Manfred Erlacher is a happy manager. The head of a BMW car manufacturing plant in the small and once-impoverished town of Spartanburg in South Carolina is running a successful business, free of the bureaucracy he would have encountered in BMW’s home country of Germany.
“We have ideal conditions here,” Mr. Erlacher told his guest, Sigmar Gabriel, the second-most powerful politician in Germany, who was on a visit to the United States this week.
Mr. Gabriel, Germany’s economy minister, deputy chancellor and leader of the Social Democratic party in a coalition with Chancellor Angela Merkel’s Christian Democrats, seemed to be listening. The Spartanburg manager didn’t waste the opportunity, telling of the ideal transport connections, low labor costs, non-bureaucratic approval processes and, above all, the cheap energy costs.
All of this allowed Mr. Erlacher to save about one quarter compared to the cost of the average BMW plant in Germany. And that’s not all. The growing consumer demand in the United States means he can sell more cars. The plan is to invest another €1 billion in an expansion of the plant.
It was an eye-opening visit for Mr. Gabriel. While he should be proud that Germany’s traditional manufacturers are this successful in the world’s largest economy, it also served as a cautionary tale for the state of his own economy. These two countries are going after the same industries – the re-industrialization of the United States could mean the de-industrialization of Germany.