BMW AG is bolstering its defense against Donald Trump's trade tiff with Germany, increasing its investment and employment in the U.S. and even inviting the president to join the party.
The German automaker on Monday unveiled the revamped X3 sport utility vehicle at its plant in Spartanburg, S.C., and announced plans to increase spending and create another 1,000 jobs. The facility is BMW's biggest in the world and serves as an important shield against Trump, who has threatened carmakers over their imports -- and who declined the company's invitation to attend Monday's festivities.
"Free trade has made this success story in the U.S. possible," BMW Chief Executive Officer Harald Krueger said at an event celebrating the factory's 25-year anniversary. "It is essential for global businesses and economies around the world to flourish."
The redesigned X3, on sale this fall, is meant to reinforce BMW's position as America's biggest car exporter on a net basis, with vehicles worth more than $10 billion shipped abroad per year. While Trump's early pronouncements targeting carmakers have receded, the growth at the Spartanburg site helps the second-biggest luxury automaker build goodwill with the White House.
BMW executives were met on a stage by South Carolina Gov. Henry McMaster, a Republican, who called the German automaker "the gift that keeps on giving," and by Republican Sen. Lindsey Graham, who was more direct in his defense of free trade.
"I'm an American politician who likes German cars," he told the crowd. Graham called on Trump to negotiate a trade deal with Europe so the U.S. could export cars there without a tariff, as Mexico does.
"To those who fear globalization, embrace it, because it's not going away," Graham said.
Trump singled out BMW in January, threatening a 35 percent import duty for foreign-built cars if the company proceeded with plans to open a new plant in Mexico, according to the Bild newspaper in Germany. He reportedly told European Union officials in a closed meeting in May that there would be a stop put on the millions of vehicles German automakers sell in the U.S.
BMW has invested $8 billion in the Spartanburg plant since it was announced in 1992 and plans to spend another $600 million between 2018 and 2021. It plans to spend an additional $200 million for employee training and education at the facility, Krueger said.
The factory employs more than 9,000 people, with another 1,000 jobs to be added through 2021. Production climbed to a record 411,000 units last year, with about 70 percent of those vehicles exported.
"The investment automakers make in communities and the jobs they create has been especially important because of Trump," said Michelle Krebs, an analyst with Autotrader. The X3 is "an important vehicle because it's in that hot SUV-selling space."
The model has been a bright spot for BMW in the U.S. this year, with sales jumping 30 percent through May amid a largely flat luxury market. The Spartanburg plant also is getting ready for production of the new X7, which will debut late next year.
The overhauled X3 is decked out with new technology including optional hand-gesture control and a driver-assistance system that helps drivers change lanes and maintain distance from other motorists.
Technology may not be enough, however, to shake the perception that BMW's cautious styling decisions are contributing to market share losses against rival Mercedes, which has widened its sales lead over BMW in the U.S. this year. Consumer perceptions of the BMW brand are average or slightly above average, and the points it earns on styling have been in decline since 2010, according to Kelley Blue Book's Brand Watch metrics.
Business on 06/27/2017