Big Companies: Show Me the Money
Posted June 18, 1998 7:00 a.m. EDT
GREER, SC — BMW could have gone anywhere to build its first plant outside of Germany. It picked South Carolina, a state with a lot of good qualities. The one thing that put it ahead of the pack including North Carolina, money in the form of hundreds of millions of dollars in tax breaks.
To get BMW to put a plant outside Greenville, South Carolina shelled out $135 million in state and local incentives. Six years later, the state believes its high-dollar gamble has produced some high returns.
North Carolina thinks it can do the same by luring FedEx and Nucor with some multi-million dollar deals of its own.
BMW originally told South Carolina that it would hire 1000 employees, and that number will soon hit 2000.
The German automaker will double the size of its US plant when it adds a new model to its production line in two years.
A lot of the jobs are also coming from outside the BMW plant. 21 BMW suppliers have now located in the area. They created an additional 2000 jobs.
However, it will take years for South Carolina to break even on its BMW investment, according to a UNC business school professor. Jim Smith adds that North Carolina has already attracted a lot of businesses without flashing the cash.
"We've got extraordinary colleges and universities," professor Jim Smith said. "We've got RTP, and we've got the largest concentration of banking jobs outside of New York city."
Still, many economic developers say the BMW project is a big winner. The question is, will the FedEx and Nucor deals bring the same ripple effect that BMW has had?
"In a FedEx hub in Texas there has been an estimated 10,000 new jobs created since its location there," NC Commerce Department spokesperson Kristen Weeks said. "Nucor has similar results in Berkeley, South Carolina."
There are also plenty of intangibles when you get a new employer like BMW. The average wages in the region have been pushed up by the BMW salaries, which are in the $40,000 a year range.
The BMW plant is also credited with luring countless new businesses to the Greenville-Spartanburg area. That reaction is the kind of impact some lawmakers in our state point to when debating incentives packages.