Schaefer makes Maryland's pitch to Mercedes-Benz

STUTTGART, GERMANY — STUTTGART, Germany -- Gov. William Donald Schaefer pitched Maryland to Mercedes-Benz yesterday, but the company remained uncommitted about building a car manufacturing plant in the state.

Klaus D. Rettig, a spokesman for Daimler-Benz AG, Mercedes' parent company, told the governor at a meeting and luncheon at Daimler-Benz's sleek new headquarters here that the company had made "absolutely no decision" on the plant location.


Mr. Rettig said the "first cut" would be made in July and that the final decision was scheduled for September or October.

"If we stay in [the running] till July, Mark will be able to flood them with information," the governor said, referring to Mark L. Wasserman, the state's secretary of economic and employment development, whoheaded the promotional team the governor brought to Europe.


Mercedes plans to build a plant to manufacture a new, sporty, four-wheel drive "fun" car in the United States. The company expects to make 50,000 to 70,000 cars a year, shipping two-thirds of them back to Europe, mostly to Germany.

Mr. Rettig said somewhat facetiously that, unhappily for him, Hawaii and Alaska -- two places he likes to vacation -- had been eliminated. In fact, the entire West Coast has been scratched.

The site will be selected, Mr. Rettig said, from a "banana-shaped" region stretching from New York to the Gulf Coast. The plant will make the first Mercedes autos manufactured outside Germany.

The company expects to spend $650 million on the plant and to employ about 1,500 people. Engines and gear trains will be shipped fromEurope. Everything else will be made in the United States.

"We want to deliver the first cars in the beginning of 1997," the Mercedes official said.

North Carolina, with its lower labor costs and right-to-work laws, has led in the early betting. Daimler's Freightliner truck plant is there.

But Mercedes has its Northeast regional sales headquarters, a vehicle-preparation facility, an auto parts distribution center and trading center in Maryland. About half of the 63,000 Mercedes cars shipped to the United States enter through the port of Baltimore.

Mercedes' endgame strategy would come into play after the July cut, Mr. Rettig said. "Then the real horse-trading begins."


In presenting Maryland's case, the governor's team stressed what it called the quality of the work force, advantages of being near the port of Baltimore, favorable state and local tax structures, the enterprise zone program, availability of worker training, the interstate road network, a superior cultural milieu, the proximity to Washington and a German school in Potomac.

"You will receive customized service from us," Mr. Wasserman promised.

Mercedes, for its part, has experienced wrenching internal debate over its strategies in the wake of falling sales and plummeting profits. High-quality "German workmanship" turns out to be insufficient in a period of worldwide recession, when

the Japanese produce cars of equal luxury and integrity for half the price.

"This is a historic time for German industry," Mr. Rettig said. "We wake up from a sleep of confidence we perhaps had for the last 20 years."

Yesterday's meeting was equally frank and friendly.


"I'm positive they got no bad vibes," Mr. Schaefer said. "They got good vibes from what we presented."

The governor has been touring Europe like a traveling salesman. He stopped first in Slovenia, where he promoted Westinghouse Electric Corp.'s new airport air-control system. Mr. Schaefer then visited Slovakia.

He and his entourage arrived in Stuttgart Sunday.