MCDERMOTT COLUMN: Daimler still modest about growth
When a brand-name automotive factory comes to town, it’s usually celebrated as a once-in-a-lifetime deal that can reshape a local economy for years to come.
Carmakers typically lead the parade.
Not at Daimler AG. The German company strained to temper expectations in 2005, when it announced it would start assembling Sprinter cargo vans at a big plant it just happened to own in North Charleston. Executives that day quickly dismissed speculation about suppliers and other spin-off firms setting up shop in the region. They steered clear of heady job promises.
Seven years later, they’re staying the course, not wanting to get too far ahead of themselves.
That’s not to say Daimler is disappointed with its relatively modest North Charleston outpost, a one-shift operation with about 100 workers on the payroll. In fact, the future appears to be quite bright for Daimler Vans Manufacturing LLC on Palmetto Commerce Parkway.
“A big, important part of our growth strategy is our van business here in the United States,” said Claus Tritt, general manager of the commercial van unit at Daimler-owned Mercedes-Benz USA.
Daimler’s reticence about tooting its horn about the Sprinter factory could stem from the tortuous route it took before arriving in North Charleston.
The journey started with Project Bluebell, the code name assigned to a $754 million Sprinter plant that was to employ several thousand workers. The deal first surfaced in April 2000, but it was quickly shelved.
Bluebell reared its head again in 2002. Savannah, which also was vying for the auto jobs, turned on the charm and even paid $25 million for the land. But when the automaker’s board took up the matter, Daimler — then DaimlerChrysler — had just posted a big loss. It killed the Georgia expansion, blaming poor global economic conditions.
The deal was resurrected yet again in 2004 when executives told state officials that sales of the boxy, fuel-efficient vans were going extremely well. They also re-emphasized their goal of assembling the vehicles closer to their growing customer base in North America.
It just so happened that Daimler was preparing to unload American LaFrance, a firetruck manufacturer hat occupied a 460,000-square-foot factory in Palmetto Commerce Park. With that piece of the puzzle solved, suddenly, the economics of a U.S. production site began to make sense.
A dramatically scaled-back version of the original Bluebell deal was finalized in late 2005.
Daimler hit some bumps in the road as production started in North Charleston. At first, the company marketed the U.S.-made Sprinters under its Freightliner heavy-truck brand.
It then switched to the Dodge badge, which became pointless after Daimler cut ties with Chrysler. The mixed messages resulted in “turmoil” for the line during those early years, Tritt said.
That came to an end four years ago, when Sprinter joined the storied Mercedes-Benz family. The vans are starting to gain some serious momentum in America.
“I think the market is picking up,” Tritt said.
In 2010, Mercedes-Benz sold about 8,600 Sprinters in the U.S. The figure nearly doubled the following year, and it grew another 26 percent in 2012, when the North Charleston plant assembled more than 22,000 of the vehicles.
“It’s the heart of our operation,” Tritt said.
The New Jersey-based executive helped formally christen a new business partnership in North Charleston with Morgan Olson, which has been making and tricking out delivery trucks for more than 60 years in Michigan.
The company recently opened a 120-worker plant five miles down the road from Daimler to equip locally made Sprinters with shelving, racks and other custom options. The new location all but eliminates factory-to-factory transportation costs.
“This company needed a second act,” said John Poin-dexter, whose investment firm owns Morgan Olson. “It’ll need a third act and a fourth act, too. This is the second act.”
Poindexter said the versatility and popularity of the Sprinter holds “great promise for the future.” Gov. Nikki Haley quipped she was ready right then and there “to talk about Phase Three and Phase Four.”
Tritt, not wanting to raise expectations too high, preferred to focus on the here and now.
“I hear Phase Two. I hear Phase Three. I hear Phase Four. I think our target agreements are going up as we speak,” he joked.
Not wanting to rain on the parade, Tritt then added: “Whatever we can do to get to Phase Four or Phase Five, we definitely will do it.”
Contact John McDermott at 937-5572.