In its biggest foreign market, BMW gets skilled workers for less

By Peter Whoriskey
Washington Post Staff Writer
Wednesday, October 27, 2010; 1:22 AM

GREER, S.C. - When German automaker BMW put out the call recently to hire a thousand factory workers here, the people who responded reflected the upheaval occurring in the U.S. economy.

Among the applicants: a former manager of a major distribution center for Target; a consultant who oversaw construction projects in four Western states; a supervisor at a plastics recycling firm. Some held college degrees and resumes in other fields where they made more money.

But they're all in the factory now making $15 an hour - about half of what the typical German autoworker makes.

The trade debate in the United States usually focuses on the jobs lost to factories in the developing world. But the recession has forced countless skilled workers in this country to consider jobs they would have rejected in the past. They now offer foreign manufacturers a resource that was far less common just a few years ago: cheaper wages for better talent.

"We are a low-wage country compared to Germany," said Kristin Dziczek, director of the Labor and Industry Group at the Center for Automotive Research. "And that helps put jobs here."

But the price of having a more globally competitive workforce means more in the United States could fall well short of the middle-class living standards that manufacturing workers once could expect. Wages adjusted for inflation have declined for these workers since 2003.

At General Motors and Chrysler, new hires make $14 an hour, or half the amount that existing workers take home. Likewise, at the BMW plant, which is not unionized, new workers earn a little more than half of what those hired earlier make. Some still seemed stunned by their change of circumstances. But they are almost uniformly grateful for the opportunity.

"It's the best place I've ever worked in my whole life, I can honestly say that," said Debra Harrison, 50, who was laid off at an Electrolux factory 21/2 years ago and began at BMW in July.

'A win-win'

Although U.S. manufacturing employment has been in a decades-long slide, the BMW campus in Greer has grown in the 16 years since opening and is viewed by some as a model of what manufacturers - American or not - might achieve.

It employs 7,000 and has generated thousands of additional jobs in the region at auto parts shops and suppliers. Moreover, more than 70 percent of the vehicles produced at the factories here are exported, and an Obama administration commerce official who visited the campus last week, Rick C. Wade, called the plant an "example" of what is possible to move toward the president's goal of doubling exports in five years.

"We live in a global economy, and this is an example of what can be a win-win," said Sen. Lindsey O. Graham (R-S.C.), who last week attended the opening of the new 1.2-million-square-foot facility. Because of BMW's success in this Greenville suburb, "Southern politicians are tripping over themselves to attract foreign manufacturers."

Indeed, among the other large private employers in the area are Michelin, the French tire maker and Robert Bosch, another German manufacturer.

The wage differential between German and U.S. workers is just one advantage BMW finds here. The primary reason for the factory, executives emphasized, is that the United States is the automaker's largest foreign market. Locating here, among other things, helps mute the effects of currency fluctuations between the two countries.

"We needed a bigger production capacity [here] to balance production and sales in the U.S.," BMW Group Chairman Norbert Reithofer said at the opening. "And for me that is the most important point."

New hires at the plant are not directly employed by BMW but come through a contractor, although the automaker says some of the new workers might eventually be hired by BMW and work their way up to the higher wage.

BMW declined to say what their factory workers in Germany make, explaining in part that comparisons are difficult to make because of benefits packages and differing job categories. The International Labor Organization has pegged hourly manufacturing wages in Germany at nearly 24 euros, or more than $33.

Moreover, in a comparison of international labor costs, the German Association of the Automotive Industry reports that the cost of an auto company employee including benefits is 46 euros hourly in Germany and 26 euros per hour in the United States.

While the opening of factories in foreign markets has sometimes drawn criticism from American unions, last week's opening of the BMW factory here appears to have been met with little opposition from the German union.

"From a German trade union perspective, we are not overly concerned," said Horst Mund, head of the international department at IG Metall, a large German union to which BMW workers belong. "The success of German carmakers depends on the ability to sell cars abroad. We cannot expect all the cars to be made in Germany."

He said that when Daimler decided to make the Mercedes C Class in Tuscaloosa, Ala., rather than in Germany, the union extracted promises that no workers would be left without a job.

"The affected plant got other models to work on and other jobs - so no one was losing," Mund said. "You can do that as long as you are growing."

Competitive wages

None of the 15 U.S. workers interviewed for this story complained, either. In South Carolina, which has a lower median household income than all but eight states, many consider $15 an hour a good wage.

In conversations outside the plant's turnstiles and beside the parking lot, the blue-shirted workers uniformly praised BMW and their jobs. They also recounted the sometimes difficult path to getting hired.

"It's been pretty good - it's not really hard work," said Wade Lamay, 40, who used to be a supervisor at a plastics recycling company.

Ibn Saweuyer-Parks, 60, who holds a bachelor's degree in math, had been overseeing construction jobs in four Western states and anticipating a comfortable retirement until the economic downturn ravaged his savings.

"I had to get back to work," he said. But "I work in a wonderful environment."

A 58-year-old co-worker, Cliff, who preferred to use only his first name, said he'd run distribution centers for Target and Michaels before taking a buyout a few years ago. Also a college graduate, he thought it would be easy to find another job, but it wasn't. He ended up looking for work at McDonald's and driving a bus for a while before finding the job at BMW.

"It's tough out there," Cliff said.

© 2010 The Washington Post Company