Steel of a Deal: BMW Looking at Sourcing More Carbonized Iron From U.S.

Matt Posky
by Matt Posky

As nations continue plotting how to best stab each other in the back in the wake the United States’ decision to impose steeper tariffs on aluminum and steel, manufacturers have to find a way to roll with the punches. Domestic BMW dealers have begun crapping their designer britches over fears that 3 Series models will suddenly host MSRPs in excess of $60,000 if the Trump administration follows through with a threat to impose high import duties on cars.

While we don’t know if the 25 percent import tariff on cars will come to pass, we do know the very real steel tariffs will shrink the profit margin of many vehicles. However, BMW is one of the first automakers we’ve heard discussing the purchase of more U.S. steel to mitigate costs.

On Friday, the automaker announced it was seriously considering boosting the amount of locally sourced steel for its U.S. factory.

BMW’s plant in Spartanburg, South Carolina, is the automaker’s largest in terms of production volume. It currently sources more than 70 percent of its steel from within the United States.

“We have a target to increase the U.S. percentage, which is dependent on the availability of appropriate specification and quality,” the automaker said in a statement.

The facility is currently responsible of the brand’s popular SUV models, which includes the X3, X4, X5, X6, and X7. As a result, the plant was the largest vehicle exporter by value from the United States in 2017.

[Source: Reuters] [Image: BMW]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Big Al from Oz Big Al from Oz on Jun 02, 2018

    Matt, I can appreciate and respect your far right views. But please don't publish complete trash, or as your Mesiah, Trump would say "fake news". Now, what countries are stabbing each other in the back? If you bothered to research you would see how nations, ie, Germany, Mexico, Canada, even the EU are formulating (collaborating) a plan of attack. How does this equate to back stabbing? Please, with what journalistic integrity you have understand the concept of sincerity in what you produce. To the TTAC Editor. WTF do you edit?

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    • Big Al from Oz Big Al from Oz on Jun 06, 2018

      Volvo, Thanks for the comment. I'm of the belief the US still has much potential. But I also believe the US is at a tipping point. I don't believe that the current President is taking the US down the correct path in maintaining maximum US influence. You pointed out why you don't understand some of the previous nagative sentiment towards the US. Well the US contrary to many views profited extensively from it's previous dominance. Some around the World percieved this as US abuse. Fortunately enough saw this and became more like the US. Now many of the countries that wanted the life of the US are competing, like the US. This is now a percieved fear issue in the US. The US is becoming more reliant on others and not the other way round. Control is what its about. But Trump needs to understand collaboration and consensus. This is how the rest of the World has been operating for decades. The US needs to have trust in its friends and Allies. Trump is divisive and is polarising the US and the World.

  • Cdotson Cdotson on Jun 02, 2018

    The headline is fake news. No such thing as carbonized iron. Elemental iron does not exist in nature; iron ore must be DE-carbonized to make steel.

  • Voyager Voyager on Jun 03, 2018

    Foreign car brands will be inclined to move (even) more production capacity to the U.S. Which is good! Then again, Trump should ask himself why Mercedes (that he hates so much) has become such a coveted premium brand. A quality product despite the fact that its cars are already more expensive without even taxing higher import tariffs? Superb marketing? Mercedes is sponsoring events like the NY Fashion Show and the U.S. Open... Cheapskate Cadillac thought that moving its HQ from Detroit to NY would cause a fresh breeze of change. Go figure.

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    • Ect Ect on Jun 04, 2018

      voyager, a tariff on steel will reduce auto production in the US, not increase it. The tariff raises the price of steel and aluminum, which carmakers use a lot of. The tariff on imported vehicles is not affected, so foreign-made cars get a price advantage in the US. Brilliant strategy - NOT!

  • Sub-600 Sub-600 on Jun 05, 2018

    “From each, according to my needs” - Bernie Sanders, “Mein Kapital”