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Tariff talk: New BMW Manufacturing CEO not changing plans ‘at this point’

Automotive
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Despite recent rhetoric from President Donald Trump over raising tariffs on goods imported into the United States, the new CEO of BMW Manufacturing Co. isn’t worried.

Knudt Flor, who assumed the role in December 2016, met with a small group of reporters on Friday to talk about the current status of the $1 billion addition underway at Plant Spartanburg. During the discussion, Flor did talk about recent comments made by Trump over BMW building a factory in Mexico and selling those cars in the United States.

New BMW Manufacturing Co. CEO Knudt Flor stands near the X model display inside the BMW Zentrum on the Plant Spartanburg campus. (Photo by Matthew Clark)According to Bloomberg, Trump told Bild Zeitung “if they want to build a factory in Mexico and sell cars in the U.S. without paying a 35% tax, then they can forget about it.”

“It’s not a reality as of today,” Flor said of the tariffs. “We like to deal with reality and fact.”

Flor added that BMW is “not going to change our strategies or plans at this point.”

He said the plant in Spartanburg does more exporting than importing, citing the import of 15,000 containers of goods each year to the plant as opposed to exporting nearly 25,000 containers out of South Carolina each year.

Because the company has geared itself toward production flexibility and the ability to scale its production with consumer demand, BMW is positioned to handle potential issues involving shifts in global trade policy.

“If you look into our network, we are not just a German company because we have a global network,” Flor said.

That echoed comments made by BMW AG CEO Harald Krueger earlier this week at an industry conference in Germany. Krueger said the allocation of production in the BMW structure “safeguards continuity in volatile times,” as reported by Bloomberg.

Flor also spoke about the challenges facing the automotive giant in terms of workforce. He said there was no expectation of a downsizing in the workforce at Plant Spartanburg, but the kinds of training potential employees need has changed dramatically over time since the plant opened in the mid-1990s and even since he left Plant Spartanburg in 2000.

New technology required in plug-in hybrid and electric cars has changed the dynamic of what automakers like BMW need.

“We focused on combustible engines before,” Flor said. “Now, we have both and we have to have the people for both.”

On Jan. 31, BMW Manufacturing gave $300,000 to S.C. Project Lead the Way to help bolster science, technology, engineering and math learning at four middle schools in Cherokee County.

But, Flor said the technology used to produce cars, like robots used in the body shop at Plant Spartanburg, is not a substitute to a well-educated workforce. He said the new trait sought after by companies like BMW is “digital knowledge.”

He also discussed competition in the sport activity vehicle market. In January, according to the website motorintelligence.com, BMW had less than 1% of the U.S. market share in the light truck category. Flor said competition is good for business as it should force companies not on top to work smarter and harder.

“You’ll always see someone overtake, but it is not forever,” Flor said. “If it does happen, it will take more energy to turn it back.

“It will fuel products and processes and we will see what happens. I feel good about the future.”

As for the upcoming production of the new X7 series — the new sport activity model being launched by BMW and produced at Plant Spartanburg — Flor said the model will be different than the popular X5 model. With regard to the timeline of production beginning on the new model, Flor said the company didn’t make a habit out of commenting about new product timelines, but “if you come back next year, we may have one to drive.”

As a parting shot, Flor said BMW feels infrastructure is “extremely important” as the S.C. General Assembly continues to discuss road maintenance, but the most important item from his vantage point was for the state to maintain its business-friendly stance.

“This pro-business attitude, please make sure we sustain this,” he said to reporters.

Reach Matthew Clark at 864-235-5677, ext. 107.

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