aim at several U.S. companies, including Ford and GM, for planning to shift jobs overseas.

Boeing, Lockheed Martin and other companies have also seen their stock prices drop after drawing criticism from the president-elect.

Donald Trump
Donald Trump

“If you wan to build cars in the world, then I wish you all the best,” Trump said in the Bild interview. “You can build cars for the United States, but for every car that comes to the USA, you will pay a 35 percent tax… I would tell BMW that if you are building a factory in Mexico and plan to sell cars to the USA, without a 35 percent tax, then you can forget that.”

Hitt said that in 2016 BMW was the “single biggest exporter of vehicles from the U.S., producing more than 400,000 vehicles” at its Spartanburg County plant and selling more than 300,000 vehicles to the domestic market.

“BMW has proven to be a responsible and strategic corporate partner to the U.S. and to this state,” said Hitt, who was appointed by Gov. Nikki Haley in January 2011.

Kenn Sparks, a spokesman for BMW North America, issued a statement on Monday in response to Trump’s comments.

“The issue is about commitment and BMW made a significant commitment to the U.S. when it began manufacturing vehicles in America more than 22 years ago,” Sparks said. “Our U.S. plant in Spartanburg, South Carolina, is now our largest in the world, producing more than any other BMW plant — 411,000 vehicles in 2016. We export 70 percent of our U.S. production to 140 markets around the world. The annual export value is nearly $10 billion, greater than any other auto company in the U.S. according to the U.S. Department of Commerce. Our U.S. plant employs 8,800 people with 800 of those jobs added in the last 1 1/2 years. BMW is currently investing another $1 billion in our U.S. plant to further expand production and add capacity for a new model, the BMW X7, which goes into production in 2018.”

He said BMW’s total capital investment in the local plant, which is the production hub of it X3, X4, X5 and X5 Sports Activity Vehicles, is $7.5 billion to date.

“Some 70,000 Americans depend on the BMW Group for their livelihood working in our plant, our dealerships, our suppliers and our corporate facilities across the country,” Sparks said.

Earlier this month, BMW reported that the models produced in Spartanburg accounted for almost a third of its total business in the U.S. during 2016.

The company broke ground on the plant in Mexico in June.

At the groundbreaking ceremony, Oliver Zipse, BMW Group’s board of management member for production, said the plant in Mexico will not compete with, but complement the Spartanburg plant, meaning it will not pull jobs away from the Upstate in favor of cheaper labor in Mexico.

“The X models produced in Spartanburg are in very high demand,” Zipse said. “The models that will be made in Mexico are completely different, but are also in high demand, especially in the U.S. I would be very relaxed about [the possibility of American jobs going to Mexico].”

BMW officials said that although the plant in Mexico will be more closely tied to the company’s operations in Munich, some of its employees will be trained at the Spartanburg plant.

David Britt, chairman of Spartanburg County Council’s Economic Recruitment and Development committee, said he does not agree with Trump’s plan to impose a tax on BMW.

“I am one of the biggest supporters of BMW because I’ve seen firsthand the impact that they’ve made since they announced they’re plan to build here in 1992,” Britt said. “When you are talking about an international manufacturer or business, it is not the same as a U.S. company shipping jobs overseas. It’s a completely different ball of wax… This is a question of where do you stop?”

Britt said the county is home to more than 120 international companies that employ thousands. Many of those companies would not be here if not for BMW, he said.

“I hope he would think about that [before imposing a tariff],” Britt said. “I am going to defend BMW’s Spartanburg plant until the cows come home. I don’t want anyone messing with them… I’d be glad to talk with [Trump] about it.”

 

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