Last fall, BMW Manufacturing Company, a milestone-rich operation that has logged many miles in less than two decades, celebrated the expansion of its Spartanburg, S.C. facility.
The expansion – a multi-million dollar investment – supports next-generation production of the X3 sports activity vehicle. It also bolsters the company’s other X products. When it comes to the BMW’s X file, the truth is out there. “With expansion, we’ve become the most competent X-center model production facility, not just with the X3 but also the X5 and X6,” says Max Metcalfe, BMW’s communications manager.
FULL SPEED AHEAD
Place it in company and industry perspective and you’ll see that the US BMW plant is rushing forward at the same velocity that carried The Beatles from “Rubber Soul” to “Revolver” to “Sgt. Pepper. After BMW made the decision to expand, it acted quickly (a pace perfect for those saying they want a revolution). “Things moved pretty fast,” says Metcalfe, looking back on the period that followed the 2008 decision to upgrade. “Groundbreaking almost immediately followed BMW’s expansion announcement. By 2010, the new facility was up and running, which enabled us to better provide X units – particularly the X3 model – to the world.”
Indeed, exportation is a major focus of BMW Manufacturing’s mission. Metcalfe reveals that information, recently released by the US Census Bureau and the US Department of Commerce about automotive exportation, placed both Spartanburg – and, in turn, BMW – at the pinnacle. “We are the number-one non-NAFTA world auto exporter,” he says. “At this point, we export about 70 percent of what we produce.”
And expansion increased production capacity – by as much as 50 percent. “We went from being a facility that could produce 160,000 units to one that currently can produce 240,000 units,” says Metcalfe.
The Spartanburg plant opened in September 1994. Since then, more than 1.6 million vehicles have come off of the assembly lines and then were sold to customers throughout the world, according to the company.
MONEY WELL SPENT
In October 2010, BMW held an official celebration for the completion of the $750 million expansion. Metcalfe describes how the dollars were spent: “The expansion included construction of a 1.2 million-square-foot assembly hall for the production of the X3. The investment also included installation of the most advanced equipment in the X3 body shop. Further, to meet the additional capacity created, we added 300,000 square feet to the existing paint shop.”
This significant investment means that, from 2008 to 2010, the BMW parent company has invested $1 billion into its American luxury car market. The money spent also went into BMW’s expansion of its North American operating headquarters in Woodcliff Lake, N.J., as well as construction of two new regional distribution centers in the Northeast and Midwest (in 2008 and 2009, respectively).
The reason for all of the upgrades resulted from a global increase in demand for BMW vehicles, particularly the X vehicles and specifically in the United States, the company reports. Facility expansions will increase BMW’s US activities – not to mention lead to job creation. The increased production, the company anticipated, would lead to 1,600 new jobs. In Spartanburg, BMW Manufacturing Co. now has almost 8,000 employees at an operation that, following expansion, measures nearly five million square feet.
While expansion proceeded rapidly, it didn’t come without challenges. Perhaps the most substantial involved the economy. “BMW committed itself to the expansion during a period when the global economy went into its recession,” Metcalfe points out. “Some companies pulled back on what they were doing, in terms of growing their business, but we stayed on course.”
That course involved a fairly rigorous, self-imposed time frame. “Because we were committed, we wanted to move pretty fast,” says Metcalfe. “We had a specific time frame in mind. Despite the economy, we completed the expansion on time. That was probably the second most significant challenge.”
ENERGY EFFICIENT INITIATIVES
But expansion isn’t all that’s new with BMW Manufacturing Co. Pretty much coinciding with expansion completion is a new alternative fuel platform. “On the environmental side, we’re using hydrogen fuel cells to power our material handling equipment,” says Metcalfe. “We consider this extremely important, as we’re equipped with nearly a hundred pieces of material handling equipment, such as forklifts, tuggers and stackers.”
In October 2010, BMW Manufacturing Co. implemented the platform to use the fuel cells in the new X3 assembly hall. The technology represents an extremely efficient and clean use of energy. Here’s how it works: The fuel cells take stored chemical energy – in this case, hydrogen – and converts it into electrical energy through two internal electrochemical reactions. The only byproducts are heat and water, which reduces emissions and makes the method more efficient than traditional energy sources.
Fuel cells offer a much longer operating life than lead-acid batteries. They provide continuous power with no loss of power as the tank nears empty (as opposed to battery-powered equipment that run slower as the battery nears empty). BMW Manufacturing Co. implemented the technology in collaboration with partners from Linde North America and Plug Power, and it estimates that the technology will avoid 1.8 million kilowatt hours per year of electricity consumption at the plant that would have been used to charge a battery-powered fleet. The initiative provide a perfect complement to BMW’s landfill gas-to-energy effort established in 2003, which reduces CO2 emissions by 92,000 tons per year and saves BMW an average of $5 million in energy costs each year.
INNOVATIVE HR AND EDUCATION PROGRAMS
In addition, at the South Carolina plant, BMW has invested in workforce programs that will benefit the region, the company and American manufacturing. The programs include a new manufacturing recruitment program – BMW Scholars – and a $5 million Associate Family Health Center.
The Associate Family Health Center is designed as a first-class facility, operated by an independent health care provider that offers state-of-the-art medical technology. Approximately 25,000 square feet, the facility is available to all BMW employees, as well as eligible retirees and their covered dependents. It places medical services in a single location, which translates into cost savings and better overall health care management.
For the Scholars program, BMW Manufacturing Co. is partnering with three area technical colleges: Spartanburg Community College, Greenville Technical College and Tri-County Technical College. “These partnerships will provide work experience for students interested in pursuing careers in manufacturing,” says Metcalfe. “All three colleges have a long tradition of supporting manufacturing in the state, as this area was considered the textile capital of the world for decades. The colleges established strong relationships with textile companies.”
BMW is bringing that commitment to the automotive manufacturing arena. “It’s a training and recruitment program, and it focuses on students enrolled in curriculums that involve advanced technology and disciplines, such as automotive technology, robotics, machine tool technology, mechatronics and electrical pre-engineering. To support their education, we provide the students with the opportunity to work about 20 hours a week while they’re attending school.”
It’s more than just an apprentice program. It provides tuition and book cost assistance at the same time that it enhances students’ academic pursuits. It benefits the company, as it provides an employment resource pool. It benefits the region, as it fosters job growth.
“The program is also sending out a signal that there are many skills that are needed in the future,” says Metcalfe. “It will help the three colleges better focus on what they already offer, and it will help them support local industry. We’ve had internship programs for years, but this new program raises the level.”
He adds an important point: The program also signals that growth in the automotive industry is back. Indeed, BMW – as with the rest of the industry – is putting what happened in the mid and late part of this decade behind.
BMW, in particular, is driving forward in high gear. But, then again, this company only knew one speed – fast.