BMW begins manufacturing third-generation X5 in South Carolina

Staff Report
Published Aug. 7, 2013

GREER, S.C. — Production of the third-generation BMW X5, which was launched last week, marks another key milestone in the 21-year history of the German automaker’s South Carolina operation.

BMW began making the X5, a mid-sized luxury SUV, in 1999 – seven years after the company announced plans to build a facility in the Upstate, said Josef Kerscher, president of BMW Manufacturing.

“The X5 has been a significant contributor to the Spartanburg plant’s global success,” said Kerscher, who will be leaving the South Carolina plant Nov. 1 to assume new responsibilities as managing director of BMW Plant Dingolfing in Bavaria, Germany.

Carolyn Tate, an employee at BMW’s South Carolina plant, performs a quality inspection of the new X5. (Photo/Provided)
Carolyn Tate, an employee at BMW’s South Carolina plant, performs a quality inspection of the new X5. (Photo/Provided)
“Our team will continue to build the next-generation X5 with the superior quality that our customers around the world have come to expect from South Carolina,” Kerscher said.

Kerscher’s remark offers an endorsement of the quality of the state’s workforce and its ability make complex machines such as cars and airplanes, said S.C. Commerce Secretary Bobby Hitt, who worked for BMW before leading the Commerce Department.

“While our state has always been good at making things, in the last 20 years, we have reached a new level of complexity and significance through advanced manufacturing,” Hitt said in the agency’s weekly newsletter. “This trend is largely due to what I call the BMW effect. Since setting up shop in 1992, BMW has helped to nearly quadruple South Carolina’s automotive industry.”

Since 1992, BMW has invested more than $5 billion in its South Carolina operation and about 50 of the company’s 170 North American suppliers have located in the state.

Originally projected to provide 2,000 jobs, BMW Manufacturing has more than 7,000 workers who report to the plant. Another 16,000 people work for suppliers who moved to South Carolina.

A 2008 study by the Darla Moore School of Business at the University of South Carolina estimated that BMW annually pumps $8.8 billion into the state’s economy, leading to the creation statewide of 4.3 jobs for every job created at the Upstate factory.

BMW’s decision to come to South Carolina was the beginning of a trend of automotive manufacturing moving into the Southeast.

In 1993, Mercedes-Benz followed BMW into the region, establishing a manufacturing operation in Tuscaloosa County, Ala. In April, Toyota announced plans to build the Lexus ES 350 model at its plant in Lexington, Ky.

The first new third-generation X5 to roll off the assembly line on Aug. 1 was a mineral white M50d, a six-cylinder inline diesel engine that will be exported to a dealer in Eastern Europe.

The final second-generation X5 was produced at the plant June 28 and will become part of the permanent BMW historic car collection.

Between September 2006 and June 2013, the plant in Spartanburg County produced 728,107 second-generation X5 models, making the model series the best-selling in the history of the plant.

More than 1.3 million first- and second-generation X5s have been produced at the S.C. facility. The Spartanburg plant is completing a major $900 million expansion to increase production capacity to 350,000 vehicles per year and to prepare for the launch of an entirely new vehicle, the X4 in 2014. About 70% of the plant’s annual output is shipped to 140 global markets.

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