Magna International Inc. will take over production of seats for the BMW X5 and X6 crossovers in Spartanburg, S.C., next year after Lear Corp. decided to end the business.
Lear CEO Matt Simoncini told Automotive News that Lear will discontinue making seats for BMW for the next generation of the two X-series vehicles while continuing production for the X3 and X4. He called the outcome "a little bit of an unfortunate situation."
Lear has supplied seats to the BMW plant in Spartanburg since it opened in 1994.
"We had a great facility and relationship with BMW, and it's disappointing when this happens, but we made the conscious decision not to sell at a loss. ... The BMW business wasn't making money for us," Simoncini said, referring to the plan for the upcoming programs.
He characterized BMW's pricing expectations for the next X5 and X6 as "irrational pricing."
BMW declined to comment.
Magna is wasting no time. Last week, it broke ground near Spartanburg for a seating plant that will open in June. The 230,000-square-foot building will include assembly and sequencing lines dedicated to the BMW seats.
"This is a new chapter in the ongoing collaboration between Magna and the BMW Group, as it's our first seating business award with this valued global customer," Magna Seating President Mike Bisson said.
The BMW plant manufactures the X3, X4, X5 and X6 models.
The larger X7 is being added to the production lineup to go on sale as early as 2019.
Magna's three other South Carolina plants supply BMW with vehicle bodies and chassis, mirrors and exterior parts. They collectively employ 1,450 people. The seating plant will employ 480 new workers by 2020.