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The Post and Courier, Charleston, S.C.
Motor Trend

The state Commerce Department will ask a finance committee today to approve $103.5 million in state-backed funds for BMW Manufacturing Corp., an amount that works out to almost $259,000 for each of the 400 jobs the automaker has added at its Greer assembly plant over the past 15 months.

If authorized, the money will pay for research and engineering centers, a testing facility, land purchases, road improvements and other projects. The funds would be raised as needed over the next year by issuing bonds that are guaranteed and repaid by taxpayers.

Commerce Secretary Bob Faith is scheduled to ask the General Assembly's Joint Bond Review Committee to approve the incentive package today. The deal also must be blessed by the Budget & Control Board.

Lawmakers created a new tier of incentives specifically for BMW and other large economic-development prospects last year by raising the state's borrowing cap. The measure, championed by then-Gov. Jim Hodges, allows South Carolina to spend up to $250 million on roads, rail improvements, land and certain other needs for companies that invest more than $400 million and create more than 400 jobs.

BMW is the first business to qualify for the new perks. In September 2002, the German automaker announced that it would spend $400 million to boost production at its Upstate plant to 160,000 Z4 roadsters and X5 sport utility vehicles a year from 100,000.

The company has invested about $200 million so far and has added more than 400 new workers, said BMW spokeswoman Bunny Richardson.

When broken down on a per-job basis, the inducement package shows how high the stakes have risen in the industrial recruitment game, especially when pursuing blue-chip manufacturers. When BMW picked Greer as the site of its first U.S. plant in 1992, South Carolina's incentives totaled $130 million, or $81,479 a job, according to a company-funded study by the Moore School of Business.

The latest proposal is valued at more than three times the 1992 deal, although the Commerce Department said $150,000 a job is more accurate because $40 million of the $103.5 million is for roadwork that BMW was promised as part of an expansion more than five years ago. "That was a previous commitment," Faith said.

Also, Faith said, almost all of the bond money will go toward projects that will benefit the state economy as a whole, such as a $15 million information technology center that will be part of Clemson University's automotive research park in Greenville, and a $26.5 million engineering center scheduled to open in 2006.

"When you look at how it's broken down, I don't feel so bad, because that's not $60 million that's going into BMW's pocket," he said. "Those are truly public assets."

Also, he said, BMW's growth is helping the state in its quest to attract more higher-paying "knowledge-based" jobs. In addition to the research and engineering centers, a $16.9 million facility will allow the company to work more closely with its parts suppliers and increase its use of U.S.-made components.

"We pressed them really hard to make sure this expansion package was not just about assembly line jobs but also information technology, design and software jobs," he said. BMW traditionally has retained those kinds of positions at its Munich headquarters, Faith added.

"For BMW to actually be engaged in design and research in South Carolina I think is the beginning of a whole new exciting growth stage for the company's involvement in the state's economy," he said.

To date, BMW has invested more than $2.5 billion in its Greer operations, where it employs 4,700 workers. Suppliers account for another 7,200 jobs statewide.
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