The 2011 Super Bowl rocked. Well, at least the game rocked. Between fans being turned away from unsafe seats, a not-so-hip halftime show and a cringe-worthy national anthem faux pas, the ancillary entertainment quotient this year sorta fell flat for me. Even the commercials – while not the worst I’ve seen – didn’t give me the charge they have in the past.
But one commercial made me sit up in my seat and grabbed my attention.
Did you see BMW’s commercial for its commitment to US manufacturing, featuring its workers and facilities at BMWNA’s Spartanburg, SC plant? It was spectacular.
And yeah, I really liked the Detroit-Eminem-Chrysler piece too. But it seemed a bit like propaganda to me. A little too ‘rah-rah.’ With a dash of ‘whistling past the graveyard’ in it.
Nope. For my money, BMW said the right things, in the right tone, that US manufacturers would do well to remember through the year. It spoke in no-nonsense language, stating specifically what they do and why they do it. Check it out:
I saw 4 things that US manufacturers should pay close attention to in this commercial, and that should help drive our movement toward a comprehensive national industrial policy:
- Build Where The Market Is – Like soft drink manufacturers have for years, higher technology manufacturing will begin to make sense closest to where consumption takes place. Technology has enabled this shift, and BMW is just one of many examples of OEMs finding huge savings, innovation advantages and supply chain efficiencies in embedding production within markets. And this goes for the US market or emerging economies like China or India.
- Exporting Takes Courage and Commitment – BMW has invested over $4-billion in its Spartanburg, SC, plant. This didn’t just happen by accident. The proximity, government cooperation, community, economics and long-term strategies folded into a complex but sensible equation that benefited all parties. The investment was large, but the potential rewards are great. And in case you think this paid off overnight, BMW began building this indigenous strategy in 1992. The US government would do well to study BMW’s strategies and apply them to its own policies going forward. You can’t win if you don’t play.
- Foreign Manufacturing Doesn’t Mean You Hate Your Country – We need jobs. Desperately. But think for a minute if the shoe was on the other foot – imagine GM building vast industrial facilities in China, where consumption will reward those that invest, and what those efforts might mean for our own economy. (Oh, wait – they are.) You can bet the Germans are not disappointed in BMW’s Spartanburg strategy. Xenophobia is poison in a global manufacturing economy. It’s actually unpatriotic to not pursue opportunities in other markets to improve our export stature. Understand that our problems didn’t come from manufacturing in low-cost countries – it came from not protecting our base at the same time.
- Foreign Manufacturers in the US Offer Huge Opportunities – Look at the people in the commercial. They’re locals. Sure, there are probably more than a few cats from corporate. But is anyone willing to argue the impact of jobs on a local economy these days? And how about the opportunities to plug in as a node in a supply chain like BMW’s? BMW says that 40 of it’s 170 North American suppliers have located close to the Spartanburg plant. Manufacturers must market to and communicate with these international companies as more adopt production strategies like BMW’s in the US. And they will.
Small and mid-sized manufacturers in the US – not just the large, multinational OEMs – should embrace manufacturing strategies that capitalize on regional and foreign markets. Whether you’re comfortable with it or not, it’s not going away & it’s only going to become more prevalent.
BMW’s model works, makes sense and we’re going to see more like it – both here in the US and abroad. So what are you doing to set your business up for success in emerging markets?
Overseas, and here at home?
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My first thought on the BMW analogy is a question. What are the Spartanburg plants used for? Assembly or actual machining and fabricating? I have always wondered how much of these parts were still made in Germany. Do they purchase the robotics from American Companies or are they imported here from Germany? Don’t get me wrong a job is a job but I just want to make sure that we are not over inflating the benefits of BMW or Nissan or Kia or any other plant opening here. Remember, if we didn’t have the manufacturing base before WWII that we had, all the assembly plants in the country would have been absolutely no help in preparing for war. The bottom line here is that we need to Keep American machining and fabrication here and thriving.
Dan, great question. The issues here, in my view, are two-fold.
First, BMWNA in Spartanburg seems to be primarily an assembly facility, with tons of production around it – welding, painting, etc. But that production center manages and sustains 40 local manufacturing suppliers and 170 machining and manufacturing suppliers around North America. I know you know this, but this is why strong indigenous manufacturing is important to any economy – it’s the trickle-down that sustains local economies. BMW’s model does that – that’s one heckuva lot of jobs that the mother ship creates.
Second, I believe that this sort of ‘continental’ manufacturing model – making stuff closest to consumption – is gonna be bigger than the reshoring trend. As more global companies see the savings and agility from embedding production nearby, they’ll create the same sorts of MEANINGFUL jobs and ecosystems that’ll feed other businesses.
While I’m sure there’s SOME capital equipment in the BMWNA facility, it’s the satellite suppliers that buy and engage more machining and fab equipment than they could fit in Spartanburg.
Thanks again for the great question and listening to my take. Hope you’re well and kicking it, bro.
I knew you would have all the numbers! I agree 100%. Re-shoring, while it sounds patriotic and like a no brainer, isn’t all that it is cracked up to be. There are quite a few jobs that left our shores that are probably better off somewhere else because they would be very very low paying jobs anyway. We need to create an environment that swells our manufacturing capabilities. Free and open markets are the only way to achieve this. (I hope that the white house understands this).The down side to GM or Ford or Chrysler setting up factories in China is not as bad as people would expect because of the fact that even Chinese companies are starting to open manufacturing facilities on our shores. Granted they have a long way to go before they are on a level playing field, but I can remember the same conversations about Japan 30 years ago. It all comes back around to where the money starts!
Dude, you nailed it with that last line. We need to understand and capitalize on how borders are redefining themselves and get into emerging markets and technologies now. Spot on, Dan.
For my money, Chrysler’s commercial was still the best Super Bowl ad there was.
Quite a few years ago, the industry underwent a transformation where young buyers stopped looking at Toyota, Nissan, and Honda as imports. Because after all, they were made in Kentucky, Tennessee, and Ohio. There was more domestic content in a Honda Pilot than in a Ford Mustang.
It seems BMW is going after a bit of the Made in America bug themselves. I’m not sure this is a wise move for them. While it might work for VW, I believe part of what sells BMW is the German engineering. While many of us understand the difference between engineered-in-Germany, and made-in-Germany, most buyers do not. For most buyers, it’s from where it’s from. There’s a reason German’s design the best handling cars in the world – they drive on the Autobahn all the time, not just on a closed loop test track.
Anyway, I did think it was a good ad. I’m not sure it’s what BMW should make their main theme in advertising.
You’re right, JF. There probably is a bit of xenophobic grand-standing in all of ‘em and I agree it’s a little precarious to paint oneself into that ‘made here’ corner. But despite its legacy, Chrysler is after all an Italian-owned brand now. So, being picky (and I do that from time to time), the Chrysler add went after the same bug.
For pure entertainment value, the Chrysler ad was slicker and oozed a lot more cool. I’m a bit Eminem fan, and I actually like Detroit and pull for ‘em to come out of this as strong as I can. But as manufacturing in general starts to cluster its production closer to consumption, I think every large foreign brand will step out touting Made In The USA until it wears off. And certainly down here in the south, we’re grateful for what plants like NCR, BMW, VW and Kia are doing for employment and our localized economies.
So, despite the Chrysler ad being cooler, for my tastes the BMW ad sent a message that resonates in a healthier way with manufacturers and engineers on the gemba.
What’s REALLY cool is that you stopped by for a visit. Thanks for the take, man.