Years before tariffs started making daily headlines, a little-known import duty called the "chicken tax" convinced Mercedes-Benz Vans to build its first full-fledged U.S. manufacturing campus in North Charleston.
The $500 million facility, located in Palmetto Commerce Park, officially opens Wednesday with production of the company's third-generation Sprinter commercial van. The site eventually will employ 1,300 workers building as many as 40,000 vans per year for the U.S. market.
But the German vehicle maker's operations in North Charleston are hardly new. Vans have been assembled there since 2006.
And that's where the "chicken tax" comes in.
The tax started in 1963, when President Lyndon Johnson slapped a 25 percent import fee on light-duty trucks made in Europe and shipped to the United States. The tariff was in retaliation for similar fees the Europeans had placed on U.S. poultry exports.
The European poultry tariff has long since expired, but the tax on trucks lives on. To get around it, Mercedes-Benz Vans has been re-assembling its German-made vans in North Charleston for more than a decade.
Until now, all Sprinter vans sold in America have been built and tested in Germany and then disassembled and sent to the Port of Charleston, with the body and engine arriving on separate ships.
It was a financially necessary "logistics nightmare," according to Volker Mornhinweg, head of the Dusseldorf-based van maker.
But as Sprinter sales in the U.S. rose — from 8,559 in 2010 to 28,519 by 2015, marking five consecutive years of record growth — Mornhinweg saw an opportunity to remove the "chicken tax" from the manufacturing equation by expanding the North Charleston assembly site into a place that would build vans from scratch.
"We saw five years in a row we have growth, and we see that customers are really key to have these kinds of products," Mornhinweg told The Post and Courier during the expansion groundbreaking in 2016. "We see appropriate growth in North American markets, and that gave us the clear belief that now the time is mature" for a new manufacturing plant.
Michael Balke moved from Germany to South Carolina in late 2015 to oversee the North Charleston plant and its new body shop, paint shop and expanded assembly and administration buildings — more than tripling the facility's size.
Balke and Mornhinweg will be among the speakers at Wednesday's event, along with Gov. Henry McMaster and a special guest that company spokeswoman Alyssa Bean declined to identify.
The redesigned Sprinter that will be built in North Charleston will feature Internet connectivity, fleet management software and other modern features. It will have a base price of about $25,000 and will be available in more than 1,700 configurations that can be customized for specific commercial uses.
Mercedes-Benz Vans also is attracting suppliers to the area, such as automotive seat maker Isringhausen and transportation and logistics firm Kuehne + Nagel which, combined, will hire more than 300 workers.
Mercedes-Benz Vans and its suppliers are part of South Carolina's growing automotive sector, which also includes a BMW plant in Spartanburg County and a Volvo Cars manufacturing site in Berkeley County that began producing S60 sedans last week.
All told, the state's automotive industry accounts for 66,000 jobs and $27 billion in annual economic impact, according to the state's Commerce Department.