Volvo opens US plant as CEO expresses worries about possible tariffs

Auto manufacturing giant Volvo Cars opened its first North American plant in Charleston, South Carolina on Wednesday, as its CEO expressed concerns over recent US tariff threats.

The new plant has the capacity to manufacture 150,000 automobiles annually, potentially creating 4,000 jobs, Volvo Cars President and CEO Hakan Samuelsson said at the plant’s opening ceremony.

About half of the parts the plant needs come from overseas suppliers and half of the manufactured cars target overseas markets, Samuelsson said, adding that an “open and fair” trading environment is important for the plant’s success.

If the US government goes ahead with its proposed tariffs against other countries, it would drive up costs, reduce profits and ultimately limit the number of jobs the plant can sustain, Samuelsson said, adding that tariffs can put as many as 2,000 jobs at risk.

Samuelsson said Volvo Cars has voiced its concerns to some US lawmakers, and expressed the hope that all sides would be able to resolve differences through talks.

Volvo Cars said construction of the plant began in 2015 and the company has invested about $1.1 billion in the facility.

Javier Varela, Volvo Cars’ senior vice president of manufacturing and logistics, said the company chose Charleston because of its easy logistical access, mature supply chain and healthy supply of skilled workers.

According to a statement from Volvo Cars, the new plant will start manufacturing S60 model sedans in August and XC90 sport utility vehicles from 2021.

Volvo Cars currently has two car manufacturing plants and an engine factory in Europe, three car factories and one engine factory in China, as well as assembly lines in India and Indonesia.

The car company was acquired by Chinese car maker Geely in 2010.