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Donald Trump Owes BMW An Apology

Editorial / Comments

And to every other automaker who has invested in American manufacturing.

President Donald Trump has been quite vocal regarding intentions to revive American manufacturing and thereby bring back lost jobs. It's a noble objective, but foreign automakers with US production facilities have been wrongfully singled out by Trump. According to a Reuters report, "Out of 656,000 new manufacturing jobs created between 2010 and 2014, two-thirds can be attributed to foreign direct investment." Furthermore, "Over $700 billion in foreign capital has poured in over the last two years bringing total foreign investment to $3.7 trillion at the end of 2016."

Aside from massive Chinese investment to the tune of more than $200 billion between 2010 and 2015, countries such as the UK, Japan and Germany have invested some $300 billion into US production plants and companies. The latter, Germany, has perhaps contributed the most to US auto manufacturing, and yet President Trump has singled it out, more specifically BMW. BMW has invested $8 billion in its Spartanburg, South Carolina facility, which builds the X3 and X5 crossovers, which are just two examples. Spartanburg is now the largest exporter of cars by value from the US, and BMW isn't done investing there.

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BMW CEO Harald Krueger previously announced an additional $600 million investment in Spartanburg over the next four years, plus an additional $200 million for training and education. All told, another 1,000 jobs will be added to the already 9,000 employees at Spartanburg, and yet Trump recently stated that Germany was "very bad" regarding trade and selling too many cars in the US: "Look at the millions of cars they're selling in the US. Terrible. We will stop this." However, it's only fair to clarify that Trump's comments were more than likely aimed at BMW's manufacturing plant in Mexico, which also exports vehicles to the US.

However, his words were directed at a company, regardless of its national origins, that provides well-paying jobs to Americans. BMW clearly believes in American manufacturing (Spartanburg is its largest plant in the world). Does Trump? We know that Honda, Hyundai, Toyota and Volkswagen share BMW's belief – all of whom have set up shop in the US, providing thousands of jobs in Ohio, Alabama, Kentucky and Tennessee, respectively. Oh, let's add Mercedes-Benz and Volvo to that list, too. Trump's choice of words towards BMW are out of line. Period. Even South Carolina Governor Henry McMaster, a Republican and Trump supporter, stated the following:

"The presence of this company (BMW) changed everything in the trajectory of our state." Partly because of Trump's statements, BMW is now preparing a so-called "Doomsday Scenario" by updating factories in South Africa and China that can also build the X3, a top-seller. Up until now, Spartanburg has been the sole X3 manufacturer. This is called leverage and production flexibility - and a warning sign. BMW, along with other major automakers, want to do manufacturing business in the US, but if the president gives the impression of an unfriendly environment and then enacts new and unhelpful policies, those companies may have no choice but to go elsewhere. President Trump needs to change his tune before it's too late.