A new agreement between ZF Transmissions and BMW will localize the supply chain between the two companies in the Upstate.
In separate statements Friday, ZF and BMW announced that ZF’s Gray Court production facility will manufacture its advanced 8-speed automatic transmission for BMW’s plant located just over 27 miles away in Greer.
“This business win is the largest single order in the history of ZF,” said ZF CEO Wolf-Henning Scheider. “When it comes to the electrification of passenger cars, in addition to pure electric drives, it confirms our strategy to focus on plug-in hybrids as an every-day solution and to develop attractive products in these areas.”
ZF reported it its statement that the order has a “double-digit billion (Euro) value.”
Production of the new generation of the transmission is set to begin at ZF’s Saarbrücken plant in 2022 and then move to Gray Court and China.
Laurens County Development Corporation Executive Director Jonathan Coleman said the move is also a win for Laurens County.
“The announced new partnership with ZF Gray Court and BMW has tremendous potential for the facility in Laurens County,” Coleman said. “This announcement shows that the Upstate of South Carolina is one of the major automotive manufacturing hubs, not only in the US, but in the world.”
The 8-speed transmission is designed to work with both conventional fuel, electric and hybrid vehicles as BMW attempts to cut down on greenhouse emissions.
ZF’s Gray Court plant has been a primary supplier for Chrysler and Land Rover since beginning production in 2013. The local facility has the capacity to produce 1.2 million units per year.
With 11,000 employees, BMW’s Greer plant is its largest such facility in the world capable of producing 450,000 vehicles annually. Last year, the facility produced 357,000 “X” model SUVs.
ZF’s 1.4 million square-foot Gray Court facility employs more than 1,600 people.
According to reports, BMW does not expect tariffs imposed by the administration of President Donald Trump to be an issue in 2019, but the strategy of bringing a U.S.-based manufacturer to the supply chain is telling.
“The same advantages to domestic engine production apply to the economics of transmissions,” Alex Tock wrote Saturday in Bimmer Life. “Either component can rank among the most expensive line items when it comes to building a vehicle, and betting on the U.S. dollar and its advantage as the global reserve currency is one way to hedge investments during times of protectionist trade policy.”