BMW to cut approximately 10% of German workforce.

huu76 submitted on 12/21/2007 Official AutoSpies Timestamp: 1:19 PM
from: edition.cnn.com

[42] user comments | category: Misc News

Tags: BMW, jobs, cost

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BMW to cut approximately 10% of German workforce.

MUNICH, Germany (AP) -- BMW plans to cut thousands of jobs in 2008 to cut costs, the German automaker said on Friday.
The German automaker says temporary workers are most likely to be affected.

Mathias Schmidt, a spokesman at the Munich-based company, did not say exactly how many thousands of jobs would be cut. The Der Spiegel news magazine Web site put the figure at 8,000.
Schmidt said that most of the cuts would come in Germany, where the company employs some 80,000 workers. Those likely to have their jobs eliminated are mostly temporary workers, but some permanent workers would be affected as well.

In Germany, the company has between 6,000 and 8,000 temporary workers. Worldwide, BMW employs just under 108,000 workers, according to company figures.

BMW said in September it would put "all cost structures to the test" and continue to standardize processes to reduce costs for each vehicle in development, production, sales and administration.

It said then that it was targeting a rise in productivity of at least 5 percent per year, and CEO Norbert Reithofer declared that "we will focus the entire organization on the return on capital."

Investors welcomed the move at BMW, pushing its shares up 5.2 percent to close at 42.52 euros ($61.06) in Frankfurt.
BMW , whose brands include its namesake luxury cars along with the Mini and Rolls-Royce brands as well as motorcycles, earned 2.1 billion euros ($3 billion) in the first nine months of 2007, down 2 percent from 2.18 billion euros in 2006.

It attributed the slip to costs related to new market launches for models and production startups, as well as higher costs for raw materials and the "development of even more efficient and fuel-saving engines and the ongoing weakness of the U.S. dollar and Japanese yen."

Nine-month sales rose 11.1 percent to 40.4 billion euros (nearly $58 billion) from 36.3 billion euros in 2006.
The European Central Bank's president warned this week that high prices will persist longer than expected. Year-on-year inflation in November rose to 3.1 percent in nations that use the euro, the fastest surge in six years as energy and foods such as milk and cereals became more expensive.

The euro has also surged against the dollar, threatening to make products of German exporters like BMW more expensive.

http://edition.cnn.com/2007/BUSINESS/12/21/bmw.jobs.ap/index.html Read Article

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nybimmer - 12/25/2007 8:36:30 PM

+1 Boost

Maybe they're firing the crack team that dreamed up the BMW Aztec (sorry, X-6) and the staffers who thought i-Drive was such a great idea?

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chuck717 - 12/21/2007 2:23:56 PM

+1 Boost

Sounds funny to me. You go to a BMW dealer and they tell you to wait for a Mini to be built sold out, wait for a conv 3 series sold out, don't expect to get delivery of the 1 series for 6 months sold out, who is building these cars if there is going to be layoffs or is it another German car MFG trying the old pent up demand trick so you pay more, there is no shortage. That is how subprime meltdown started, create a demand for houses that nobody really could afford?

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EnnNorak - 12/21/2007 2:37:37 PM

0 Boost

Yes, there is something going not they are not telling us about. A red flag goes up for me when they don't walk the talk.

Agent009 - 12/21/2007 2:45:33 PMView My AgentSpace

0 Boost

exactly! There is more to it than this.

ThierryHenry14 - 12/21/2007 4:41:56 PM

+3 Boost

Perhaps its not the manufacturing crew they are cutting. Because BMW spent so much money in 07 on market research and model launches, it could be contracted companies/workers working on these model launches and research.

enthusiastx11 - 12/22/2007 10:16:27 PM

+2 Boost

did any of you notice that shares of BMW WENT UP 5% on this announcement?

BMW...like many european companies...has a bloated cost structure. too much dead wood in the organization. they're just getting rid of some of it.

and i'm gonna go with the opinions of the opinions of wall street investment bankers over yours....

Porschinator - 12/21/2007 2:33:36 PM

-1 Boost

Thats is the only problem (minor) with MBZ and BMW. Their entire image is about prestige. Own a BMW and special. Special comes with a price. BMW does not make econo rides like most Auto comps, only Luxo Sport cars. Typically a price that is out of reach of the majority. BUT BMWs are really not THAT expensive (1+3 and X3 series) the bread and butter of BMW. Yet not cheap enough to lower the over all exclusivity of owning a BMW.

If anything it is the competition that hurt BMW sales and the weak dollar does not help sell cars in the #1 market.

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BMW4me4ever - 12/21/2007 2:50:18 PMView My AgentSpace

+4 Boost

BMW is the #1 in the US in selling of luxury cars. Overall Lexus is stil #1 in regards to cars and trucks. The slide of the dollar to the euro is a reason. It is not uncommon for a company to layoff employees to help balance expenditures to avoid any future trouble. I wish United did that before they went thru bankruptcy and pretty much screwed their entire retired workforces pension plan. BMW has spent alot of money recently in R & D. They dont have a parent company to help disperse the costs. Also, it will take a few years for the new models to pay off in profits. This is also why, BMW is relocating the X3 production from Austria to the plant in Spartenburg, SC. The Z4 production will be moved back to Germany on a more limited basis. This move alone will help alot. BMW will still be the leader in world in sales.

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BigShow50 - 12/21/2007 2:55:20 PM

-8 Boost

So there you have it German fanboys, considering the greatness of such an amazing product even on a global scale. That no matter how successful a car corp can be based on "product-only"...that profit they made still did not cut it for them.(Obviously does not help to offer a free maintanance pkg, considering they loose on average $700 Million/Year) So they have to tell their own people in the nicest way, thanks and piss-off now...As another rival company(cough-cough...starts with "L"), lol continues to show billion dollar profit "quarterly-speaking" that they too will have the global marks of prestige in the near future, let alone vehicles that will drive similar, if not possibly better. It's like a David and Goliath story, no matter how big you are, especially on a global scale, you can fall down just as quick and the damage can be just as big. For the German Corps, this is just a polite "WAKE-CALL!!!"...but only for the better of coarse, let us hope the Germans don't "Shit the bed!"....LMAO!!!

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Bill - 12/21/2007 3:58:27 PM

+4 Boost

Lexus has no prestige in comparison to BMW, Mercedes, heck, even Skoda or Renault or Fiat.

Take that, troll.

S4cabriofoxone - 12/24/2007 12:30:08 AMView My AgentSpace

+1 Boost

No. Most of them are pretty nice, at least on the ClubLexus forums and the like.

One guy on an Edmunds blog realized his mistake and traded his GS for a 5 Series... but his name is still "lexusguy." It's pretty funny, watching "lexusguy" bash the LS600hL.

BMW4me4ever - 12/21/2007 3:15:11 PMView My AgentSpace

+6 Boost

big show. the cough cough " L " has toyota to back them. Lexus would not be able to survive on their own. They try to be their own company, but when you open up the hood on any one of their cars it still screams Toyota. When you have billions of dollars to back a high-line luxury car, then it makes it easier to hide costs. Or when you share parts or R & D it helps tremendously. The Germans are not falling anywhere. BMW still has the largest growth for a company its size of any luxury car maker. Alot of their costs have been spent recently due to the 15 new models due to arrive in the next 2 years. Plus they spent alot of money building the new Euro Delivery center, which is amazing. This is too be expected due to it most likely taking a couple years to recoup the profits. Anyone with any business sense understands that. Lexus .. cough cough Toyota is still a toyota, just lexus skin deep.

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r15mohd - 12/21/2007 4:19:09 PM

-3 Boost

silly people, once anyone even mentions a Lexus/Toyota in any thread...you all stoop to their level and try and argue with them.

if you keep quiet, they'll eventually go away...and this is coming from a Lexus owner/enthusiast.

however, on your last statement...you are lost in your BMW bubble if you continue to believe Lexus is a toyota skin deep. maybe the reason you bring them up constantly or trash on its very existence? they're a threat to your market share...whether you like it or not.

enjoy your space bubble boy! ;)

BMW4me4ever - 12/21/2007 6:15:09 PMView My AgentSpace

+1 Boost

R15 .. underneath the hood of a Lexus, it says Toyota... fact ..

ICON - 12/22/2007 2:46:38 AM

0 Boost

r15mohd- good, now will you just go away. Thanks.

huu76 - 12/21/2007 5:57:19 PM

-2 Boost

Underlying point of the article is "profits drop 2% while sales up 11%.

If volume is increasing, they should be hiring more temporary workers if anything.

If a luxury brand is giving cars away at 2% financing, that tells you what is driving their growth.

BMW4ever,
Lexus charges 8% financing (over 9% if you stretch it past 5 years) and they have no problems selling, and they have no need for an economy 1-series, especially one that will kill their cash cow 3 series (which is priced below the ES/IS btw).

BMW should pray the people who run Porsche will buy them up before Toyota does.

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theoptimisticpessimist - 12/21/2007 6:37:29 PM

+3 Boost

Every Lexus for sale in the U.S. has subsidize financing of 5.59%,even the 2008 600LH, as per Edmunds.com

So who much else is fictional in your rant against BMW.

enthusiastx11 - 12/22/2007 10:18:53 PM

0 Boost

huu:

once again you haven't a clue. european labor laws are the most inflexible in the world. they CAN'T lay off permanent workers...only temporary. so they're doing what the law will allow.

enthusiastx11 - 12/22/2007 10:21:22 PM

0 Boost

huu:

and don't bother bringing up lexus. we have ZERO visibility into their cost structure or profitability as it's all lumped in with toyota.

we don't even know if lexus makes a profit yet. the japanese are very long term focused and will often take a loss for many years to build a reputation.

enthusiastx11 - 12/23/2007 5:14:38 PM

0 Boost

"BMW should pray the people who run Porsche will buy them up before Toyota does."

though publicly traded, bmw is controlled by a private family, the quandts. they have no need nor any intention of selling their family's extremely profitable prized asset.

huu76 - 12/21/2007 6:04:54 PM

0 Boost

It article fails to accurately mention that the Yen has appreciated against the dollar as well.
Since Jan, the Euro has dropped 10% against the USD, the Yen has dropped 8%.

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ThierryHenry14 - 12/22/2007 9:46:53 AM

+3 Boost

10% to 8% over 1 year. But what you failed to point out is that over 2 years, the Euro appreciated 22% vs. the yen's 5%. The currency appreciation is not just measured yearly. The effects last several years.

ThierryHenry14 - 12/22/2007 9:48:06 AM

+3 Boost

btw, the correct term is that the USD dropped, not the Euro dropped or Yen dropped.

enthusiastx11 - 12/23/2007 5:13:08 PM

+1 Boost

"It article fails to accurately mention that the Yen has appreciated against the dollar as well."

why would they do that? what does the yen have to do with bmw laying off temporary workers in germany?

BMW4me4ever - 12/21/2007 6:12:36 PMView My AgentSpace

+2 Boost

huu76 .. Lexus does not charge 8%. Also, BMWFS is offering 3.9% up to 60 months on 328 sedans and coupes only. 4.9% on 335 sedans and coupes. My bank is offering 5.7% to finance to 60 months. Those are the only cars. Have you seen what it costs to lease the new X5, 7-series, 5-series? It almost 2x as much as the BMW. Lexus gives away their cars too. Most manufacturers are in a pinch right now with the slowing economy, so all the luxury brands are seeing their cars being discounted. Also, the financing didnt become available til November of this year on the 3-series. You would know that, if you didnt spend all day praising Lexus.

Have you looked underneathe the hood of a Lexus? Let me know what it says. Actually, it says Toyota all over the car. enough said ...

In regards to profit, do I have to explain the extreme costs of R & D to you, also. Especially, when a company is introducing a 128, 135, 128 conv, 135 conv, M3 coupe, M3 sedan, M3 conv, X6 3.5i & X6 5.0i in 1 years. 9 models in 2008 alone. If and when Lexus does that, then we can talk about BMW's future. Lexus has toyota, who is responsible for most of the R & D costs. BMW has BMW.

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theoptimisticpessimist - 12/21/2007 6:18:16 PM

+4 Boost

I use to work at a BMW dealership for several years, I can tell you this BMW anticipates, they don't react. I think this is more worry of a slow down in luxury products, than internal troubles.

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BigShow50 - 12/21/2007 6:59:29 PM

-2 Boost

WOW...Hey!!! BMW4me4ever...I hear what you are sayin' so you are telling me that Toyota "CAN PLAY WITH THE BIG BOYS"...I myself is a very proud BMW, MB, and Lexus owner till this day. So I am not hating the German brands, these are simple facts of what is going on in the global market scale especially on the competitive edge. Lexus brand for what they sell and the kind of insane profits they bring, along with reliability, performance, and customer satisfaction(let say the general concept of success) is proven everyday, with the rest of the "BIG BOYS". And it just get better, not worse. Your answer is obviuously bias with very little open mind to the auto market as a whole. Leaving your answers with little quality. Hey to each their own...By the way have you ever been to the Main/Head office Toyota Plant in Japan, let alone the Lexus Main/Headoffice in Japan. I have and it is totally 2 different worlds my little friend, when it come to management, the supporting staff and the people who builds them. Which you do not have a clue... And have you actaully been to BMW's headoffice/plant, and MB's too? Which I experience a very respoectable tour...For you probably not.. you as a person who has the money to buy, but little experience about the companies on a more interactive level....that's too bad. You may want to add that on your vacation list, since you like to talk this way. Which I can guarantee it will change your tune a little bit. Oh and by the way BMW fan boy, with out GM's transmission/certain compenents in the 7 series and lower range 3 series, where would BMW in these models be? Please break it down for me BMW fanboy, b/c you seem to know what you are talking about?!?!. And one more thing, back in 1989 when Lexus 1st unveiled their LS400 at the Detroit Auto show...I was there...very little crowd...but in today's world, especially when they unveil the LS460 at the detroit auto(there again), you have every Tom, Dick, and Harry execs from all parts of Germany's auto corps actaully takin the time, atttending, looking, and listening very closely. In your words let's say TOYOTA got them "LISTENING and Learning" a thing or 2...LMAO!!!!

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ghosthunter - 12/22/2007 12:08:03 AM

-3 Boost

let's see.
BMW/MB has been around here for about 80 years or so, and lexus was managed to raise up and took a HUGE market share from them in less than 20 years.
can you imagine giving Lexus 80 years? BMW/MB will be like today's jaguar, weak and powerless.

ICON - 12/22/2007 2:54:44 AM

+3 Boost

Your lips keep flapping and you are not saying anything...enjoy the Koolaid. Stupid sycophant.

Kinger - 12/22/2007 9:47:13 AM

+3 Boost

Stupid comparison ghosthunter, Lexus had Toyota's huge financial backing and a huge amount of marketing in the US. BMW and Mercedes started out from very humble beginnings and built themselves from the ground up. Also Lexus are only successful in the US, where Toyota has done a huge amount of marketing to get Lexus as a recognised brand. I'm not taking away from the cars, its not all marketing, but it certainly had alot to do with it given the nature of the American market.

ThierryHenry14 - 12/22/2007 9:54:40 AM

+2 Boost

ghosthunter...

I don't know if you have realized, but theres a little thing called global integration of business over the past 2 decades. I don't know how much you know about cars, but BMWs were not as widely available 80 years ago in the US (since you are only talking US sales) as they are today, so the first 60 years, they were not really in the US.

But lets keep this simple. Lexus, over 20 years, have not done very well. In the US, yes, in other markets, no. BMW & MB, you can go to Bangladesh, South Africa, Mozambique, Venezuala, Fiji Island, Qatar, and people will know what a BMW and MB is. Can that be said about Lexus?

BMW4me4ever - 12/22/2007 10:32:50 AMView My AgentSpace

+3 Boost

Bigshow .. you have no idea. From an interactive level, I have had more experience with BMW than you could dream of. If you want to see state of the art engineering and delivery center then go to Europe & visit BMW's New Euro Delivery Center. There is nothing like it in the World. Fact ...

Lexus does not equal performance. Any car can go 0 to 60, but how does it handle when it matters most. How do they brake, how much body roll do they have? Did you knwo that most accidents that happen on the freeway are due to people trying to overcorrect the actions of their car? That when they turn the steering wheel to swerve around something and when the car doesnt go the way they would like, end up turning the wheel too far.

My refrigerator is reliable too. It will probably last me 10 to 20 years without any problems, it doesnt provide me any excitement. Did you know that the reliabitlity rate between the top 30 car makes is only about 1 extra issue per every 2 years. Whip dee do. Last time I checked Toyota has had alot more recalls, than BMW. You would know this info, but your head is in lala land.

Where would Lexus be without Toyota? Engine, transmission, drivetrain, leather ... nowhere... fact

Underneath the skin of all Lexus's, says Toyota ... fact. How does Lexus sell in Europe? Not very well. This is with them being over there for about 10 years now..

ThierryHenry14 - 12/22/2007 12:34:55 PM

+2 Boost

Lets stick to the issue. Why is it that Toyota people have to always prove that they are better than BMW. of course economy of scale helps reduce production price. Currency appreciation also hurts certain makes. The fact is, no body but BMW, right now, knows which of the work force is being cut.

I don't want to get into too much, but it is a fact that there are many factors that gets equated into the formula of why labor cuts may be needed. Think outside of the car industry, for the auto industry is not the only industry in a country.

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huu76 - 12/22/2007 1:27:25 PM

-1 Boost

BMW4ever,
Click on the link that says "Canadian Ultimate Sales Drive". 2% APR on the 328, 650, 7 and X5.
http://www.bmw.ca/com/en/index_highend.html

It appears their new standard rate now is 3.9% instead of the old 6.9% they used to charge.

Fact: Toyota > BMW, Lexus > Toyota.

Thierry,
You knew what I meant. Just goes to show that the US will still make and break countries no matter how much they want to deny it.

However, BMW is "supposed" to be a luxury vehicle, hence immune to economic downturns. Read the following to see how much hurt they're in for. A slowing economy and EU regulations that will basically kill the Germans unless a bribe can be worked out.
http://www.economist.com/world/europe/displaystory.cfm?story_id=10329099
http://www.economist.com/business/displaystory.cfm?story_id=10329196

Its unfortunate for BMW taht FOBs aren't considered rich, thereby they'll shift to the 1-series and decrease BMW's profits even further.

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enthusiastx11 - 12/23/2007 5:18:00 PM

+1 Boost

"Fact: Toyota > BMW, Lexus > Toyota."

this is an impossible statement. once again, huu demonstrates is 'intelligence.'

huu76 - 12/22/2007 1:35:36 PM

-1 Boost

Thierry,
btw, in the last 3 years, Canada's currency has appreciated from 0.68 to 1.05 against the USD (50% rise?). Our our economy is still going strong and shows no signs of slowing down, and we have continual gov't surpluses every year whlie our taxes have actually gone down. BMW and Germany can go cry me a river, they'll get no sympathy from anyone but their sheep because they've been poorly managed by some BS CEO.

Most ppl here didn't realize that MB competes with Toyota across the full spectrum, they've only realized that the MB Star really isn't anything special beyond image since the B-class arrived.

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BMW4me4ever - 12/22/2007 3:28:33 PMView My AgentSpace

+2 Boost

huu76 -- that is only in canada.

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Matthew1 - 12/23/2007 4:43:47 AM

+3 Boost

huu76 just has nothing better to do with his life.

He has a superiority complex and thus spends his life digging up stories on the internet to further boost his ego and prove how powerful the US is.

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LexusLion - 12/24/2007 2:36:32 AM

0 Boost

I guess this is what happens when you build an automobile that breaks down easily and is very expensive to fix. Oh well, it was fun while it lasted. Maybe BMW will merge with Chrysler?

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