Mercedes-Benz groundbreaking highlights Lowcountry’s fast-growing auto sector

Local, state and Mercedes-Benz Vans officials toss dirt at the end of a groundbreaking ceremony for the company’s new Palmetto Commerce Parkway manufacturing site. The facility will build the popular Sprinter vans.

As Mercedes-Benz prepared to break ground on its new factory in North Charleston last week, company executives and politicians pointed again and again to the back of the room, to the workers already assembling vans here.

Since 2006, the German automaker has built cargo vans in Dusseldorf, disassembled a few systems and sent them here in parts to avoid costly tariffs. A group of about 200 workers puts them back together, spending a few hours to get each vehicle ready to drive.

The company’s new, full-fledged manufacturing campus, tasked with supplying America’s growing demand for Sprinter vans, will have far more extensive work — and far more employees. Executives say it could eventually employ as many as 1,300 people, and it’ll start taking applications toward the middle of 2017.

That’s a big boost for the region’s manufacturing sector. About 11,000 people in the Lowcountry worked last year in the business of building cars and planes, a number that has roughly doubled over the past decade, according to the U.S. Department of Labor.

Mercedes-Benz’s factory alone would represent a 12 percent increase, not counting the added boost of suppliers that may move to the area to court the factory’s business. The company says it expects suppliers like the Auto Truck Group and Knapheide Manufacturing Co. will hire 400 employees of their own.

“The supplier base locally will increase over the years,” said Frank Klein, head of operations for Mercedes-Benz Vans. “Over the years of continuous production, we will see more and more suppliers moving into this area.”

But in the past, automakers’ arrivals have led to even larger gains, said University of South Carolina economist Joey Von Nessen, who has studied the industry’s impact on the state. Car manufacturers tend to send especially large ripples through the economy, multiplying the number of jobs they create by about four.

“I hear 1,300, and I think 5,200 statewide,” Von Nessen said of the Mercedes-Benz jobs figure. “We get this enormous additional benefit, and the automotive sector has an ability to scale up employment in ways that virtually no other industry in the state can.”

That impact will be compounded by the arrival of Volvo, which is opening its first North American factory in Berkeley County. That factory, expected to start producing cars in 2018, will hire 2,000 people within a decade, and it’s expected to eventually employ 4,000 employees.

The two projects will have the effect of shifting the core of South Carolina’s auto sector closer to the Lowcountry, a mantle long held by the Upstate and its BMW and Michelin operations. And factory openings like those have grown concerns about the Lowcountry’s ability to supply the growing manufacturing sector with homegrown talent.

State and local groups have ramped up their efforts in recent years to steer young people toward manufacturing jobs — and to shake their reputation as dirty and underpaid. For their part, state officials including Gov. Nikki Haley say they’re not worried about filling the openings, saying they haven’t had issues doing so in the past.

“It’s phased in,” Commerce Secretary Bobby Hitt said. “It’s not all at one time. It’s done on several years.”

Mercedes-Benz will work to lure employees with “very competitive” salaries, though executives wouldn’t say how much they expect to pay workers. Michael Balke, who will run the factory, said the company was encouraged by the low turnover rate it’s seen with its employees here so far, suggesting it’ll be able to recruit effectively.

The pair of projects also means the region will need to grow a workforce trained to build cars and auto parts. The state will provide training programs specific to Mercedes-Benz and Volvo, Haley said Wednesday, with plans to send officials to their factories overseas to learn the companies’ existing processes.

Those training programs are still being designed, so the timeline and cost of running them hasn’t been set yet, said Brad Neese, associate vice president of economic development for the S.C. Technical College System. But Neese said they expect to start recruiting workers for Mercedes-Benz later this summer or early this fall and for Volvo in fall 2017.

And Mercedes-Benz executives say they’re not too worried about how much training and education their new workers have when they’re hired. They say the company will hire and train its employees in-house well before vans start rolling off the assembly line, expected sometime by the end of the decade.

“For us, the qualification level to begin with is not the key success factor,” Klein said. “We will hire the people way before we actually build the first product in the new plant, and we will qualify them here.”

Reach Thad Moore at 843-937-5703 or on Twitter @thadmoore.