Guide to Economic Development in the Global Auto Industry - S38

SOUTH CAROLINA

Decades on, BMW is still a South
Carolina economic engine

or the economy of South Carolina, BMW
AG has been the gift that keeps giving.
The German premium automaker moved to
build its assembly plant in Spartanburg more
than a quarter century ago, but the operation
continues to spawn additional manufacturing
investment around the state.
In the past year alone, new auto parts projects were announced in South Carolina by Bo
Parts GmbH, BorgWarner, Magna International
and Grupo Antolin. Although other automakers now have assembly plants in the region,
each of those new supplier
investments will take place
in BMW's production hub.
Grupo Antolin is building
three new plants in Spartanburg County.
South Carolina Secretary of Commerce Bobby
Bobby Hitt
Hitt vividly remembers the
first suppliers to enter the state after BMW's
1992 announcement.

TENNESSEE

Denso back for more
in Tennessee

enso Corp. launched plans last year to invest $1 billion in its Maryville, Tenn., parts
manufacturing operations, deepening its East
Tennessee roots, where it has invested about $3
billion over the past 30 years.
But it is anything but "more of the same" for
the Japanese giant.
The new 1,000-worker expansion will set
the Maryville complex up to supply an array of
new-generation auto technologies - such as inverters for electric-vehicles, radar components
and data control modules for electric and connected vehicles.
Early this year, Denso also said it will spend
another $190 million to expand its nearby Athens, Tenn., plant, adding 320 jobs. The two
projects combined will bring Denso to nearly
6,000 workers in the state.
Jack Helmboldt, president of Denso Manu-

"Twenty-five years
ago there were a handful," Hitt said of the
companies. Hitt was a
manager of the Spartanburg plant prior to
going to work in government. "Now pretty much everything
in the car is made here, with the exception of
the engine, which is imported.
The auto sector has accounted for more
than a fourth of South Carolina's total business
growth since 2011. That translates to $8.7 billion in capital investment from automotive,
along with more than 20,000 jobs. Almost all of
the growth can be attributed to BMW's initial
investment in the state, Hitt said.
"It's been a remarkable transformation in
a relatively modest amount of time when you
think about it-and there's no question that the
change-point was BMW," he said.
BMW's initial investment transformed the

facturing Tennessee, says the investment will
allow the company to localize production of
the emerging technologies for North American
customers.
"This move prepares us for the sales growth
as the industry shifts to electrification and the
advanced safety mechanisms that are needed
for the future," Helmboldt said.
"Why Tennessee?" he asked. "Our skill level is here. Probably 90 percent of all of that
type of manufacturing already takes place in
Tennessee." Expanding the existing location
rather than investing in a greenfield site allows Denso to take advantage of proven assets
- both people and infrastructure - at Maryville
and Athens.
But the Denso of 2018
faces a challenge that
the Denso of 1988 did
not: Low unemployment. The company's
earlier efforts found an
ample pool of unemployed people in East
Tennessee. That's no

E C O N O M I C D E V E L O P M E N T G U I D E / J U LY 2 0 1 8

state's workforce and brought in a vast supplier network. The "low-skilled" local labor that
had been heavily employed in textile factories,
many of which disappeared before BMW's arrival, became "high-skilled" advanced-auto
manufacturers, Hitt said.
Of BMW's 270 suppliers in the NAFTA region, 42 are in South Carolina, employing nearly 30,000 people.
"We'd had much success here in South Carolina in the past, but it was nothing as sophisticated as what BMW would bring," Hitt said.
"They were the change-agent."

- stephanie hernandez mcgavin

longer the case, Helmboldt says.
But today, Denso has the advantage of a
state program called "The Drive to 55 Tennessee Promise" to build up a skilled workforce,
said Bob Rolfe, commissioner of the Tennessee
Department of Economic and Community Development. It is a program to boost education
and skill levels across the state. Under the program, any graduating high school senior can
receive free tuition for two years of community
or technical college.
"The early returns are so successful," Rolfe
said. "We're elevating the game when it comes
to workforce development."

- stephanie hernandez mcgavin

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