With his co-workers cheering, Gaffney native Ryan Childers slid behind the wheel and drove the first BMW built in the United States off the assembly line. The date was Sept. 8, 1994. The car was a white 318i. And Ryan remembers feeling proud after the long hours and hard work he and the rest of the production team had put in. He also remembers another feeling, one of possibility. “I really had a sense that this was the start of something special. That may sound strange, but I felt like bigger and better things were on the way, that was for sure.”
BMW has proven to be bigger and better than anyone associated with bringing it to the state could have expected. The Spartanburg plant makes 1,500 vehicles each day. Its annual economic impact on the United States totals more than $43 billion. BMW has also changed the way the world sees South Carolina — and how the state approaches economic development.
A New Type of Industry
For many people in South Carolina, that first BMW sedan represented a huge win, an economic development comeback story.
“At that time, we were going through a real economic change, particularly because of reductions in the textile industry. We’d lost tens of thousands of jobs,” says John Lummus, president and CEO of the Upstate SC Alliance. “BMW was seen as a savior. But the impact it would have over the next 25 years could not have been imagined.”
Still, in the early 1990s, not everyone was convinced the state should offer economic incentives to bring the German carmaker to South Carolina.
“The BMW deal was controversial when it came in,” recalls Doug Woodward, a professor and director of research with the University of South Carolina’s Darla Moore School of Business. Doug has taken an extensive look at the impact of BMW on the state and national economies. “There were people who said it was wrong. Within a couple of years, they stopped saying it.”
But BMW was not the first automobile manufacturer in South Carolina. In the early 20th century, the Anderson Motor Company, located in Rock Hill, produced cars. An example of one is on permanent display at the South Carolina State Museum. Seventy years after Anderson ceased production, BMW came to South Carolina, attracted by access to the port in Charleston and by a talented workforce with manufacturing know-how gained from the textile industry.
Ryan remembers seeing the BMW announcement on television news and soon after ads for employment in the local newspaper. He had recently graduated from college with a degree in education. He was expecting to teach and coach, but he had always been mechanically inclined. “I thought this was a premium company. This was an opportunity to get in on the ground floor. I felt like this would be a company I could grow with.”
When BMW made its initial deal to build on land beside I-85 in the Upstate, the plant created 600 new jobs. BMW also promised to hire 2,000 people by the year 2000 and attract nine suppliers to support their production lines.
Ryan was one of the first 30 people selected to work in production. He learned BMW processes in Germany and returned to train new hires. “I don’t think any of us foresaw the growth. We expected it to grow, but not at this magnitude.”
Today, the company employs 11,000 people who come from 25 of the state’s 46 counties. And that’s just the beginning of the positive changes rippling out from one automobile manufacturer.
“An auto plant has the largest multiplier effect of any major economic development activity we could find,” says Doug.
One is the creation of an automotive cluster, which includes businesses that supply everything from tires to the electronic parts required to build a vehicle.
Those suppliers, in turn, make the state more attractive to automobile manufacturers, namely Volvo and Mercedes-Benz. Volvo began production at a plant in Summerville in 2018. Mercedes-Benz Vans also went into production the same year at a plant in North Charleston. Demand from these two manufacturers will further ramp up production in the automotive supply chain.
All that demand leads to even more jobs. A 2017 report from the Darla Moore School of Business determined that BMW provides a statewide employment multiplier of 4. That means that for every one job created at the Spartanburg plant, another three jobs are created elsewhere in the state.
Are we now putting too much emphasis on automobile manufacturing? Doug says no. He projects South Carolina to have a long and promising relationship with auto manufacturing. “Once they’re clustered here, it’s not easy to uproot them. The future looks very bright for the next two or three decades.”
A Major Player in a Global Marketplace
While other foreign companies had succeeded in the state in the past, BMW made South Carolina a part of the global marketplace on a much larger scale. “I don’t know that the average person understands how globally connected South Carolina is,” says John.
Now more than 500 international companies are located in the Upstate, 139 of those German. “German companies know about BMW,” John says. “When you say BMW has chosen to work in your state, they listen.”
That means South Carolinians need to listen to talk about the global marketplace. “We hear a lot about tariffs and trade,” he says, “and don’t realize how much that impacts South Carolina.”
BMW exports 70 percent of the vehicles made in Spartanburg to more than 125 countries, making South Carolina the largest automotive exporter from the United States to the world by value, at nearly $8.5 billion in 2018.
It is just one of many companies in the state taking advantage of Charleston’s deepwater port and access to markets around the world. South Carolina is now the No. 1 tire producer and exporter in the country.
“We export so much, and the trade and tariff issues are very important to us,” says John.
“And the supply chain is global,” adds Doug. “We’re part of this global network of production, distribution, and consumers.”
While more jobs are the obvious return on BMWs investments here, other benefits can be documented around the state. “When we get one of these big auto plants, they can have long lasting and very large impacts with spillover benefits for everybody,” Doug says.
Those include more tax revenue. John cites the taxes BMW’s workforce is paying on $1.8 billion in labor income as just one example.
Other benefits are generated by BMW’s commitment to community programs and sustainability that should not be overlooked, says Doug.
Between 1996 and 2014, the company gave $36 million to educational, cultural, and civic programs in the Upstate. In 2018, BMW provided $1 million for the International African American Museum being built in Charleston.
Through its nonprofit foundation, the BMW Charity Pro-Am golf tournament has not only become a multi-million dollar fundraiser for regional charities, but it also generates substantial tourism dollars and supports 140 jobs.
BMW’s environmental stewardship has led to wide-ranging initiatives from increasing green energy use to reducing waste. The plant generates half of its electricity by using methane gas captured from a nearby landfill. Innovations in the paint shop have cut electricity use by 30 percent and dramatically reduced wastewater.
Education has also gotten a boost. Clemson University is home to the International Center for Automotive Research, the country’s only graduate department of automotive engineering, while the state’s technical colleges train the production workforce.
Ryan, now a member of the human resources team, has combined his vehicle production line experience with his original interest in teaching. He helped launch BMW Scholars in 2011.
Using the apprentice programs found in Germany as its model, BMW Scholars provides hands-on training, paid employment, and tuition assistance to students pursuing associate degrees at four technical colleges. The program expanded the number of apprentices to 200 in 2018.
“The best way to tell an economic development story is by who has come to your community and been successful,” says John. “BMW has shown international companies that they could be successful and that the best brand of cars in the world is made here.”
While the Columbia area has experienced benefits from BMW indirectly, Doug is eager to see the region land a major company of its own. “How can the Midlands get in on the action? That’s a big question our whole community should be debating,” he says. “We didn’t have the textile cluster like the Upstate did. That helped them. Our main asset is the university, and we need to leverage that asset and step up our game.”
Ryan has experienced how one company entering a community can lead to so much more. When he first joined BMW back in 1994, he says the drive to work from Gaffney took him past peach farms, apple orchards, and empty tracts of land along I-85. These days, he makes the same drive and sees an interstate lined with companies that followed BMW to the Upstate.
“Between Charlotte and Greenville, it’s just been transformed,” Ryan says. “So many suppliers and so many jobs have been added. It’s a dramatic change I’ve witnessed over the past 26 years.”
The Next 25 Years
Back in September at the 25th anniversary celebration, Ryan helped BMW Manufacturing President and CEO Knudt Flor unveil a new vehicle: a red, white, and blue X7 emblazoned with the 25-year totals for vehicles produced and vehicles exported.
He also took some time to scan the body of that first BMW he drove off the assembly line, looking for his name. He and the other employees who built it had signed it back in 1994.
“It was a proud moment for me, the organization, and all the associates who built that car,” Ryan says. “Time really flies. Twenty-five years went by fast.”
As BMW looks ahead to changing technology and new market demands, it continues to expand the Spartanburg plant. A $600 million investment announced in 2017 is already helping the plant produce a new generation of X model sport utility vehicles, including two plug-in hybrid electric vehicles. That investment includes the addition of 1,000 jobs through 2021.