Automotive talent war escalates in South Carolina

Volkswagen Group's decision to build a 4,000-employee electric truck factory in central South Carolina could put the squeeze on another German automaker in the state.

BMW Group operates its largest assembly plant in the world in Greer, S.C., about 100 miles from the site of VW's planned Scout Motors factory in Blythewood.

According to a source briefed on the matter, BMW executives have concerns that the Scout plant — which is expected to have a capacity of more than 200,000 vehicles and begin production in 2026 — will escalate the competition for automotive production workers in the region.

Those concerns might be valid. A wave of auto-related factory investments from BMW, Volvo and Mercedes-Benz and their constellation of suppliers has ratcheted up the pressure on South Carolina officials to deliver the armies of workers needed to assemble hundreds of thousands of sedans, crossovers and vans. Since 2017, automotive employers in the state have created more than 13,000 jobs.

Even before construction begins on Volkswagen's $2 billion South Carolina factory this summer, the state's unemployment rate is 3.2 percent — lower than the national average of 3.5 percent.

When unemployment drops below 4 percent, "businesses have an extreme problem, either with work force availability, work force qualifications or willingness to work for the pay," said Michael Morris, human resources director at ZF Transmission's factory in Gray Court, S.C.

Work force is "the No. 1" site selection criteria, said John Lummus, CEO of Upstate SC Alliance, a Greenville, S.C.-based regional economic development marketing agency.

"The first question [prospects] are going to ask: Where am I going to get my work force?" Lummus said. "If a company comes in and they aren't asking questions about the work force at the very beginning, they are not a real prospect."

And with low single-digit unemployment, the state's economic developers are finding it harder to answer that question.

According to an estimate from Greenville-based commercial real estate firm Pintail Development, automakers need about 9,000 additional workers to staff new and expanding assembly plants in the Palmetto State. And their suppliers need to fill an additional 18,000 manufacturing-related jobs.

Andreas Heinzelmann, Pintail's director of industrial real estate, said the surge in auto manufacturing is a blessing and a curse.

The state has done an excellent job attracting auto manufacturing investment. But it now must do more to develop and attract the skilled workers needed for those assembly plants, Heinzelmann said.

"Employers are concerned about getting caught up in a price war," he said.

But South Carolina Commerce Secretary Harry Lightsey III said his state is well-equipped to support additional auto industry manufacturing investment.

"South Carolina is the third fastest-growing state in the country," Lightsey said. The state, he said, "has leading-edge capabilities in delivering work force."

Work force attraction and retention have been priorities for BMW since the German luxury automaker planted roots in South Carolina three decades ago.

"Our goal is to offer more than a job, but rather a career with opportunities for growth," BMW spokesman Phil Dilanni said.

BMW grooms part-time employees at its 6 million-square-foot assembly plant for full-time roles by offering them tuition assistance and hands-on training. Last year, the automaker opened a $20 million training facility to teach workers how to assemble electric drivetrains and high-voltage battery packs.

But work force development is a public-private partnership. South Carolina has mobilized its education infrastructure to meet the demand from a burgeoning auto industry.

"You can't build a vehicle without a work force," said Jack Ellenberg, associate vice president of corporate partnerships and strategic initiatives at Clemson University. "Having that access to the work force, [and] the institutions that shape that work force, is critical. Without it, you're not going to get very far."

To help Volkswagen staff its planned electric vehicle factory, South Carolina's technical college system will build and operate an on-site training center. It's a similar strategy used to help Volvo ramp up its Ridgeville, S.C., assembly plant a few years ago.

"For the larger employers that are looking for thousands of employees, the ability to have a dedicated training center is very important," Lightsey said.

Meanwhile, South Carolina's four-year universities are stepping up work force development as the auto industry pivots toward EVs. Clemson, for instance, collaborated with automakers and suppliers to help craft its automotive engineering undergraduate degree.

"It's focused on mobility and what would be arguably the primary components of the next generation of vehicles," such as semiconductors, autonomous sensors and batteries, Ellenberg said.

Clemson also taps the industry for help on advanced manufacturing development.

"How do we improve the manufacturing process and provide the skills necessary to manufacture the car of the future?" Ellenberg said. "We're working closely with the automotive sector to ensure that our graduates receive a relevant skill set and hands-on experience."

In the war for talent, supplier ZF Group heads to elementary school.

"Our work force for e-mobility is currently in the fourth grade," Morris said. "I need to start making contact with fourth-graders."

ZF piques their curiosity in technology and engineering with the help of FeRDi, a high-fiving robot named after ZF's founder, Ferdinand von Zeppelin.

FeRDi "talks about the company's history and what we do here," Morris said.

ZF also invites high school teachers and guidance counselors to spend the summer at the Gray Court factory to understand the company's work force needs.

Teachers get firsthand experience in human resources, engineering, finance and manufacturing. At the end of the summer, the teachers give a presentation on what they learned and how they would apply it in the classroom.

While building the pipeline, ZF invests in its employees through tuition reimbursement and partnering with South Carolina's technical schools and four-year universities to expand employees' skill sets.

Morris said as EVs go mainstream, ZF will require more electrical engineers.

"I don't want to go out and hire a whole other staff of electrical engineers," he said. "It's expensive, and you can't find them as readily, so we have to retrain."

Morris conceded that the arrival of more large employers in the region, such as Volkswagen, could drive employee turnover and wage inflation.

But he's betting ZF's willingness to promote from within and invest in work force development will limit defections.

"We take the approach with our employees that we will do everything we can to develop you, and that may mean, at some point in time, you leave us," Morris said. "But if you had a good experience here, maybe a couple of years later, I will get you back because the work force is mobile."