How BMW grew South Carolina peach orchards into a car capital

BMW
BMW

(GREER, S.C.) — German automaker BMW took a chance 27 years ago when it purchased 900 acres of peach orchards in rural Greer, South Carolina.

The once-booming area had collapsed along with the textile industry. Cheaper manufacturing overseas forced longtime mills to shutter and thousands of workers lost their jobs.

Few locals had heard of the automotive giant when BMW executives announced in June 1992 that the company was building its first full production facility outside of Germany in their hometown.

“There was a lot of excitement about BMW when they were coming, but not everyone knew what that meant,” Russell Roman, a senior engineer at BMW, told ABC News. “It was a blip on the radar.”

Roman was one of the first employees to be hired. He, too, was unfamiliar with BMW and had never worked for an automaker. In 26 years he watched as the plant transformed into BMW’s largest facility in the world.

“It’s much more competitive to get a job now at the plant,” he said. “The barriers to entry have increased.”

These days BMW’s SUVs and crossovers are frequently spotted on the roads in Greer and the now vibrant city of Greenville. Plant Spartanburg celebrated its 25th anniversary this year and employs the more than 11,000 workers who build the majority of BMWs sold in America.

The first BMW to roll off the production line in September 1994 was a 318i sedan. More than 4.75 million vehicles have since been built in the state and the 7 million-square-foot facility has undergone six expansions. The BMW Group — which also includes Rolls-Royce and MINI — has invested $10.6 billion in the facility, including millions of dollars on the company’s production of PHEV (plug-in hybrid electric vehicle) models.

The BMW Group has been the highest value vehicle exporter from the U.S. for the last five years, according to U.S. Department of Commerce data.

BMW is proof that “Germans contribute so much to the U.S. economy,” Doug Woodward, a professor of economics at the University of South Carolina, told ABC News.

According to his research, BMW supports nearly 121,000 jobs in the U.S. and the company boosts annual U.S. gross domestic product by $15.8 billion. For every 10 jobs that BMW creates, 90 more jobs “are sustained through an economic ripple effect on the supplier network and through related consumer spending on U.S. goods and services,” he said.

The Munich-based automaker received about $200 million in tax breaks from the state government (accounting for inflation) but it’s been “a net gain” for South Carolina, Woodward said.

“BMW has generated so much in tax revenue, the incentives have paid for themselves. We’re so fortunate to have this investment,” he argued.

Woodward said Greenville might not have been what it is today — a desirable, in-demand city to live and work — if BMW had chosen to build its plant elsewhere.

“The region was struggling when BMW decided to move here,” Woodward said. “BMW has done so much to boost the economy of Greer and Greenville — it’s been a complete turnaround. BMW is the anchor of the local community.”

Robert Underwood, a business professor at Furman University, remembers when Greenville “wasn’t a safe place 20 years ago.”

“Now it’s flourishing and the local economy is stronger,” he told ABC News. “BMW’s investment came at a critical time for South Carolina. It’s a great illustration of the merits of globalization.”

Underwood said BMW’s success in the area has paved the way for other companies — many of them foreign — to invest in the state. He estimates that at least 50 foreign firms from 38 different countries have set up offices in the upstate region.

“South Carolina has proved to be a very good place to do business,” he said.

BMW’s results in the state likely convinced Volvo Cars in 2015 to build its first U.S. plant some 200 miles away in Ridgeville, South Carolina. Workers there manufacture the company’s S60 mid-size sedan and production of the XC90 SUV begins in 2022. Volvo says it expects to generate about $15 billion in economic activity in the state and support around 9,000 jobs.

South Carolina was already the manufacturing base for the French company Michelin, and Bosch, the German automotive parts maker that builds advanced fuel injectors and anti-lock brake system components in North Charleston. Their longtime presence, along with the Port of Charleston, were two key reasons BMW selected Spartanburg County to build a plant.

Today, there are 400 auto-related companies in the Palmetto State that employ 66,000 South Carolinians, according to Underwood. The combined economic impact is $27 billion, he said.

“Global icons such as BMW and Michelin have contributed appreciably to our region’s transformation from an aging textile hub to a world class center of global manufacturing and innovation,” he said.

South Carolina Gov. Henry McMaster, who attended the plant’s 25th anniversary celebration in June, hailed BMW for creating “a manufacturing renaissance in South Carolina, which is unequal in any other state in the United States.”

“The presence of this company has changed everything in the trajectory and the future of our state,” he said. “[The investment] is going to grow and continue to produce positive results that no one could have dreamed at the time.”

Sky Foster, deputy manager of corporate communications at BMW and plant employee No. 5, said she was tasked with the recruiting process when the plant first opened. More than 160,000 resumes were submitted for 100 jobs, with people from all over the world applying, she said.

“This was an opportunity to work with a world class organization,” she told ABC News.

Unlike General Motors, Ford Motor Co. and Fiat Chrysler Automobiles (FCA), BMW’s plant is non-union (South Carolina is a “right-to-work” state) and employee attempts to unionize in 2004 failed.

“People have pride in their jobs,” Foster told ABC News. “It’s an exciting place to work … with a lifelong career path. There’s constant learning here [and] we want to remain on the cutting edge. We have not stopped growing since Day 1.”

Part of that growth includes training employees on the company’s latest battery technology. Employees in Spartanburg will assemble batteries on-site for the 2020 X5 xDrive45e Sports Activity Vehicle and X3 xDrive302, more than doubling the plant’s capacity for battery installation. Employees in this division were required to complete an extensive program in battery production, robotics and electrical inline quality inspection.

“These are 21st manufacturing jobs,” said Woodward. “People want to work here. The plant is running smoothly. Workers are happy.”

All of BMW’s sport-utility vehicles — the X3, X4, X5, X6 and X7 — in addition to their high-performance variants are produced in the bustling plant, with production totaling 356,749 units in 2018, according to BMW. More than 1,500 BMWs roll off the line each day and 70 percent of the plant’s production is exported to 125 world markets.

“There is little awareness [in the U.S.] of where the cars are made,” Woodward said. “Most consumers think they’re coming from Germany. Even Chinese customers don’t know.”

Woodward, however, said China’s retaliation against tariffs imposed by the Trump administration may be even more of a challenge for BMW.

“China was a big export market for the South Carolina plant,” he said. “The plant specializes in the X series, which was in high demand in China over the past decade. BMW has had to adjust its global strategy and shift some production to its China factories in Shenyang. The trade war has real costs for major exporting car companies like BMW and has caused considerable uncertainty.”

A BMW spokesman told ABC News, “Production at Plant Spartanburg has been unaffected and will be on record level this year.”

Roman, the engineer, said BMW has “proven” that South Carolina could be the future of the automotive industry.

“We have a very dedicated group of people here,” he said. “It’s not easy to build cars. But it’s a passion to show up every day.”

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