BMW's economic impact on South Carolina
Economic impact: $16.6 billion*
Labor income: $1.8 billion*
*Figures combine direct, indirect and induced impacts.
Source: Moore School of Business, University of South Carolina
BMW has been dubbed a major economic engine for South Carolina, ushering in dozens of new manufacturers and bolstering the amount of cargo flowing through the Port of Charleston.
And now the luxury carmaker has plans to expand production and create 800 more jobs at its Spartanburg County campus by adding the new X7 crossover model to its lineup of South Carolina-made vehicles, a plan that will likely do even more for the state.
"BMW is a big creator," said Doug Woodward, research economist at the University's South Carolina's Moore School of Business. "In addition to the jobs it creates, the company contributes to our tax base, and if you look at the Upstate, it has meant major growth in education too."
Woodward is writing a detailed report that will analyze how BMW impacts South Carolina; he expects it to be released later this year.
A recently updated fact sheet by the Moore School of Business said BMW Group has a $16.6 billion annual impact on the state economy, supporting more than 30,000 jobs throughout the state.
The document also concluded that with every job created at the BMW plant, an additional three jobs are created elsewhere in South Carolina through the economic multiplier effect.
The Munich-based company opened its campus in Greer 20 years ago this fall.
The company has already invested $6.3 billion into its Upstate campus that employs about 7,000 workers.
The Spartanburg campus already makes the X3, X4, X5 and X6 sport utility vehicles. The X7 will be larger than the other models and accommodate up to seven passengers in three rows of seating. It will be the largest SUV that BMW has ever made.
The expansion plans are an additional $1 billion investment, which is expected to increase BMW's annual production to about 450,000 vehicles from roughly 300,000 now. That would make the Greer factory the busiest factory within BMW when X7 production begins by the end of 2016, company officials have said.
"Our recent $1 billion investment is not only a great announcement for BMW, but it sustains the ripple effect across the state that has continued since 1992 when BMW first made its home in South Carolina," BMW spokeswoman Sky Foster said in an email.
Experts agree, saying the expansion will spur growth in many manufacturing jobs in the state, especially companies that supply materials for BMW to produce vehicles.
"This will grow the supplier base they have brought into the state," Woodward said. "The multiplier factor could grow larger even though it is already large now."
More manufacturers are also expected to set up operations in South Carolina with hopes to become suppliers for BMW, said Carter Smith, Executive Vice President, Spartanburg Economic Futures Group.
"Depending on specifics of products, we see new companies come in the marketplace to be suppliers," he said.
An example of BMW's influence is metal parts manufacturer VCI-SC Inc., a Michigan-based company that announced plans in 2011 to establish a new facility in Pickens County.
Officials said then that the $2 million investment places operations closer to some of its customers in the Palmetto State, including BMW.
BMW continues to bolster the state automotive cluster, which includes tire makers like Michelin and Continental Tires, in addition to companies that supply the materials to produce BMW vehicles, according to the state Department of Commerce.
S.C. Commerce Secretary Bobby Hitt, a former BMW executive, said BMW has been a "catalyst in growth."
"BMW has acted as a catalyst in the state's auto industry growth, which has quadrupled in just 20 years," he said. "That sector today extends beyond the Upstate to more than 250 firms in 38 of the state's 46 counties."
Wells Fargo senior economist Mark Vitner of Charlotte has said BMW shows South Carolina's potential, and that in turn has helped bring in other manufacturers, including aerospace giant Boeing.
"BMW's success in operating in the state has also helped service notice to manufacturers all over the world that you can build a competitively priced world class product in South Carolina," he said.
A similar scenario has played out in Alabama, which houses vehicle production campuses for carmakers such as Mercedes-Benz, Hyundai, Honda and Toyota. Officials there have touted the automakers as helping to swell a network of suppliers in the state.
As for Charleston, BMW's billion-dollar expansion is expected to mean more business for Port of Charleston. BMW ships most of its export vehicles to Charleston by rail.
The State Ports Authority's Columbus Street Terminal in downtown Charleston is where BMW exports about 70 percent of its Upstate-made vehicles to more than 100 overseas destinations. The expansion is expected to increase BMW's outbound shipments by 40 percent, according to Jim Newsome, president and CEO of the SPA.
Newsome said the Columbus Street Terminal could see about 90,000 more vehicles come its way, meaning more frequent ship calls.
The company's needs have already prompted expansions by the State Ports Authority.
BMW was a key factor when the authority recently opened its inland port rail yard near Greenville-Spartanburg International Airport.
The facility led to BMW building a 413,000-square-foot new export center nearby. The inland port allows BMW to haul imported auto parts from Charleston by rail instead of by truck along Interstate 26.
Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.
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