Daimler skirts tariffs and unions with new US factory
GERMAN automaker Daimler AG broke ground last week on a US$500 million plant in Charleston, South Carolina, to build vans, with the company hoping at last to avoid steep US import tariffs.
When the factory comes online by the end of the decade, it may also help the company pay lower wages and circumvent labour unions.
Volker Mornhinweg, head of Mercedes-Benz Vans at Daimler, said the key reasons for putting the plant in Charleston were the city’s excellent port operations and logistics and because Daimler already operates a factory next door.
Avoiding the 25 percent tariff that the United States puts on imports of commercial vehicles was also crucial.
South Carolina wages are markedly lower than those in Germany and the governor, Republican Nikki Haley, opposes organised labour.
Assembly line workers get $18 an hour in South Carolina, according to Labor Department figures. Hourly wages for German autoworkers are closer to $37 an hour.
According to Mr Mornhinweg, the new Charleston plant should be operational around 2020, following the introduction of the next Sprinter model, with some versions capable of running on electricity or featuring driverless navigation. –