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How tariffs in China could cause a meltdown in the American South

While BMW is clearly a German company, the crossovers that are exceedingly important to it are actually made in Spartanburg, South Carolina. And more than that, the Spartanburg plant (physically located in the town of Greer) is where the corporate know-how and capability for those vehicles is concentrated. These are the vehicles – specifically, the BMW X3, X4, X5, X6, X7 – that drove record growth for the company in 2018, according to BMW. But whatÂ’s most notable about BMW Group Plant Spartanburg, given current events, is that according to the U.S. Department of Commerce it was the largest automotive exporter by value for the fifth year running in 2018. ThatÂ’s worth emphasizing: largest automotive exporter by value. Not GM. Not Ford. BMW. And where might one assume that more than a few of those X vehicles are shipped to? China. Some 360 miles southwest of Spartanburg is Mercedes-Benz U.S. International, Inc., in in Tuscaloosa County, Alabama. It started building vehicles in 1997. Since then, Daimler AG has invested in excess of $5.5 billion in the facility. It manufactures the crossover now known as the GLE, formerly the ML-Class. It also makes the GLE coupe and GLS. Daimler describes the Tuscaloosa facility as “the traditional home of SUV production” for those vehicles. When it reported its global 2018 sales, Daimler noted that on a global basis SUVs account “for more than a third of all Mercedes-Benz sales.” According to the Chinese finance ministry, on December 15th the Chinese government will impose a 25% tariff on automobiles (and a 5% tariff on auto parts) from the U.S. Certainly this is going to have a direct effect on the sales of vehicles that are manufactured in the U.S. and exported to China. BMW and Mercedes are going to take it on the chin for the vehicles that they make in plants that they invested in so heavily in the U.S. Which could potentially mean that people in places like Greer, South Carolina, and Vance, Alabama, are going to find themselves in the crosshairs of the combatants. Soo too could Lincoln, which produces vehicles in places like Louisville, Kentucky (Navigator), Chicago, Illinois (Aviator) and Flat Rock, Michigan (Continental). Although the Tesla Gigafactory 3 is rapidly nearing completion in Shanghai, it is worth noting that vehicles built in Fremont, California, are being sold in China in numbers that donÂ’t make Musk unhappy.

How Ford switched gears for the all-new F-150

Editor's Note: This story is authored by Julia Halewicz, a senior editor with AOL's Custom Solutions Group. She holds a Masters in Journalism from NYU and has spent her career as an editor of various newspapers, magazines and digital outlets. Last year on the Friday before Labor Day, the 2014 Ford F-150 pickup truck came off the Dearborn assembly line for the last time. After the last seam was welded, the F-150 that had been so beloved by American consumers would begin the transition from traditional steel manufacturing to an aluminum body, and the second phase of Ford's 2007 blueprint for sustainability would begin. Jobs would be created, and Ford would deliver a stronger product to its consumers. It was a moment Ford would call the biggest in the company's 111-year history. Breaking The Mold For some, the change was almost unfathomable. How could a truck be made with aluminum, and why change what clearly was working very well for the company? "We have a saying at Ford that leaders lead," said Doug Scott, the company's truck group marketing manager. "This was an ideal product to make with aluminum-alloy, because lightweighting made so much sense for a truck, because the extent to which you could take weight out of a truck, you could add more value to the customer in terms of more towing, more payload, more durability, more efficiency – so again all this required us to be out in front further out in front that we normally would be to make sure that we would deliver on all those expectations." Ford began the planning process about five years before the first aluminum F-150 would come to market. The company had a lot of questions. What was customer acceptance of aluminum, could they build the truck, and could the truck be repaired out in the field? Finally, Ford needed to determine if there were enough materials available to support the demand for the F-Series. Aluminum vehicles aren't unusual, but had never been built on the scale of the F-150 – approximately one every minute. Ford created two prototypes to determine if the product would meet and exceed consumer expectations. Any change to the vehicle had to be justified in performance, safety and economy. An aluminum truck needed to be safer, lighter, have increased payload, haul more, and have improved fuel efficiency. After driving the prototypes, Ford knew it was ready to move forward. Once the aluminum truck was ready to build, the next challenge was quickly transforming the plant.

China's auto sales continue to drop

The days of unending growth of carmakers in China look to be over, and some analysts are even forecasting a net drop in volume this year, The Detroit News reports. After falling numbers in June and July, the China Association of Automobile Manufacturers tallied total sales, including trucks and buses, in August to 1.7 million, down 3 percent from 2014. There were some tiny specs of good news in China, but there's no turnaround in sight. Total vehicle sales from January to August are actually still up but only 2.6 percent. Like the rest of the world, SUVs are booming with numbers up 45.6 percent from the previous year. Honda managed a very impressive 50.7 percent gain on the strength of the CR-V and Vezel (the HR-V here), according to The Detroit News. Also, the country's domestic automakers, which generally offer less expensive products, posted a 2.5 percent growth in sales. The news continues to look bad for Detroit's automakers, though. Volume from General Motors dropped 4.8 percent in August, and Ford fell 3 percent in August. Both of them have invested significant amounts there in the past years. The vehicle industry in China grew last year, but there was burgeoning evidence of weakness. At the end of 2014, dealers there pushed back against huge inventories pushed by automakers. Even before the big drops began in June, GM saw the writing on the wall and started cutting prices. BMW responded to the slump by cutting back production to deal with the changing demand. News Source: The Detroit NewsImage Credit: Mark Schiefelbein / AP Photo BMW Ford GM Honda Car Buying