Made in America: The South Carolina solution
The sun rises over the Port of Charleston and with it, the start of another day where a new symbol of Made in America buzzes with activity.
Workers are preparing to load another cargo ship of BMW vehicles, built at the German automaker’s plant in Spartanburg, South Carolina.
While Michigan is still the heartbeat of America’s auto industry, South Carolina is one of several southern states that have become a greater focal point for automakers scouting out locations for new plants.
"We really focus on foreign investment, on adding new jobs to our country [and] not just our state," South Carolina Gov. Nikki Haley told CNBC.
"We have worked really hard on making sure we are just stable for the companies as they go forward and as they grow, we grow with them," Haley said. "If they are successful, we are successful. And South Carolina doesn’t like to lose."
Lately, South Carolina has been winning the battle to grow its manufacturing base by attracting and expanding two industries with some of the highest-paying blue-collar jobs: autos and aerospace.
The state is home to more than 250 automotive manufacturing plants, suppliers and other companies. As for aerospace, look no further than Charleston—one of the fastest-growing midsize metropolitan areas for aircraft manufacturing, and the site of Boeing‘s final assembly plant that builds 787 Dreamliners.
The company first started investing in the area in 2008, and its facility now employs more than 7,500 workers; but more importantly, it’s become a magnet for scores of aerospace suppliers like UEC Electronics.
With 175 employees in Hanahan, a city just outside Charleston, UEC supplies electrical components for Boeing and other aerospace companies in the area. Lately, CEO Mark Matthews has seen his order book expand as Boeing has ramped up production of the Dreamliner.
"We’ve seen our opportunities grow significantly over the last six months to a year. In particular, our backlog actually tripled in the last several months," Matthews said.
That type of growth is one reason why South Carolina’s unemployment rate has steadily dropped to 6.6 percent, from a high of 11.7 percent in January 2010. The national unemployment rate is 5.3 percent.
Critics say South Carolina is simply attracting foreign investment because it’s a right-to-work state where organized labor has failed to convince blue-collar workers to join or form unions. Haley makes no apologies for unions striking out in her state.
"We don’t have unions here for a reason and that is because of the complement between the companies and what they know they need to do," Haley, a Republican, said. "The workforce knows they are part of a family and they don’t want a middleman getting in the middle of it."
Haley said South Carolina is successfully attracting foreign investment in new plants because of its infrastructure, including the Port of Charleston. It’s already the third most-productive port in the country, according to JOC Group’s port productivity report.
The port will soon be dredged to make it the deepest on the East Coast and improve the flow of traffic for larger container ships.
Pete Selleck, chairman and president of Michelin North America, credits the state’s infrastructure for helping the company make South Carolina the No. 1 state for exporting tires, according to the state’s Commerce Department.
"The infrastructure is really, really good, particularly with our emphasis on the port because we bring in a lot of raw material—specifically natural rubber from Southeast Asia—and we export a lot," he said. "We export 50 percent of what we make through the ports in Charleston and also in Savannah," Georgia.