Volvo Cars announced Monday that it will build a $500 million plant — its first in the U.S. — and eventually employ up to 4,000 people at the Berkley County site, about 30 miles northwest of Charleston.
Volvo is the third foreign automaker to put a U.S. plant in South Carolina. BMW led the way for manufacturing on American soil when it built a plant in Greer more than 20 years ago. Daimler AG is building its Sprinter vans at a plant about 15 miles down Interstate 26 in Ladson.
In the past two decades, Nissan has built plants in Tennessee and Mississippi; Kia in Georgia; Volkswagen in Tennessee; and Honda, Mercedes-Benz and Hyundai in Alabama.
Volvo Cars liked that South Carolina already had auto suppliers to the BMW and Sprinter van plants in place, South Carolina Commerce Secretary Bobby Hitt said.
The company also was impressed by the worker training programs in place for Boeing, which started building its 787 jumbo jets near Charleston in 2011, Gov. Nikki Haley said Monday at an announcement outside the Governor's Mansion.
"What I believe won Volvo Cars for South Carolina was our workers. They saw the fact this is a state where we build planes," Haley said.
The state plans to borrow about $150 million to build the site and a new interchange on Interstate 26, Hitt said.
Georgia offered Volvo a site near Savannah and has been pushing hard to get more automakers. The Georgia Legislature offered $1.3 million in tax breaks to Mercedes-Benz in a chaotic final day of its session in April. It wasn't clear what Georgia offered Volvo or why the company passed over the state.
Volvo Cars of North America President and CEO Lex Kerssemakers wouldn't go into specifics about Georgia or the other three states that lost.
"The reason we came to South Carolina is accessibility. We want to be very close to the sea. We will export those cars," Kerssemakers said in a phone interview.
The plant is initially expected to make about 100,000 vehicles a year, with the first ones ready in 2018, according to Volvo. It expects to employ about 2,000 people over the next decade. That could grow to 4,000 workers eventually.
Volvo is struggling in the U.S. market. The automaker sold just 56,000 vehicles in the U.S. in 2014, for a 0.3 per cent share of the American market and a continuation of a generation-long decline. In contrast, BMW sells about 25,000 vehicles a month in the country.
Kerssemakers said the automaker will manufacture a new model of Volvo in South Carolina as it continues to transform under the leadership of Chinese company Geely, which bought the Volvo brand in 2010.
Monday's announcement was more good news for Haley, who ran in 2010 on a promise of bringing more jobs to South Carolina and won re-election last year on her economic development record. The unemployment rate in the state has dropped from 10.5 per cent to 6.6 per cent since Haley took office.
Haley and her economic development team push hard for foreign companies. The state has become the nation's top tire manufacturer by getting Bridgestone in Japan, Michelin in France, Continental in Germany and Giti out of Singapore to build in the state. About 100,000 tires a day roll off South Carolina lines, with capacity expected to grow over the next several years, according to Tire Business magazine.
The governor gets the jobs by stressing the small percentage of union workers, lower wages, low energy prices and access to deep water ports.
"South Carolina has become a leading light when it comes to 'made in America,'" Haley said. "It's not just tires and cars and carbon fibers that we're recruiting. It's flat-screen TVs and bikes."
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