The German maker of BMW luxury cars is expected to announce today that it will build its first U.S. car assembly plant near the small town of Greer, S.C., in a bid to escape Germany's costly and volatile labor market.
The reported $628-million Bayerische Motoren Werke plant will be the first U.S. assembly venture by a European auto maker since Volkswagen's ill-fated factory in Pennsylvania closed for good in 1988.
BMW officials have spent two years looking at expansion sites outside Germany, where the company's car-making capacity is strained, and traditionally high labor costs have become a burden in the face of new Japanese luxury car competition.
Analysts said BMW's plans also underscore the increased manufacturing competitiveness of the United States, where a growing number of industrial firms have managed to challenge the efficiencies of Japanese and other low-cost producing nations.
BMW executives have called a news conference at the Greenville-Spartanburg, S.C., airport near the proposed site midway between Greenville and Spartanburg in the foothills of the Blue Ridge Mountains.
Company officials would say only that they will announce plans "for expanding the company's capabilities in the United States." But BMW has acknowledged that it is considering U.S. production, and South Carolina has long been considered the favored site in a competition with Omaha, Neb.
"You must be calling about my daughter's wedding," joked Spartanburg Mayor Bob Rowell after answering a reporter's phone call. Asked whether BMW will announce that it is building the plant nearby, he replied: "That's our assumption."
BMW has offered few specifics of its expansion plans, but South Carolina officials expect a phased-in operation that would eventually employ about 2,000 people. Production would begin in 1996.
The proposed location is part of a metropolitan area of about 600,000 that traditionally relied on the declining textile industry for jobs but has since built a more diversified manufacturing economy. Unemployment never reached 7% in the recent recession, local officials said.
Among other things, BMW's expected announcement may signal another formidable organizing challenge for the United Auto Workers union, which has failed to organize any of the independent Japanese auto assembly plants built in this country during the 1980s.
Less than 2% of the area's work force is unionized, and BMW "hopes to operate non-union," said Ben Haskew, president of the Greater Spartanburg Chamber of Commerce. Another local official said flatly, "There will be no union."
But at last week's union convention in San Diego, UAW President Owen Bieber promised that if BMW builds the plant, "we intend to organize the workers at that plant."
The area is already home to some major automotive suppliers. French tire maker Michelin has two nearby factories.