As Auto Parts Plant Marks Milestone, Management Worries Over Tariffs
NORTH CHARLESTON, SC—The Cummins Inc. factory here assembled its 5 millionth turbocharger earlier this month, marking a milestone at the plant, which is on track for a record year of production.
One of six Cummins turbocharger plants worldwide—and the only one in North America—the factory is on track to assemble a record 760,000 turbochargers this year for medium- to heavy-duty trucks, including the Dodge Ram pickup.
The 250,000-square-foot factory plans to add about 50 workers soon to staff a sixth assembly line, which is scheduled to be installed next year. The new, $3.5 million assembly line—the third expansion since the plant opened in 2006—will add about 100,000 units to the plant’s annual capacity.
Despite that success, plant management is concerned about the impact of tariffs. “Trade has been a key driver of growth for Cummins and the turbocharger business over the last decade,” Shon Wright, general manager of Cummins Turbo Technologies, told the Charleston Post and Courier. “Ultimately, tariffs will be a threat to that type of growth.”
Parts made in China and assembled in North Charleston are a vital part of Cummins’ production process, and the increased costs of those parts due to tariffs imposed by President Donald Trump are starting to have an impact. The company also has been hit by higher prices for raw materials, like imported steel.
Wright estimates the tariffs will cost the turbocharger division up to $20 million over a year’s time. “So far, we’ve eaten those costs and that is what’s becoming a challenge,” he said. “That comes off the bottom line. We can only eat those costs for so long before we have to look at what else we can do.”