By April Wortham
December 1, 2008
BMW AG is forging ahead with a $750 million expansion of its U.S. factory even as it makes deeper cuts to worldwide production.
The expansion of the Spartanburg, S.C., factory is "proceeding on time and on budget for a production start in 2010," says Robert Hitt, a BMW Manufacturing Co. spokesman.
The expansion aims to boost annual capacity in Spartanburg to 240,000 vehicles from 160,000 by 2012 and add 500 jobs to the factory's 5,400-member permanent work force.
The X3 crossover, now built at contract assembler Magna Steyr's factory in Graz, Austria, will move to Spartanburg beginning with the next generation, likely in 2010.
Next month, Spartanburg will trim its temporary work force by as many as 733 workers, according to contingency staff supplier MAU Inc. Neither BMW nor MAU would say how many temporary workers Spartanburg employs.
Hitt blamed two factors for the temp-staff cuts. First, the plant built the last Z4 coupe and roadster on Aug. 28. The next-generation Z4 will be produced at BMW's factory in Regensburg, Germany. Second is what Hitt described as the "uncertain global economy."
Last month, BMW CEO Norbert Reit-hofer said the automaker would need to trim its global 2008 production by at least 40,000 additional units as a result of falling sales, on top of a 25,000-unit cut announced previously.
Meanwhile, the BMW factory is sending more of its vehicles overseas.
A year ago, Spartanburg was exporting about 60 percent of its output. Today, Hitt said, it exports about 70 percent.