Volvo CEO: South Carolina plant a long-term commitment to this region

Lex Kerssemakers was promoted to president and CEO of Volvo Cars North America in January.

The Volvo cars plant opening sometime in 2018 in Berkeley County will be a key part of the Swedish automaker’s extensive image overhaul, producing vehicles that won’t be made anywhere else in the world, the company’s head of American operations said.

“We are revitalizing the brand totally, and that revitalization program is very much based on new products,” Lex Kerssemakers, president and CEO of Volvo Cars North America, told The Post and Courier in an exclusive interview after Volvo chose South Carolina on Monday as the site for its newest manufacturing facility.

Kerssemakers said he was impressed with South Carolina’s workforce training system — through the state’s technical colleges — as well as infrastructure near the Camp Hall Industrial Campus site, such as Interstate 26 and the Port of Charleston, which will be less than 30 miles away on a new rail line to be built for Volvo.

In addition, Kerssemakers said the state’s industrial recruiters — in particular Commerce Secretary Bobby Hitt, a former BMW executive — have “a level of business acumen that’s based on experience, and we noticed that.”

It all added up to Berkeley County being the place where Volvo expects to jumpstart its American presence.

Volvo will launch 14 new products over the next four years, with the South Carolina plant making at least two of them when production begins in late 2018.

“There will be cars where South Carolina is the only place in the world where that nameplate is going to be produced,” Kerssemakers said, adding that some of those vehicles will be exported while the rest are sold in the U.S.

“We are definitely going to export cars, and that’s why the port played such an important role,” he said.

Kerssemakers took a few minutes Monday to answer questions about the Berkeley County site and Volvo’s future in South Carolina.

Q: What were some of the deciding factors in your company’s decision to locate in South Carolina?

A: We started the process probably three-quarters of a year ago, where we evaluated a number of states, and in the very late phase it boiled down to South Carolina and Georgia. At the end, of course, one of the major criteria is accessibility overseas. There must be a harbor and all states had to fulfill that criteria. We felt very comfortable with South Carolina. We had very good and professional dialogues with them (state officials) and we really appreciated the entrepreneurial way they approached this. And South Carolina has had very good experience with another premium (automobile) brand with BMW.

Q: The Charleston region is becoming a manufacturing hub, with Boeing Co., Daimler, now Volvo and others. Any concerns about finding a qualified workforce?

A: We expect to draw workers from a 50-to-75-mile radius. What we have learned is that South Carolina is still growing. It’s one of the top 10 states in population growth. So we are confident that we will find an adequate number of workers. And on top of that, South Carolina is well-known to have a very good technical college system, which will help us to identify workers and, more importantly, train them.

Q: Did South Carolina’s status as a right-to-work state play a role in your decision?

A: No, not really. I mean, we are used to different (labor) situations because we have factories in Europe and China. We believe we are a very good employer. So, no.

Q: In addition to exporting vehicles, will Volvo be importing parts? Will the supply chain be overseas or mostly based in America?

A: We have a global footprint with respect to our suppliers and there are a number of U.S. suppliers in that portfolio. In the end, it will be a mixture of import and locally produced, It’s very difficult at this point to be more specific, but it will be a mixture.

Q: Did you consider, like some other automobile manufacturers, locating your North American plant in Mexico instead of the United States?

A: Absolutely, we definitely considered Mexico. But putting all the pros and cons together and considering the fact that this is our first factory in the American region, we decided to put it in South Carolina. If we look at the total picture, we feel very comfortable with that choice.

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Q: Which models will be produced in South Carolina?

A: We are still working on the details. All of our new models are based on what we call our scaleable product architecture. It’s a platform-like approach which is called SPA, and all of the top hats will be built on that platform. What car will be first? We are still having those discussions.

Q: Will the cars be built from scratch here or will they be partly pre-assembled overseas for final assembly in the U.S.?

A: This is a full factory. The only thing we do is that we stamp our sheet metal in Sweden, meaning doors and fenders. We do not foresee having a stamping facility (in the U.S.). But for the rest, it is a full factory including paint shop and everything.

Q: What message should Volvo’s decision to locate in South Carolina send to residents, both of the state and of the Berkeley County area where the plant will be built?

A: I understand that Gov. Haley has been pretty excited about the arrival of Volvo, but I must say that most likely we are equally excited. This is a major step for Volvo. We are celebrating our 60th anniversary in the United States. The United States is an extremely important market for us and putting a factory here is literally a commitment from our side to another 60 years. You don’t build a factory for 10 or 15 years. It’s a very long-term investment, and I personally am happy to be a part of that journey. I hope it gives a very clear signal to our U.S. customers that they can rely on Volvo for many, many years.

Reach David Wren at 937-5550 or on Twitter at @David_Wren_