The deciding factors in Volvo’s decision to build its first North American manufacturing plant near tiny Ridgeville — population 2,000 or so — have by now become a familiar economic development tune: a nearby seaport that’s efficient and quality workforce training.
It’s what convinced Daimler AG in March to build a campus in North Charleston that will make the company’s popular Sprinter vans. On Monday, Lex Kerssemakers, CEO of Volvo’s American operations, said the Swedish automaker was lured to South Carolina by the same song.
“One of the main criteria is accessibility overseas,” Kerssemakers said, explaining why Volvo chose the spot along Interstate 26 in Berkeley County, about 30 miles from the Port of Charleston. “And we think we will get a good pool of workers. We can make use of an already established recruiting and training program. That makes us feel very confident.”
Volvo announced at daybreak Monday that it will build its car factory in the Charleston region, with South Carolina and local officials promising a $204 million incentive package to lure the manufacturing plant.
Volvo’s $500 million investment could create as many as 2,000 jobs over the next decade and up to 4,000 jobs by 2030.
That means the incentives package will cost at least $51,000 per job and, at most, twice that much.
The plant, which will build about 100,000 vehicles to start, will be at the Camp Hall Industrial Campus along the westbound side of I-26.
“We’re excited to build our first American factory in South Carolina and we look forward to helping grow the local community,” Kerssemakers said. “We were impressed with the friendliness, work ethic and passion of the people of the Charleston area.”
Gov. Nikki Haley called the announcement “a landmark moment,” adding that “Volvo’s presence and commitment to the community will be felt for decades to come.”
Kerssemakers pointed to the State Ports Authority’s relationship with Greer-based BMW as a key selling point.
Charleston exports 800 BMWs every day at a port with none of the labor strife or delays found at other facilities. It’s the perfect spot, he said, for Volvo to bring its supplies to the U.S. while shipping American-made cars to the rest of the world.
“Proximity to a port is critical to automotive manufacturing,” said Jim Newsome, the SPA’s president and CEO, “and we are a proven leader in the automotive sector on the East Coast.”
Training by the state’s ReadySC program — what Commerce Secretary Bobby Hitt calls the state’s “special sauce” when it comes to industrial recruiting — sealed the deal.
ReadySC recruits workers and provides site-specific training through Trident Technical College and other schools. The program tailors its training based on the skills each company’s executives say they need.
One intangible advantage was Hitt’s experience in the automotive manufacturing industry, formerly working as an executive for BMW.
“He knew the language,” state Sen. Paul Campbell, R-Goose Creek, said of Hitt. “He’s put his heart and soul into it. Bobby drove the train.”
During a news conference Monday outside the Governor’s Mansion in Columbia, Haley was flanked by key officials and state leaders, including House Speaker Jay Lucas and Hitt, as she announced the state’s third major automobile manufacturer.
Haley said the teamwork across state agencies helped land Volvo and her sales pitch revolved around a strong local workforce with programs to train workers.
Hitt confirmed that Commerce officials and Haley recently visited Sweden and New Jersey to meet directly with Volvo executives.
Local and state incentives will help upgrade infrastructure and prepare the site for the manufacturing plant. State bonds totaling $120 million are expected to be approved by two oversight boards soon, officials said.
In addition, Commerce will provide $30 million in grants and state-owned utility Santee Cooper will provide another $54 million in incentives.
The state’s incentive package will primarily pay to improve the land around the Berkeley County site and add rail access, Campbell said, adding that Berkeley County officials also plan to offer a standard agreement for big companies to waive or reduce local property taxes.
“It’s a competitive package, it’s not overwhelming what we’re coming up with,” Campbell said. “I look at incentives as an investment in the future.”
‘Once in a generation’
Volvo will build its factory on a 2,800-acre parcel at the commerce park. A 575-acre first phase would include a 2,000-worker assembly plant, offices and a welcome center. Depending on market conditions, a second phase could be built that would include another assembly plant employing another 2,000 people.
A study by College of Charleston economist Frank Hefner estimated the annual economic impact of that many jobs would be $4.8 billion, the carmaker said.
“I believe this is a once-in-a-generation economic investment and the result of Gov. Haley’s commitment and focus on creating jobs,” said Berkeley County Councilman Josh Whitley. “For an international company to pick Berkeley County out of the entire country is reflective of our people, local resources, location and bright future.”
During a special meeting Sunday in Moncks Corner, Santee Cooper’s board of directors passed a resolution stating that its economic development arm will purchase the nearly 6,800-acre Camp Hall site from current owner MeadWestvaco Corp. and then “sell, lease, option or otherwise transfer certain portions of the Camp Hall Tract” to Volvo. The parts of Camp Hall that Volvo does not use will be set aside for future commercial or industrial uses.
The board also agreed to purchase two parcels adjacent to the Camp Hall site for use by Volvo and provide economic development loans to help pay for construction of buildings on the site.
The Camp Hall site primarily is served by Edisto Electric Cooperative, as well as Berkeley Electric Cooperative and Santee Cooper, with the co-ops getting their electricity from Santee Cooper. Santee Cooper spokeswoman
Mollie Gore said the utility expects to recover the non-loan incentive proceeds through energy sales to Volvo.
Berkeley County Supervisor Bill Peagler said the deal is “proof that Berkeley means business.”
“My team and I are committed to doing all we can to make Berkeley County a place where families and the next generation can not only live, but also work,” Peagler said.
Volvo said in March that it wants to build a North American plant to boost flagging sales in the U.S. The automaker hopes to double U.S. sales to 100,000 vehicles over the next few years.
Volvo posted a 2.3 percent increase in retail sales for the month of April, with growth in all major regions. The company has 30,000 preorders for its XC90 vehicle — a luxury SUV with prices starting at about $48,000.
Sales in the U.S. were flat with 4,636 deliveries for the month. The most popular models in America are the XC60, an SUV, and the S60, a sports sedan.
Attempts to lure Volvo came down to two states — Georgia and South Carolina — last month, with both states filing for environmental permits with the Army Corps of Engineers.
Volvo last week passed on the Georgia site, near Elabell and the Port of Savannah.
An environmental permit application proposes filling nearly 195 acres of wetlands at the Camp Hall site.
In exchange, the application proposes a mitigation plan that would preserve, restore and enhance 1,533 acres of wetlands on four tracts in the Dean Swamp and Walnut Branch watersheds, which are tributaries of the Four Holes Swamp blackwater river.
The proposal has the support of environmentalists, with Dana Beach, executive director of the Coastal Conservation League, calling the mitigation plan “a good one.”
Volvo joins German automakers Daimler AG and BMW in a state that is home to more than 250 automotive-related companies and suppliers and leads the nation in the export of both tires and automobiles.
Volvo, which has been importing to the U.S. since 1955, is based in Gothenberg, Sweden, although it has been owned by Chinese automaker Geely Holding since 2010. It currently has two plants in Europe and two in China.
View article as it appears on PostandCourier.com
Brenda Rindge of The Post and Courier contributed to this report. Reach David Wren at 937-5550 or on Twitter at @David_Wren