By the time the current decade comes to a close, Mercedes-Benz expects to be building, from scratch, a substantial number of its popular Sprinter vans in North Charleston rather than re-assembling vehicles shipped from its headquarters in Germany.
For more than 10 years, Mercedes-Benz has been avoiding a 25 percent tariff by building the commercial vehicles in Dusseldorf and Ludwigsfelde, partially dismantling them and sending them on their way to its North Charleston plant to be put back together and sold in the United States, Canada and Mexico.
On July 27, Mercedes launched a $500 million investment in the Lowcountry, breaking ground on a 1.1-million-square-foot production facility that will include a 2.8-million-square-foot marshaling yard for completed vehicles. The groundbreaking ceremony featured presentations by top Mercedes executives and an array of state and local officials, including Gov. Nikki Haley, U.S. Sen. Lindsey Graham, North Charleston Mayor Keith Summey, and Charleston County Council Chair Elliott Summey.
“We’re taking a big leap into the future,” Volker Mornhinweg, head of Mercedes-Benz Vans, told his audience, which included many of the 200 people already working at the company’s 10-year-old North Charleston facility. “This will be one of the most advanced production sites in North America.”
Haley also was optimistic, considering the 1,300 jobs the new Mercedes plant will bring to South Carolina, along with an additional 400 jobs that are expected to be available with suppliers that locate near the new facility.
“The idea that Mercedes-Benz chose South Carolina is a huge thing for the state of South Carolina,” the governor said. “Every part of this company is committed to every customer they’ve ever had. It’s our job is to wrap our arms around this company and not let go.”
Frank Klein, head of operations for Mercedes-Benz Vans, said a large number of the 1,300 people the company hires for its new North Charleston plant will be in production. He said wages will be comparable to those being paid by other companies in the region.
“We have to be competitive to have the best people,” he pointed out. “We are looking for highly motivated people.”
Michael Balke, incoming chief executive officer of Mercedes-Benz Vans and director of production at the plant, said the company has a low turnover rate in North Charleston. He expects the same when the new state-of-the-art production facility is completed. He added that the company has already started recruiting and training administrative employees and technical specialists and pointed out that applications for production jobs will be accepted sometime around the middle of 2017.
Balke said one reason Mercedes-Benz chose to build the new plant in North Charleston is the Sprinter van’s growing popularity in North America. The company sold 28,600 Sprinters in the United States in 2015, 11 percent more than in 2014. The trend has continued for more than half a decade.
“We’ve had strong growth in the U.S. market. Through June, sales are up 16.5 percent from last year. We’ve had five record years of growth, and we expect another record year in 2016,” he said.
The Sprinter has been a best seller since Mercedes-Benz started building the commercial van in 1995. Sprinters are produced in nine locations throughout the world, in Germany, Spain, Argentina, China, France, and Russia.
Were there other reasons Mercedes-Benz chose the Charleston area for its newest production plant?
“Logistics is a big part,” Mornhinweg said. “The harbor is here. And we already had an operation with 200 well-trained employees here.”
Many of those 1,300 employees will be area residents, and one local university was preparing its students to compete for those jobs long before Mercedes announced that it would build another plant in North Charleston. Realizing the importance of German investment in the Palmetto State, the College of Charleston is helping its students land jobs with Mercedes-Benz and other foreign-based companies that are doing business in South Carolina. According to the South Carolina Department of Commerce, capital investment from German companies has topped the $4.1-billion mark since 2011, creating 9,000 new jobs and providing 27,000 positions for South Carolina residents. Knowing something about the country with the world’s fourth largest gross domestic product helps, according to Morgan Koerner, Ph.D., chair of German and Russian Studies at the College of Charleston.
He pointed out that German is an ideal language for students in fields such as International Business, Supply Chain Management, Finance, Hospitality and Tourism, Management, Marketing, and Economics.
“Having a certain level of proficiency in the German language and culture really gives you an edge in these kinds of jobs,” said Dr. Koerner. “We very much emphasize combining a degree in Business with a minor in German.”
Through a program established by the college in 2003, 92 students have served internships with companies in Germany. Many but not all have been Business majors.
“Our curriculum isn’t only literature,” Dr. Koerner explained. “We get them a sort of skill set and help them get employed.”
Along with the German American Chamber of Commerce of the Southern U.S., the school is hosting the first College of Charleston German-American Business Forum Oct. 6. The event is aimed at bolstering the ties between German companies doing business in the South and undergraduate education in the region and focusing on the workforce needs of German-based companies.
“Our experience has been that learning about German language and culture really does help graduates get their foot in the door,” Dr. Koerner said. “Some of our students have told us that it was their knowledge of German that sealed the deal.”
And what besides the Charleston area’s favorable tax climate, transportation infrastructure, and generally low cost of doing business – according to the South Carolina Department of Commerce – sealed the deal for Mercedes-Benz?
As Graham, a U.S. senator from the Palmetto State since 2003, said during the groundbreaking ceremony: “You’re going to make money in South Carolina. You’ve proven that South Carolina is the place to do business. In South Carolina, we are a ‘yes’ kind of people. Yes we can. Yes we will.”