More BMWs to hail from SC: German automaker plans $750 million Spartanburg expansion.

Position:Production strategies - Cover story
 
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The automotive industry in America is prospering, one could say, compliments of foreign automakers.

Take for example:

* Toyota has announced it will build a $1.3 billion manufacturing plant near Tupelo, MS. Some 150,000 Highlander crossover utility vehicles will be produced annually when the facility opens in 2010.

* Kia has broken ground on a new $1 billion plant in Georgia expected to open in late 2009 with an annual capacity of 300,000 vehicles.

* Since October 2006, Honda has announced plans for $91 million in additional construction and investment at its Lincoln, AL, facility.

* Mercedes-Benz is considering a $5 million expansion to its Ann Arbor, MI, emissions laboratory to help develop cars for the United States market.

Add to that BMW's recent plans to invest an additional $750 million to its Spartanburg, SC, operations. This will include adding 1.5 million sqft to the site to produce three models. Production capacity is expected to be 240,000 units by 2012.

The three-year construction project includes a new 1.2 million-sqft assembly facility north of the existing factory to accommodate the next generation BMW X3 Sports Activity Vehicle. In addition, the paint shop will expand by about 80 percent or 300,000sqft. The existing body shops will be renovated.

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"This is another positive sign that our efforts to improve the state's business climate are paying incredible dividends," says Gov. Mark Sanford. "BMW's announcement to expand its operations in South Carolina is far more than an expansion.

"This investment brings with it an entire second production facility that will significantly impact the growth of our state's automotive industry not just in terms of the jobs directly tied to the investment, but also indirectly from the new jobs and investments expected to be generated by BMW suppliers."

South Carolina Secretary of Commerce Joe Taylor echoed those comments, saying the new plant means new jobs for people and many new supplier jobs all over South Carolina.

BMW said it plans to add 500 jobs in Spartanburg, but to cut 5,000 jobs in Germany and 600 elsewhere, or 7.5 percent of its work force over two years.

A BMW spokesman said the rising value of the euro against the dollar does play a part, but it's not the primary reason for the expansion. A rising euro means European goods cost more for Americans to buy. One industry analyst said by building the cars in the United States, BMW could save money on the lower...

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