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BMW at 20: Plant exceeds hopes, tax debate ongoing

Published on NewsOK Modified: December 23, 2012 at 4:52 pm •  Published: December 23, 2012
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GREER, S.C. (AP) — Two decades ago, then-South Carolina Gov. Carroll Campbell stood at the Greenville-Spartanburg airport and announced that a BMW plant being built just up the road would be a benchmark in the history of the state.

By most measures, the German automaker's plant near Greer has exceeded some lofty expectations. BMW officials said they expected the plant to have 2,000 workers and make 6,500 luxury vehicles a month. In November, the factory's 7,000 employees produced more than 25,000 of BMW's crossover vehicles, which are a mix of an SUV and a coupe. In 20 years, BMW has invested $6 billion in South Carolina, an amount nearly equal to the state budget proposed by Gov. Nikki Haley this month.

"They never stopped building the plant. It has been a continuing expansion," said Bruce Yandle, an economics professor emeritus at Clemson University.

BMW is now as much a part of modern South Carolina culture as barbecue buffets and The Shag, so much so that politicians have been chasing the next BMW ever since.

But some say that pursuit has had its drawbacks. BMW received hundreds of millions of dollars in public money and tax breaks. While that investment appears to have paid off, it also led to an often-cash-strapped state providing millions more in taxpayer money to hundreds of other companies — most of it without much public oversight — making it nearly impossible to judge the quality of these public investments.

Officials say BMW's success is evident. A parade of suppliers followed the German automaker's plant, and a University of South Carolina study found BMW and the plants that supply the parts to make the vehicles account for more than 1 percent of the state's nearly 2 million workers.

The automaker gave $10 million to help Clemson establish its International Center for Automotive Research. The auto plant just off Interstate 85 might be the most recognizable landmark between Atlanta and Charlotte, N.C.

"I couldn't even begin to quantify what their presence has meant. Obviously, their impact touches so many different areas," Greer Mayor Rick Danner said.

BMW said it had no plans to mark the 20th anniversary of the announcement and groundbreaking. Instead, the company celebrated last January when its 2 millionth vehicle came off the production line. It also announced yet another expansion, worth $900 million and 300 new jobs.

Campbell, who was governor from 1987 to 1995 and died in 2005, doggedly pursued BMW over several years. A flurry of faxes at all times of the day and night between Germany and South Carolina secured the deal in June 1992, with Campbell celebrating by climbing into one of the company's luxury sedan's with a "BMW 1" license plate. BMW liked the land and tax breaks offered by the pro-business state along with its easy access to interstates and the port in Charleston.

South Carolina beat out Nebraska, whose governor at the time complained that he "couldn't move the Atlantic Ocean." The observation has been on the mark. BMW currently exports 70 percent of the vehicles made in South Carolina, with most of them heading out to sea on cargo ships.

BMW's decision wasn't met with all praise, especially outside the state. Plenty of people in the U.S. were already angry about manufacturing jobs going overseas for lower wages, and some suggested a plum manufacturer like BMW picked South Carolina because its people would work cheap. The state's right-to-work law also meant employees were not required to join labor unions.

"South Carolina was to the Germans the state that bore the closest resemblance to Mexico," a columnist in the New York-area paper Newsday wrote.

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