It wouldn’t be a normal week, or day, if President Trump didn’t ruffle feathers. Here’s one affecting the auto world: In a meeting with top European Union leaders, Trump is said to have criticized Germany for allegedly dumping cars on the US. According to Der Spiegel, Trump said, “The Germans are bad, very bad. See the millions of cars they sell in the US, terrible. We will stop this.”
Der Spiegel said the comments were provided by people in the meeting, which included European Commission President Jean-Claude Juncker and the European Council President Donald Tusk. Later, however, Juncker publicly said Trump was “not aggressive.”
Poster child for good corporate citizen: BMW
To the extent the comments reported what Trump said, the President has an incomplete view of automaker manufacturing in the US and North America. German are already building cars in the US and in some cases exporting cars to other countries.
BMW’s plant in Spartanburg (Greenville), South Carolina, is the company’s largest in the world. Opened in 2004, it has produced 3.7 million vehicles and exported more than 2 million. It currently builds all BMW SUVs — X3, X4, X5, X6 — except the X1. It will also begin building the full-size BMW X7 in 2018.
In 2016, BMW built 411,171 vehicles in Spartanburg and exported 70 percent of them, or 287,700, worth about $10 billion. No US-flag automaker has that kind of export numbers. Capacity in Spartanburg has been increased several times, most recently to 450,000. Between BMW and the dozens of suppliers located nearby or along the I-85 corridor, upstate South Carolina has become comparatively affluent.
BMW just began work building a factory in San Luis Potosi, Mexico, to open in 2019. It will build the BMW 3 Series for the global market, not just the US, the company said in January. It was this facility that got Trump riled up in January, along with the factory Ford planned for Mexico and then scrapped under pressure from the then-President-elect. Some analysts say Ford CEO Mark Fields’ decision to back off from the $1.6 billion plan is one of the reasons Fields was dismissed this week, along with Ford stock price dropping 36 percent under Fields.
Trump in January said he wanted to slap a 35-percent tariff on BMWs imported from abroad. So far, he hasn’t followed up.
Other German automakers in the US
Mercedes-Benz has a factory in Vance, Alabama, near Tuscaloosa. It builds the GLE SUV (sibling to the E-Class sedan), the GLS SUV (S-Class), the C-Class sedan, and the GLE coupe using, Mercedes says, “a combination of American, Japanese, and German automotive best practices.” 2016 production amounted to more than 300,000 units, including $1 billion in exported vehicles. In comparison, MB’s US sales (including Sprinter trucks and Smart cars) was 381,000.
VW has had a plant in Chattanooga, Tennessee, since 2011, with a capacity of 150,000 cars a year, a figure it hit 2-3 years after opening. In the wake of dieselgate, VW sales have been softer. Audi has a new plant in the Americas, if not the US: In San Jose Chiapa, Mexico, that country’s first luxury-car factory. Its capacity is 150,000 vehicles a year, primarily for export.
In addition, every German automaker, along with most all Asian makers, have RD facilities and design studios in Michigan, Silicon Valley, and/or Southern California.