On Friday, March 20, BMW announced that its largest production facility, located in Spartanburg, South Carolina, would suspend production effective April 3. The halting of manufacturing at the plant, which employs roughly 11,000 after heavy investment and expansion over the past few years, comes as a response to the global coronavirus pandemic. The outbreak of the novel human coronavirus (COVID-19) is hitting the global economy with simultaneous demand and supply shocks, as global production capacity outside of China continues to grind to a halt, and consumers stay shuttered in their homes.
The production hiatus is planned to extend at least until April 19, but with entire U.S. states on lockdown and citizens told to remain home, when things will return to some degree of normalcy remains to be seen. Last year, Spartanburg set a new production record, when it produced over 400,000 BMWs for just the third time in its existence. This year, with global auto demand and now production at a fraction of what they were, Spartanburg won’t be aiming to break any records. Although U.S. auto sales rose 6.4% in February, they fell 79% in China, the world’s largest auto market, something that is sure to happen in the U.S. and Europe in March and likely April as well.
ZF North America, a manufacturer of transmissions for BMW and countless other brands, is also suspending production at its Gray Court, South Carolina facility, less than one year after it inked its largest-ever deal with BMW. The suspension of production is set to begin April 3, and as Spartanburg going offline begins to ripple throughout its supplier network and the local economy, ZF is also looking to halt production at its chassis systems production site in Duncan, South Carolina.
This is just the beginning though, as BMW Group Plant Spartanburg is responsible for creating an incredibly strong multiplier effect in the U.S., with every ten jobs at the site creating another 90 elsewhere in the economy. In 2017, purchases from American parts suppliers totaled nearly $6,000,000,000.—Alex Tock
[Photos courtesy BMW AG.]