A NEW van body plant is helping some customers save money on taxes and shipping.
The recently completed Morgan Olson plant in North Charleston, South Carolina is a ship-through operation just down the road from where Mercedes-Benz USA assembles its Sprinter vans for the U S market.
Sprinter cargo vans are built in Germany and disassembled. Certain parts are placed in containers and shipped across the Atlantic. When they arrive in Charleston, they are reassembled.
The process adds hundreds of dollars to the cost of a vehicle, but it saves thousands of dollars in tariffs. Blame the chicken tax.
This year marks the 50th anniversary of the implementation of the 25% tariff levied on light trucks. Years ago, President Lyndon Johnson implemented a 25% tariff on certain imported goods in responses to a dispute over selling American-grown chickens in Western Europe. The tax has long been removed from every imported product—except light trucks.
While the new Morgan Olson plant can’t address the inefficiencies that come with disassembling and subsequently reassembling trucks, it does add efficiency to the process of mounting van bodies on Sprinter chassis.
“Daimler suggested that we build a plant here,” says Steven Parker, plant manager. “Until we opened this facility, the trucks had to be shipped from South Carolina to our Sturgis, Michigan, operation. We are saving a lot of time and wasted motion. Our delivery times are really fast. We are delivering completed vehicles to the customer in about four weeks.”
Mercedes and Morgan Olson are less than four miles apart from each other in North Charleston. MBUSA employees drive the chassis from the Sprinter plant and return completed vehicles for entry into the chassis manufacturer’s freight system.
“This arrangement slashes freight costs for dealers and customers,” says Steven Parker, plant manager. “Between the Mercedes and Freightliner brands, these Sprinters go to 220 dealers across the United States.”
Morgan Olson opened the plant officially in February with a celebration that included speeches by South Carolina governor Nikki Haley; Mike Ownbey, president of Morgan Olson, John Poindexter, owner of Morgan Olson; and Claus Tritt, general manager of MBUSA Commercial Van Division.
“The governor was very gracious,” Parker says. “She spent about 90 minutes here between speaking and touring our plant.”
Wolf-Dieter Kleimeier, former head of body builder support for Mercedes, is Morgan Olson’s director of Sprinter operations. He assisted in site selection as well as plant layout.
The company was able to locate a 200,000-sq-ft building near the Sprinter facility. Morgan Olson currently uses just over half of the space. The company signed a lease in July 2012 and spent the next several months modifying the building for truck body production. The structure previously had been used as a logistics warehouse.
“We needed to make a lot of changes to the building,” Parker says. “It needed additional electrical service, compressed air, and larger doors for us to get vehicles in and out.”
Once tooling was installed and staff trained, the company began limited production in November.
Laying out the plant
The plant is designed to minimize material flow.
“We don’t have a warehouse,” Kleimeier says. “Everything is stored line-side. When we receive a load of raw material, we take it off the trailer and put it at the workstation. The next time the material moves is when the operator picks it up to make it part of the vehicle.”
The plant also has very little in the way of fabrication equipment. Coils of aluminum and translucent fiberglass are cut to length, but the aluminum used for the sides of the van bodies is cut to length and ready to be assembled. Extrusions also are delivered in the required length.
“The company’s headquarters plant in Sturgis, Michigan, produces most of our parts, but we are exploring the possible use of local suppliers to reduce delivery times and freight costs,” Kleimeier says.
Sister company Morgan Corporation supplies wood flooring from its Pennsylvania facility. The laminated flooring is undercoated with an automated system before being shipped to South Carolina, eliminating the need for an undercoating operation at the North Charleston plant.
“Our goal in designing this plant was to have convenient part storage, assembly, and install,” Kleimeier says. “We assemble as much of the body as possible before it touches the chassis.”
Consistent with that, Morgan Olson sets aside a major portion of its plant for the production of subassemblies. Each subassembly area is located as close as possible to the point on the assembly line where needed.
What they make
The plant primarily produces the Morgan Olson UDV (Ultimate Delivery Vehicle), a van body that is installed on the Sprinter cutaway chassis. Morgan Olson also builds walk-in vans on Ford and Freightliner chassis, but that work is done at the company’s headquarters in Sturgis.
The van body assembly line in North Charleston is designed to assemble and mount 10 bodies per day. But in addition to the van body line, the plant also is set up to upfit conventional Sprinter vans. The upfit line is set up to complete 12 units per day, but that number could easily reach 22-25 vehicles per day if the work consists of basic van interior packages.
Morgan Olson has established partnerships with several truck equipment manufacturers for installations at the North Charleston plant. The company is a recognized dealer of Ranger, Knaack-Weatherguard, and Leggett & Platt van interiors. The plant also partners with Thieman, Tommygate, and Palfinger for liftgates.
“We are exploring other companies to serve as partners with us,” Kleimeier says. ♦