Daim­ler skirts tar­iffs and unions with new US fac­tory

The Myanmar Times - - International Business -

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. –

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