SPARTANBURG, S.C. – BMW used the reveal of its new X3 compact crossover here on Monday to make a veiled response to the Trump administration’s protectionist trade policies and its criticism of BMW and other foreign automakers.
The X3 will be built at BMW’s plant in Spartanburg, S.C., which has become the automaker’s largest factory worldwide since opening in 1994 and serves as the primary home of the brand’s growing portfolio of sport utility vehicles and crossovers. More than 70% of the vehicles built here are exported, a fact Sen. Lindsey Graham and South Carolina Governor Henry McMaster underscored in remarks to an overflow audience at the factory.
“To those who fear globalization, embrace it because it’s not going away,” said Sen. Graham, who also highlighted the state’s symbiotic relationship with BMW, which supplies nearly 70,000 indirect jobs in the U.S. “We need more trade, not less.”
On the campaign trail and as president, Trump has railed against “unfair” trade deals and domestic manufacturers that have moved production out of the country. In January, he said BMW should face a 35% tariff for vehicles imported to the U.S. and criticized BMW’s new factory in San Luis Potosi, Mexico, where the automaker will build its bestselling vehicle – the 3-Series sedan – when it opens in 2019.
Last month, Trump again censured BMW, which was the biggest U.S. net automotive exporter by value last year, reportedly telling European Union officials, “The Germans are bad, very bad.” Mercedes-Benz and Volkswagen also operate factories in the southern U.S., while Porsche has a presence there.
The Spartanburg plant, which BMW calls its “second home,” has flourished due to a friendly business climate and close government relationships that can help the automaker execute objectives quickly, such as when BMW needed to extend the local airport runway to accommodate cargo jets. After investing nearly $8 billion since breaking ground on the factory 25 years ago, BMW has announced it will invest an additional $600 million to develop future-generation utility vehicles and $200 million for worker training, as well as create an additional 1,000 jobs over the next four years to bring its local workforce to 10,000. “I love this number,” said BMW Manufacturing President and CEO Knudt Flor.
Launched in 2003 and last redesigned seven years ago, the X3 has been BMW’s most popular crossover so far this year and only slightly trails the 3-Series in sales. Its latest incarnation, expected at dealerships in November, is curvier and more dynamic than the outgoing model.
“Free trade has made our joint success story in South Carolina and the U.S. possible,” said Harald Kruger, chairman of the board of management of BMW AG, whose remarks emphasized BMW’s role in the U.S. economy and praised South Carolina’s “handshake culture.” In addition to the X3, the automaker builds its X4, X5, and X6 utility vehicles – as well as the forthcoming X7 three-row SUV – in Spartanburg.