As Bobby Hitt prepares to mark his fifth anniversary at the helm of the S.C. Department of Commerce, the agency he heads is announcing another year of multibillion-dollar corporate investments — bringing the total to more than $22.5 billion and more than 83,000 jobs during Hitt’s tenure.
Two of this year’s biggest announcements took place in the Charleston region, where Hitt was born.
German automaker Daimler said in March that it will build a Mercedes-Benz Vans plant in North Charleston. Then, about two months later, Swedish automaker Volvo announced it will build its first U.S. manufacturing facility in Berkeley County. Combined, the two projects amount to a $1 billion investment and up to 5,360 new jobs.
A former journalist, Nieman fellow at Harvard University and executive at BMW’s manufacturing plant in Greer, Hitt has been one of South Carolina’s most productive commerce chiefs, with billions worth of new projects and expansions under his watch.
But Hitt — who was appointed to the job in January 2011 by Gov. Nikki Haley — is quick to point out that he hasn’t done it alone. Instead, he credits the success to his 85-member staff and economic development directors working at the local and regional levels.
“Economic development is done at the local level,” Hitt said last week as he prepared to accept an award from the South Carolina Manufacturers Alliance. “Our job is to create a strategy and an environment where they can be successful. We all work as one big team.”
Hitt took time last week to talk with The Post and Courier about his first five years at Commerce and what he hopes the agency can accomplish in the future. The conversation has been edited for brevity.
Q: You’ve had a varied career as a newspaper editor (at The State in Columbia), an executive at BMW and now the state’s Commerce secretary. Is there a common thread in those jobs that has helped you as you make each transition?
A: Somebody asked me the other day about having started my career as a newspaper guy, and since newspaper guys traditionally are sort of anti-government, they said how do you justify running a state agency? My response was that when I was a newspaper guy, we thought our job was to make the government work, and I’m still working on that.
I think the common thread here is government. We’re a small state with a lot of compact relationships and, therefore, we can solve problems. We’re solving them through government.
We at Commerce have developed written, contractual relationships with fellow state agencies so that we’re all looking for a common outcome. For example, our friends at DHEC (the S.C. Department of Health and Environmental Control) are in the office every week looking at our future projects to see how those fit in South Carolina. We’re working with local code people in all of the counties so that when we do win a project we’re able to move at a pretty good pace. You may note that Boeing Co. came in months early and Continental (Tire) came in months early. It’s important not only to recruit projects but to have people who can work through those projects and bring them to fruition.
Q: Is there one project that stands out as a turning point for economic development during your tenure?
A: I would say the one that stood out the most for me was Continental (in Sumter). To bring a third, major tire company (joining Bridgestone and Michelin) into South Carolina was huge. We were in strong competition with our neighboring states and we were able to win it, not because we had more money than anybody else but because we could reduce the risk, our logistics systems and our port systems — all of these worked together to make this the right business model for Continental.
People ask me why we’ve been so successful in tires, what’s the magic behind South Carolina becoming the tire capital of the United States? I say it’s one word: Michelin. They’ve been here for 40 years and have demonstrated repeatedly that this is a great place to build tires.
We’ve trained more than 5,000 tire employees in the last five years or so, so we get it. We know how to help tire companies make good profit. Michelin has invested over $1 billion in the last five years. Of course, we have Bridgestone and now Continental joins the club. And we have Giti Tires in Chester County coming out of the ground as well as a small tire company in Spartanburg called Trelleborg that makes tractor tires.
I think Continental sort of rang the bell for us to get everyone to look at South Carolina.
Q: On the flipside, is there a company that you went after really hard that you didn’t get and, if so, what did that experience teach you?
A: Yeah, I have one that’s still painful to me personally and to my team. It took us a little bit of time to get over it.
We went hard after a Caterpillar plant back in 2012 and we were relatively convinced that we could win that plant. We had a great location and we were very excited about it. In fact, I remember we all had dinner with the chief executive and the governor and we all walked out of there high-fiving each other. The next day they told us they were going to Georgia. We were floored. That was the first time I lost a project that I really felt we would win.
Generally, working with companies is about relationships and working through details. Having had some experience in manufacturing and being able to share the way manufacturers think with my excellent staff, we feel our way through these projects and we have a sense of how we’re doing. In this particular one, we were really surprised.
Part of the way we recovered is that we went after their suppliers. Caterpillar located in Georgia, not too far from the Georgia-South Carolina border, and we were successful in capturing a couple of their suppliers and putting them on the South Carolina side. That sort of made us feel better.
None of us at Commerce likes losing one we think we can win. There’s some that we know we’re not the right fit for and it doesn’t matter what you do, you’re just not the right fit. We play hard for the ones we think are the right fit.
Q: With the state Legislature coming back into session next month, are there any issues you’d like to see lawmakers take up that could help the Commerce Department better do its job?
A: Most of our incentives are designed by statute and by strategy to be aggressive toward manufacturing in that they are focused on landed investment, heavy equipment on the ground, taxation and payroll. One of the other areas that we’re really interested in for diversity of jobs is Class-A offices — research jobs and the like. The issue there is that those jobs don’t have big pieces of expensive equipment on the ground and don’t have the same investment base, but they have a very high payroll. We would like to find a way to create an advantage for us in that area.
We should be able to attract more of the big Class-A, back-office operations that are sophisticated and have a high-dollar salary. We need to continue to work on the diversity of our workforce so that people in all of our density markets have choices. That has a lot to do with what kind of transportation systems are available, what kind of choice properties are available and also the quality of life in our markets.
For example, we’re really excited about that direct flight (from Charleston International) to Seattle, because it opens up another dimension for the Charleston market. I believe there will be some other flight activity announcements out of Charleston and we need to be ready with an incentive package to help us land different types of employers in that market.
Q: How does South Carolina differentiate itself from other states that are competing for the same types of businesses?
A: We compete with our neighboring states — North Carolina and Georgia — very aggressively, but they are very similar to us in that they have many of the same attributes. So we need to find a way to differentiate ourselves in terms, not that we’re intrinsically better than they are, but that we are a better fit for a particular company.
Q: What examples would you point to?
A: Look at Volvo, for instance, right there in your backyard. We were able to help Volvo understand why Charleston is the right megaphone for their marketing side. I told them very directly that you could build a car plant just about anywhere, but every decision our car companies make is really about selling cars. So we were able to convince them that South Carolina is the place where they can do the best job of marketing their cars around the world.
Charleston has close to 5 million tourists a year. At the end of the day, a substantial number of them will drive right by that plant (along I-26). Volvo builds premium cars, and Charleston is a premium market and a premium place. All of those things go together. The notion of an experience and not just a brand is very large. Charleston is an experience. Volvo now becomes a part of that experience and it helps them propel their brand and increase their market share.
This is part of the marketing brand that we (South Carolina) have as well. We’re selling ourselves. We’re selling our experience. We’re selling our know-how. We’re selling our business acumen. And Charleston is a huge player in that, which is really amazing because it wasn’t too long ago that Charleston was a tourism town. It wasn’t a big manufacturing town. And now that’s changed.
Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_