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Sweden’s Volvo is the latest foreign manufacturer to open a “transplant” in the United States. Production of the 2019 S60 sedan northwest of Charleston, South Carolina, ramped up this month just as America goes through another spasm of protectionism. President Donald Trump’s nationalist crusade for tariffs mirrors Michigan Congressman John Dingell’s call for import quotas that inspired Honda’s first U.S. plant in 1982.

But Volvo’s choice has little to do with trade politics.

Learning from successful Japanese and European manufacturers over four decades of expansion, Volvo’s Charleston plant is the 17th non-union transplant to embrace American-made production advantages: lower costs, expanded global capacity, massive supplier infrastructure and proximity to the richest auto consumers in the world.

“Absolutely not trade because the tariffs did not exist on the radar,” says Volvo North America boss Anders Gustafsson, explaining Volvo’s May 2015 announcement — well before the 2016 election — to locate in the South after years of planning. “It’s a long process to decide and there are a lot of countries around the U.S. that you could go for a plant that would be cheaper. The company took a decision for Charleston and it was really a strategy to build where we sell.”

Even as retaliatory 25-percent Chinese tariffs have stymied plans to export S60s there from South Carolina, Volvo’s plant is running full steam ahead.

“We are in full ramp-up now,” says Volvo North America spokeswoman Stephanie Mangini, citing Volvo’s hiring of 1,000 employees with another 2,900 planned in five years. “By 2021 we will also be building the XC90 SUV, our most popular vehicle, here.”

Trade was key in 1982 when Honda began producing Accord sedans in Marysville, Ohio, a year after Washington imposed quotas on surging Japanese imports that were taking chunks of market share from Big Three Detroit automakers. Toyota followed with its Georgetown, Kentucky, plant in 1988 producing Camry sedans.

“The transplants started with the 1980s trade war,” says Auto Trends consultant Joe Phillippi, a Wall Street auto analyst at the time. “It was a way — a chess play — for the Japanese to get around our import quotas.”

The Trump administration’s rhetoric today mirrors that of Michigan’s influential Rep. John Dingell, who in 1981 successfully lobbied the Reagan administration to impose foreign import quotas – the so-called Voluntary Restraint Agreement – on Japanese imports.

“I felt it was absolutely necessary, in view of the grotesquely unfair trade practices of our trading partners — especially the Japanese — that real quotas, and domestic content requirements equal to those of other nations should be laid in place by the United States,” Dingell said at the time, "while the United Auto Workers union estimated tens of thousands of jobs a year were being lost to imports.

Dingell was backed in the 1980s and '90s by fierce protectionists at Ford and Chrysler.

“Of our $173-billion trade deficit in 1986, Japan alone accounted for more than one-third,” Ford CEO Harold Poling wroite in The New York Times in 1987. “Of that, more than half was due to automobiles. The arithmetic is compelling. You cannot lower the trade deficit unless you address the automotive component.”

Chrysler CEO Lee Iacocca raged against imports, even as US transplants grew to eight by 1992: “They say all of our problems are our fault. That's like blaming our army and our navy for Pearl Harbor because they weren't ready. I mean Japan . . . targets this market.”

But with the Japanese transplants came hundreds of auto supplier firms and tens of thousands of new American jobs and auto dealerships down the I-75 corridor. Foreign automakers were not only popular with American consumers, they became integral to American communities and the revival of U.S. manufacturing.

“By establishing a viable new model of production organization in the U.S., (transplants) are contributing to the re-industrialization of American manufacturing,” wrote University of California professor Martin Kenney and Carnegie-Mellon’s Richard Florida in 1992.

Auto analyst Phillippi says the transplants’ huge Midwest steel, rubber and manufacturing spine grew a key Southern spur with the opening of BMW’s Spartanburg, South Carolina transplant in 1994. BMW’s goal: be closer to its rich U.S. customer base and farther from expensive European unions.

“By now, trade was well down on the list for automakers’ reasons to locate here,” says Phillippi. “Just look at the costs of building in Europe. The facilities here are non-union.”

Today, BMW Spartanburg is one of the largest plants in the U.S. with 9,000 employees producing 1,900 SUVs a day. It supports 235 local suppliers; 70 percent of production is exported via Charleston’s port to 140 countries.

BMW’s success attracted other luxury makers like Mercedes and Volvo (the latter also manufactures in Sweden, Belgium, India and China) to the region with its infrastructure, trained non-union workforce and major port. Hyundai and Kia transplants have also located nearby in Alabama and Georgia.

“The most important thing is the harbor, the logistics and of course, the suppliers,” says Gustafsson, who acknowledges BMW’s pioneering role. “There is the competence in the area and that is the most precious thing in this industry. We need to hire extremely competent colleagues.”

Still, Volvo has protested government tariffs and says it’s been thrown “a curveball” with China’s import duties (ironically, the Swedish company is Chinese-owned). Volvo had planned to export 50 percent of S60 production to China and Europe (which has a 10 percent tariff).

Gustafsson shrugs off the trouble as a near-term glitch.

“We have learned there are things that we cannot do anything about, we don’t spend time on,” he says. “When we took a decision to go for a plant in the U.S., there is always plus and minus. I think we will find a good solution.”

Phillippi agrees: “China tariffs are a temporary hiccup. If you design from day one to build three or four models in a plant, then they can move capacity where they need it.”

Big Three automakers have become less protectionist as they, too, have built flexible, global capacity.

With Volvo’s Scalable Product Architecture (SPA) platform, Gustafsson says South Carolina can build everything from utes to sedans. “Eighty percent of our sales volume here is XC90, XC60, and XC40 (SUVs). So we have the right ice cream in our box. But consumer behavior changes now much faster ... so you need to stand on your toes and have ice cream for everyone.”

Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne. Catch “Car Radio with Henry Payne” from noon-2 p.m. Saturdays on 910 AM Superstation.

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