BMW’s U.S. factory in Spartanburg, South Carolina, has altered so much since I visited it nearly 20 years ago that the only way I recognized it was because of the company logo.
The factory has changed from being a small plant building a niche roadster into the global production base for all BMW SUVs, apart from the German-built X1.
By the end of 2016, Spartanburg will overtake the Dingolfing plant in Bavaria, Germany, to become BMW’s biggest global factory. It will have an annual capacity of 450,000, up from forecast output of 350,000 units this year. Dingolfing built 342,000 cars last year.
When I first visited the plant in 1995, Spartanburg had just begun producing the model it was designed for, the Z3 roadster. Capacity was barely 100,000 units a year. At the time I felt that the Z3 and the factory were an oddity: a U.S. plant building small volumes for global markets did not make sense.
Germany’s currency at the time, the Deutsche Mark, was strong so that producing in U.S. dollars gave BMW some natural hedging on currency fluctuations but I was missing the big picture.
The factory’s transformation started in 1999 when it become the production base for X models, first the X5, than the X6 in 2007. X3 production was transferred to Spartanburg from Germany with the launch of the second generation in 2010 and the new X4 was added earlier this year. The factory is currently being tooled up for the X6 and a larger, seven-seat X7 will top the range in 2017.
Today, Spartanburg is massive and impressive. It has three body shops and two paint shops, along with two giant final assembly lines and 8,000 workers working hard. The plant runs two 10-hour shifts on six days a week, for a daily output of about 1,100 units now and a target to grow to about 1,500 to reach full capacity.
The factory is also very special to BMW CEO Norbert Reithofer, who was the plant manager here when pilot production began 20 years ago, assembling 318i sedans for the U.S. market.
Reithofer had the vision to transform Spartanburg into one of the world’s largest SUV production hubs. The strategy is paying off for BMW, but Spartanburg is also significant for the U.S. economy. It exports an average of 70 percent of its annual production with a 2013 value of more than $7.5 billion, which, according to the U.S. Department of Commerce, makes BMW the largest U.S. vehicle exporter to non-NAFTA countries.