Business

Volvo chooses South Carolina for $500 million auto plant

2016 Volvo VX90
2016 Volvo VX90

Volvo announced Monday that it will build a $500 million factory in Berkeley County to produce 100,000 cars a year.

Construction on the Swedish automaker’s first U.S. plant will start this fall with the first cars produced in 2018. The South Carolina plant will add to four Volvo factories in Europe and China, where the automaker’s parent company is based.

Volvo usually makes two models of vehicles at its plants, company spokesman Jim Nichols said. but the automaker has not decided which models will be built in South Carolina.

Volvo could employ up to 2,000 workers in the decade after the plant opens and another 2,000 by 2030, the S.C. Department of Commerce said. The state employs 46,000 automotive-industry workers, including at hundreds of suppliers, according to the S.C. Automotive Council.

The plant is coming to the old Camp Hall timber plantation off Interstate 26 near Ridgeville. The 2,881-acre site is about 40 miles northwest of downtown Charleston and about 30 miles from the Port of Charleston.

Gov. Nikki Haley said at a news conference Monday that Volvo wanted to be made in America and gave the company credit for that goal, but added “more importantly, we love that they’re now going to be made in South Carolina.”

Volvo is receiving at least $204 million in incentives from the state and electric utility Santee Cooper.

South Carolina offered about $150 million in incentives to land Volvo, including about $120 million in economic-development bonds that will need final state approval, S.C. Commerce Secretary Bobby Hitt said. The state also offered grants for site improvements and tax credits for jobs created.

Some of the money will go toward a new interchange on Interstate 26, Hitt said.

The S.C. Technical College System will assist in recruiting and training plant workers, Volvo said. An employment website went live Monday, which informs prospective workers to check back for more information. The company did not have details on pay or skills needed to work at the plant.

Berkeley County and Santee Cooper will buy the site and provide water, sewer and other assistance, Hitt said.

Santee Cooper is spending $29 million to buy the entire Camp Hall site, totalling 6,800 acres, and $25 million in loans and grants, utility spokeswoman Mollie Gore said.

Berkeley County will allow Volvo to pay a lower tax rate and provide $5 million to purchase the site.

Hitt praised the other states that competed to win the plant, which included Georgia and North Carolina, but he noted: “The outcome for South Carolina today is: We won.”

“It’s a boon for us,” said State Rep. Joe Jefferson, a Berkeley Democrat whose district includes the plant site. “We got plenty of jobs around (Charleston), but we needed some momentum heading more westward, something in rural areas.”

Volvo won’t discuss why it chose Berkeley County over a site near Savannah in Georgia, the other finalist for the plant, said Nichols, the company spokesman.

South Carolina won the plant because of the site’s access to an international port and the state’s entrepreneurial spirit, Nichols said. The state’s experience with two other automakers, BMW and Mercedes Benz, also helped win over Volvo executives.

“The state has experience with premium auto brands,” Nichols said.

South Carolina workers, especially those in the Lowcountry, have developed skills in automotive and high-tech industries, he said. In North Charleston, Mercedes Benz is building a $500 million van plant about 20 miles away from the Volvo site, while Boeing operates a 7,600-employee jet-making plant about 30 miles away.

“It’s good to have that kind of knowledge base in the region,” Nichols said.

The U.S. plant is part of a plan to double global sales, the company said.

“This new global industrial footprint and a complete product renewal forms the foundation for our growth and profitability targets,” Volvo chief executive Hakan Samuelsson said.

And more manufacturing work could be coming to the plant site.

Auto analysts suspect the Berkeley County location where Volvo plans to open could attract another manufacturing plant for its parent company, the Chinese-based Zhejiang Geely Holding Group.

About one-third of Camp Hall site will be used for Volvo, Hitt said.

But he and Haley did not have any word about other projects from Geely at the site, including moving Volvo’s North American headquarters from New Jersey.

“With every company that comes, whether its tires or planes, you always have the second conversation, but right now we started with this first conversation,” Haley said.

Nichols said any talk of additional project was speculation at this point, though the company wanted a site with room to expand its manufacturing operation.

“This is a very long term investment,” Nichols said.

Volvo would become the third European automaker to locate in South Carolina.

BMW opened its first U.S. plant in Greer in 1994, transforming South Carolina’s economic culture.

The Upstate plant now employs more than 8,000 and has attracted thousands of additional jobs at its suppliers. The state has more than 250 automotive related companies. BMW’s plant site also has become a tourist destination with a driving course.

Meanwhile, Mercedes-Benz announced plans in March to build a new $500 million assembly plant in North Charleston for its Sprinter vans.

The plant would add up to 1,300 jobs. The company already has a decade-old facility on the site that reassembles Sprinter vans made in Germany.

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