Title: BMW and Mercedes-Benz first international plant location decision: the site selection and negotiation process in the USA

Authors: Michael C. McDermott

Addresses: Haile US Bank College of Business, Department of Management, Northern Kentucky University, Nunn Drive, Highland Heights, Kentucky 41099, USA

Abstract: In the early 1990s, BMW and Mercedes-Benz decided to establish their first international production facility. Both chose the USA, their single largest international market, yet they planned to export the majority of its production. This paper, based upon interviews with host country executives of both companies, state officials, and politicians, examines the nature and duration of the site selection process of each company. BMW and Mercedes adopted a very different approach to the decision-making process and in their negotiations with state policy-makers. Although the internationalisation process is well understood, the site selection decision-making process of auto producers (and indeed multinationals in other sectors) is a neglected area of international business. This paper aims to address this void, and encourage further studies in this area.

Keywords: BMW; exports; Germany; Mercedes-Benz; automotive production; site selection; negotiations; USA; United States; plant location decisions; automotive plants; automobile industry; decision making process.

DOI: 10.1504/IJATM.2014.060752

International Journal of Automotive Technology and Management, 2014 Vol.14 No.2, pp.172 - 193

Published online: 29 Apr 2014 *

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