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By James T. Hammond
Editor, GSA Business
Published June 18, 2010
Recently I was talking with a long-time friend who worked with Gov. Carroll Campbell to bring BMW to South Carolina to build luxury cars and employ thousands of South Carolinians.
He said he hadn’t been to the BMW Manufacturing plant, which broke ground in Spartanburg County in 1992, until couple of years ago. He was there to meet with a BMW executive, and was waiting in the parking lot for his appointment time when a shift change occurred.
This former state official with impeccable conservative Republican credentials said it almost made him cry to see hundreds of BMW workers streaming out of the plant on their way to their comfortable homes, many driving BMW cars, all supported by their better-than-average wages paid by the German auto maker.
This man, who was no big-spending liberal in his days at the Statehouse, said that moment in the BMW Manufacturing plant’s parking lot affirmed for him the good that government can do.
At this time, in the wake of an unpleasant gubernatorial primary campaign, in which the rallying cry was largely to diminish the role of government, it is important to reflect upon what government has been able to accomplish to provide jobs and commerce in South Carolina. The record alone affirms the legitimate role of state and local government in paving the way for new businesses and new manufacturing plants that support South Carolina families.
Recent news illustrates that state and local government continue to perform a vital role in attracting businesses such as Boeing in North Charleston and Proterra in Greenville. Those incentives do not yet have a track record. But in the two decades since Gov. Campbell went to the mat to persuade the German auto maker’s executives that South Carolina was the place to be, his efforts have been vindicated over and over again.
Consider that record:
A 2002 Moore School of Business study of BMW’s Economic Impact showed that BMW’s South Carolina investment supported 16,691 jobs and produced $691 million in wages and salaries annually in the state. Based upon 2001 operations, less than a decade after the start of construction on the plant, the total economic output associated with BMW’s annual economic activities was more than $4.1 billion in South Carolina. After accounting for the costs incurred by state government, South Carolina received $27.6 million in net revenues each year. Overall, the four Upstate counties received $2.4 million annually in additional net revenue and the local school districts in these four counties gained $3.2 million annually
In a 2007 update by Moore School economists, the record only got better.
Sustainability had been added to the economic impact of more than $8 billion in 2007.
When the plant was announced 17 years earlier, BMW promised 2,000 direct jobs and $500 million in capital investment. By early 2008, the company had reported that it had 5,400 full-time jobs at the 1,150-acre site. More than $5 billion had been invested, much more than originally promised.
In March 2008, BMW announced it would invest $750 million more in South Carolina, taking production capacity to 240,000 units by 2012. The new investment is expanding the plant’s footprint to 4 million square feet.
While I certainly advocate responsible and right-size government, I believe this rising tide of libertarian and no-government attitudes is wrong-headed and will, if unchecked, make the state a third-rate business and manufacturing location and diminish an already lagging per-capita income for the state’s workers and citizens.
Only government can insure a broad-based K-12 school system and higher education in two-year or four-year institutions for a broad segment of the population. Only government can facilitate the necessary transportation and infrastructure needs of major employers who may want to locate here. And only government can provide the special schools to train workers for new industries such as the S.C. Board of Technical and Comprehensive Education has done for BMW and is doing for Boeing today.
Politicians who portray government as the enemy and clamor for its destruction do so at the risk of putting South Carolina’s future in peril.
Reach James T. Hammond, the Editor of GSA Business, at jhammond@scbiznews.com.
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