NORTH CHARLESTON, South Carolina -- Daimler's commercial van factory here will soon go from needing almost nothing from North American suppliers to needing an entire supply chain of local parts.
Daimler is investing $500 million to transform basically a kit factory into a bona fide vehicle assembly operation that will pull together body panels, axles, windshields, seats, electronics and the rest.
Until now, the North Charleston plant has been what U.S. labor leaders and foreign trade critics used to dismissively refer to as a "screwdriver factory" -- with no opportunity for U.S. parts or technology. Large cartons of disassembled Sprinter and Metris vans were brought in and were reassembled using parts made mostly in Germany.
That will soon change.
To stoke U.S. sales of Mercedes-Benz commercial vans, Daimler is shifting its van production from Germany to South Carolina -- even though the North Charleston factory was already "assembling" the same vans. The expanded plant will dwarf the existing one, receiving a paint shop, new assembly lines and large-scale marshaling and logistics centers.
Until now, North American suppliers have had few opportunities, except for fluids and some batteries.
The enlarged plant will source stamped, unpainted body panels that will need to be assembled and painted locally. Mercedes executives are reluctant to identify which components are most likely to be first for local sourcing. But they acknowledge that the enlarged Sprinter plant will require the same sort of just-in-time supply chain that other automakers have. Those components are typically the largest and bulkiest parts of the vehicle, and the most delicate to ship -- including seats, headliners, cockpits and front-end modules.
While staying mum on the details, Mercedes officials estimated that the launch of the enlarged plant will generate 400 local supplier jobs.
Frank Klein, head of worldwide operations for Mercedes-Benz Vans, said the Sprinter supply chain also will include local upfitter work.