President Donald Trump believed trade war would create more jobs for people in the United States, but the auto industry seems shaping the other way. BMW has moved some of the productions of X3 SUV to a Chinese factory in Shenyang.
The German automaker is the largest exporter of cars from the US and its popular X3 was earlier exclusively made in Spartanburg, South Carolina. It is also being expected some production of X5 too would move to China.
The shift is strategic and based on the policy of Trump to impose tariffs on Chinese products. China is encouraging expansion and BMW has increased its stake from 50 percent to 75 percent in a Chinese JV to avoid tariffs on cars imported from the US.
Meanwhile, workers in car manufacturing companies in South Carolina are worried as their jobs could be shifted out too. Member of the Spartanburg County Council, H. David Britt, warned about a month ago to the Senate Finance Committee that the tariffs posed on Chinese products could be a real threat to the economy of South Carolina.
He said it is not just the BMW, but the suppliers that produce for the company too would move to other countries.
The Spartanburg plant is operational for BMW since 1994 and it is a workplace for around 10,000 workers. It is the largest factory for the company.
The trade war effects have started being felt in South Carolina and in September BMW’s production slumped 6 percent in Spartanburg compared to the same period a year ago.
BMW announced to be investing $3.4 billion in Shenyang’s two plants and in next couple of years to hire about 5,000 workers.
German auto industry supplier, ZF, too has plans of producing transmissions used in the BMW cars in China citing their philosophy to serve customers where they need them.
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