Greenback Business

BMWs produced in South Carolina, Mercedes Benzes made in Alabama -- the carmakers may have been among the first German firms to succumb to the charms of the American Old South, but they're not likely to be the last.

The strong euro and a weakened dollar have made the option of opening a production facility in the US more attractive than ever for German industrial heavyweights.

Volkswagen is currently shopping for a factory location, and the ThyssenKrupp concern is currently building a $3.7 billion (2.5 billion euro) facility in Calvert, Alabama, due to be finished in 2010.

It's the up-and-coming southeastern US states that are benefitting most from the influx of German companies, which employ some 80,000 people in the four states of Alabama, Georgia, South Carolina and North Carolina alone.

In addition to an abundance of land, low labor costs and minimal bureaucracy, these southern states also hold the trump card of hefty tax breaks and millions of dollars in incentives to attract foreign direct investment.

Carmakers at home in the South

The trend towards German firms seeking manufacturing sites stateside may be picking up pace, but it is certainly nothing new, especially for the auto industry.

"The trend has been in evidence here for over a decade," Kristian Wolf of the German-American Chamber of Commerce USA-South told the German news agency DPA.

The Daimler group recently marked the 10-year anniversary of its plant in Tuscaloosa, Alabama, home of the Mercedes M-Class.

BMW has been producing vehicles in Spartanburg, South Carolina since the mid-1990s, and is looking to double its capacity to 240,000 cars per year in the medium term. In future, all of the company's SUVs will be made in the US.

"There's a long tradition of German companies in South Carolina," BMW spokesman Robert Hitt told DPA.

In addition to low production costs, German auto industry executives are also likely to be pleased by the fact that, in comparison with the US' traditional motor city, Detroit, workers' unions in the South tend to be much more loosely organized.

And the German workers who make the move to the US are also happy with their company's choice of stateside location.

"It's not so cold here, and it snows a lot less," Hitt said.