NORTH CHARLESTON, S.C. -- Volker Mornhinweg, worldwide head of Mercedes-Benz Vans, couldn't believe his ears when he learned what Mercedes-Benz Vans has been doing to avoid the American "chicken tax" on imported trucks.
It involved manufacturing -- but not the kind that made sense to Mornhinweg, a trained engineer who prizes logic and efficiency.
For the past decade, to sell its vans in the U.S. without the punitive 25 percent import tariff, Mercedes-Benz built the complete vans in Germany, disassembled them and shipped the pieces to South Carolina, where American workers put them back together in a small kit assembly building here.
That way, the vans emerged as "locally made" -- free of the import tariff.
"I really couldn't believe it," a visibly annoyed Mornhinweg told Automotive News. "To build up and tear down, that's really something that hurts me, personally. And the costs!" he said, shaking his head at the memory.
Mornhinweg made the discovery when he was put in charge of van operations in 2010. Since then, converting the process to something more sensible has been a priority for the company.
Mercedes-Benz Vans intends to phase out that awkward supply chain. Starting with the next-generation Sprinter van, probably in 2018, Mercedes will assemble the vans normally in South Carolina on a new production and paint system that the company is building at a cost of $500 million.