The place where globalization kept its promise
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The idea of more open, global trade has been sold as necessary for economic success. Yet today we hear calls to “build a wall” and to break up trading partnerships. Turns out we’ve seen the pendulum swing between free trade and protectionism many times before. Our series Trade Off looks at key moments when trade barriers have been built up or torn down and at globalization’s winners and losers.
Candidate Donald Trump spent a lot of time on economic themes during his campaign. There weren’t a lot of specifics, but at the heart of Trump’s economic policies was globalization. His policy, in a nutshell, is that the U.S. ought to be doing less of it and that, with less global trade, the American economy would be better off.
Some American voters seemed to like Trump’s message. He carried many of the states that have seen the negative effects of globalization, like Michigan, Ohio, and Indiana. Once President Trump entered office, he officially withdrew from the Trans-Pacific Partnership and later started the process to renegotiate the North American Free Trade Agreement.
But there are plenty of people who like globalization. They’re not academics or politicians – they’re real people who happen to live in a part of the country that has seen the benefits of globalization in the form of a brand-new BMW.
Twenty-five years ago, the going economic idea was that globalization would make the entire world rich. Countries wouldn’t try to make everything, instead, they would make what they were best at, export those goods to other countries, and then buy what they needed from other countries.
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And it was at about this time that BMW realized that it made more economic sense for them to manufacture BMW cars not in Germany, but in the U.S. In 1992, they chose South Carolina. David Britt, who serves on the Spartanburg County Council, remembers the day he heard BMW was coming to his county: “It was just amazing relief, satisfaction and it’s almost like being found in an ocean. When you’re out in an ocean by yourself with no life preserver and you’ve fallen overboard and you’re just hoping that somebody’s going to come and save you. That’s the feeling, just being saved.”
A photo collage showing BMW’s arrival in Spartanburg, South Carolina. Top row, left to right: A local newspaper’s coverage of BMW’s decision to build a manufacturing plant on the Greenville-Spartanburg county line. The grand opening of the manufacturing plant. Bottom row, left to right: BMW employees celebrate the first car to roll off the line. June 1992: BMW announces its decision to choose South Carolina over Nebraska as the site for its only American manufacturing facility.
Britt said “saved” because he knew what was about to happen to the area’s economy.
Textile manufacturing had been the main industry in the area for decades. But ironically, because of globalization, those jobs started to move off shore.
“It took this community by surprise” said Britt. “It was a stomach punch like you’ve never seen. We had 25,000 employees lose their job in about 10, 12 years. This downtown was decimated. We didn’t know where to turn.”
Their savior would be, as it turned out, more globalization.
And it turns out, Upstate South Carolina was a perfect candidate. They had experienced factory workers who needed jobs, they had space for BMW to build with room to grow, there was a nearby airport for flying in those German engines, and the state had the Port of Charleston, which meant completed cars could easily make their way to buyers around the world.
South Carolina also offered BMW financial incentives to pick their state over others (Nebraska also made a bid) and South Carolina is a right-to-work state so BMW didn’t have to worry about organized labor.
David Britt is a member of the Spartanburg County Council. He’s served since 1991, before BMW came to town.
Britt credits BMW with creating an international community in the area. “Since that day, we’ve now landed Volvo, Mercedes, they do the Mercedes vans right here in the Upstate. And all other automotive manufacturing facilities that are in Tennessee, Alabama – those suppliers, they’ve landed here.”
BMW and its suppliers have brought 30,000 jobs to the area. A recent study from the University of South Carolina points to other economic benefits too. Statewide, unemployment is slightly below the national average, around a flat 4 percent.
Britt likes to repeat a phrase that is a common refrain from those who argue for globalization. That the “rising tide floats all boats.”
But it’s that perspective that puts the people in this community at odds with Trump’s stated economic agenda. When it comes to policy coming out of the White House, Britt said “I think there’s a lack of understanding. And I think the president will come down [to South Carolina] and I think he will see what’s happened here. I invite him to come to Spartanburg, I can let him stay at my house if he’d like to, come on down, but I’d love for him to see what BMW and all the other international companies have meant to us. I say to the President and his staff – you guys deal with the countries…and let us deal with the companies.”
But the politics of the global economy are never that easy.
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