The Detroit three aren’t the only ones desperately trying to cut costs in their operations, as today’s reports have German luxury car maker BMW struggling to reach its 500 million euros (over $766 million) savings goal by the end of 2009. As part of the plan, BMW aims to lay off some 8,100 employees in 2008, but thus far, company sources say the automaker has managed to cut well over 1,000 jobs.
“We said early on that these (job cut) figures can’t be reached,” said union and BMW’s supervisory board member Werner Neugebauer, as per an Automotive News report, citing German daily Handelsblatt. According to the paper, the majority of the company’s 5,000 temporary workers were laid off, but union sources say only a few hundred full-time employees have signed voluntary termination agreements. The automaker’s agreement with its union prevents compulsory job terminations until 2013.
The automaker is also suffering from the rising cost of raw materials such as steel and the weak U.S. dollar versus the euro conversion, as it recently announced it will raise U.S. vehicle prices by 1 percent.
In related news, Chrysler yesterday said it would cut 5 percent of all its non-production related contracts.



06/05, 10:25 AM
posted by:
NoNameDenton1
They could build vehicles in the USA and Mexico and such where productuon cost of the vehicle would be lower.
06/05, 10:32 AM
posted by:
mayer_ray_nagin
Tata is going to buy BMW next year anyway, after which cost cutting will be easy.
06/05, 10:44 AM
posted by:
HemiRoadRunner
I am PISSED that the euro is worth double our money. We kicked europe’s @$$ in WWII, the one’s we didn’t kick the $H!T out of sided with us out of fear. Then, we go back over there at the end of the war and spend BILLIONS rebuilding that fing place, hand them all sorts of buisiness and technology, now their money is worth more? BS.
06/05, 10:54 AM
posted by:
johnnycanuck
I’m crying over my Heineken.
06/05, 11:16 AM
posted by:
Fletch
So this is why the 135i sticker price is so high?
BMW has some cool cars, but I don’t feel sorry for them. Build more plants and a supplier base in the US.
06/05, 11:30 AM
posted by:
shaver
I was going to make some horribly offensive comment about how Hitler could have got the job done and more. But really this industry wide marginalization of the workforce in the name of profits per share is a shame. All of it. From Americans and Germans laid off. Mexicans and other developing nations getting paid less and less. Companies using temps to avoid paying benes and legacy costs. Foreign brands paying US workers 60% of their union counterparts wages. Its BS, the corporations and the wealthy are winning and the middle classes are becoming more and more a myth.
DRFillMycrotch
06/05, 11:44 AM
posted by:
howsmydriving
Now, how about BMW trying to cut OUR costs (of maintenance and repair)? I don’t mind the initial sticker price — it’s the hidden costs after purchase that are killer.
06/05, 12:17 PM
posted by:
BlackX
HemiRoadRunner, thats because we are smarter and thiner.
Stop whining fatass, you can buy everything nearly half price than we in your “land of the free”.
06/05, 12:54 PM
posted by:
xyunya
OK how one can explain that cost if supposedly cheap Mexican beer is identical to cost of Amstel or Heineken or Bass? This is really economical disparity.
As far as whining about cost of Euro – it’s a mute point until you visit Europe. And if you do go to Europe as a tourister, you can afford disparity. As BlackX mentioned, in Europe everything cost twice as much and European salaries are not twice as large as American after conversion. Flat in London cost 1400-2000 pounds per month to rent, makes Manhattan inexpensive. Secy in France makes between 12-15K Euros in a large corporation. Her counterpart in US: (East Coats: NYC, Boston, DC) 25-50K, depending on a skill level (translate at will). In Italy same secy makes 8-10K Euros. Civic in UK cost about 30K USD (15K pounds).
06/05, 3:28 PM
posted by:
NoNameDenton1
The European unions are bigger blood suckers then the American ones and even bigger wastes of space, if BMW did not have to deal with them they would find cost cutting easier.
06/05, 5:36 PM
posted by:
1c3d0g
Fletch: exactly. Although BMW has never been known as a “cheap” automaker, I hope this cost cutting won’t affect their quality.
06/05, 5:50 PM
posted by:
inline6
I’m sorry, but industries get more efficient. The car industry is no different.
Should all car manufacturers pull the robots out of their factories so they can employ more workers? Should they switch from digital and electronic components to analog and mechanical components just so the added complexities will keep workers on the line?
Progress will be made toward greater efficiencies. That’s why 99% of us aren’t farmers anymore. The car industry is no different.
06/05, 5:56 PM
posted by:
Kaizen
We just had an organization meeting discussing sales/lease strategies used by BMW for the past three years. It was a little over my head but the overall jist of the discussion was that based on decisions BMW made to make a huge push into aggressive leasing contracts, they are having to payout several thousand dollars on each vehicle when returned after the lease is over. In addition, they feel that we will see BMW post several quarterly losses for the next couple of years. It shall be interesting.
06/05, 10:55 PM
posted by:
El Aleman
inline6, you took the exact words out of my mouth. Amazing, thanks.
06/05, 11:31 PM
posted by:
NoNameDenton1
Actually inline6 we should throw out the robots, we need nanobots.
06/08, 1:04 AM
posted by:
Impulsive
… and you need a brain, worthless chimp. You are primitive garbage.
06/08, 5:59 AM
posted by:
NoNameDenton1
Once again Impulsive, you prove that you are a troll, and all you know how to do is be rude.
06/08, 11:33 PM
posted by:
Impulsive
Thanks, worthless donkey.
06/09, 6:04 PM
posted by:
NoNameDenton1
Oooo look you discovered a new animal to use as an insult.
06/09, 6:40 PM
posted by:
Impulsive
You are as intelligent and literate as any animal so they can be substituted freely.