BMW to Reduce Workforce in EU6 Billion Savings Plan

[mexglx]

If this is inappropriate for this forum let me know. Just thought it was interesting.

BMW to Reduce Workforce in EU6 Billion Savings Plan (Update1) (Bloomberg – December 21) -- Bayerische Motoren Werke AG, the world's largest luxury carmaker, will scale back its workforce under a plan announced three months ago to boost profit with 6 billion euros ($8.6 billion) in spending cuts. The carmaker will eliminate jobs by not replacing people who leave and through contract agreements on work-time flexibility, said Mathias Schmidt, a spokesman at Munich-based BMW. Schmidt wouldn't confirm a report today in German magazine Der Spiegel's online edition that 8,000 positions will be cut next year. Chief Executive Officer Norbert Reithofer outlined the five- year savings program in September after BMW's profitability lost ground to Daimler AG's Mercedes-Benz Cars division. The automotive division aims by 2012 to raise its return on capital employed to 26 percent from 22 percent last year, and reach a return on sales of 8 percent to 10 percent, versus 5.9 percent. http://www.bloomberg.com/apps/news?pid=20601100&sid=aCTlVLEPvxaA&refer=germany

[cracka]

Here's hoping jobes isn't one of 'em! To jobes! :biggrin:

[larryn]

It's really disgusting that corporations feel the need to continually increase profits, yet the workers that got them there are treated like dirt. You don't reduce the bottom line by 6 billion euros by not refilling positions.

This smacks of the same crap the oil companies are doing, ever increasing record profits, yet they feel the need to continually raise prices at the pump and reduce jobs.

The middle class will be non-existent in a few decades at this rate.

[Brookside]

No, it's not off topic because it concerns the fulltime and parttime workers in the Leipzig plant which builds the 1-er.
What's interesting is that BMW in the past has just about guaranteed their workers job security. That's changed, obviously, and it's just a part of an overall strategy (more part time workers with less benefits, recent pressure on suppliers to cut cost/maintain quality) to increase profits.

Sounds too familiar and depressing.

[Brandon26pdx]

When the middle class starts feeling the pinch enough they will start voting and acting accordingly.

The fat cats that control the corporations (and line their own pockets in the process) are allowed to do so because the middle class basically allows them to do so. That's the philosophy I have to believe as an American anyway...

[larryn]

I was talking about the middle class globally. Voting accordingly hasn't been an option here in quite some time. Every politician has an agenda and our choices have been he who raises the most money gets to be on the ticket.

[Brandon26pdx]

Originally Posted by larryn

I was talking about the middle class globally. Voting accordingly hasn't been an option here in quite some time. Every politician has an agenda and our choices have been he who raises the most money gets to be on the ticket.

The polititians are a symptom of the problem, not the problem itself. Again, thats just what I believe.

[1050Wien]

What sickens me is that the basis of the decision appears to have been made "after BMW's profitability lost ground to Daimler AG's Mercedes-Benz Cars division." So they are still making plenty of money but MB is making more so this is BMW's counter?
They better not forget what has made them the company they are today. If the reduction in workforce translates to the final product, they will regret it.

[larryn]

True, they are still making record profits (over and over again, quarter after quarter), but somebody made more in one quarter, so they react with reductions in force.

[Brookside]

Originally Posted by 1050Wien

What sickens me is that the basis of the decision appears to have been made "after BMW's profitability lost ground to Daimler AG's Mercedes-Benz Cars division." So they are still making plenty of money but MB is making more so this is BMW's counter?
They better not forget what has made them the company they are today. If the reduction in workforce translates to the final product, they will regret it.

+1!
I think you nailed it...BMW and the Quandts especially are obsessed with Mercedes which now seems to be back in the saddle w. increased profits, some attractive automobiles (the new C is sweet-) and improved quality.

[asv]

I don't see anything unusual about BMW's actions, its a typical cost cutting move thats a fact of life in today's global corporate business climate. BMW is a corporation, not a charity, profit maximization is a fact of life.

I don't think this move will affect quality at all, but it does indicate a trend, which could lead to future moves that affect quality.

[mikeo]

I think this is a sea change for BMW AG. We may see far reaching ripples (do I smell prices burning rubber trying to get higher?) over the next few years.

Larry, do you think this best fits in the GENERAL/OTHER area?

[edge350]

1. You can't bash fat cats on a webpage where people are lining up to spend $50,000 on a car. You're reading this because you are either (1) wealthy, (2) have family who are wealthy or (3) you're lousy with money. I happen to be in the third category, but I don't begrudge the first two.
2. BMW doesn't build cars out of the goodness of their hearts. Corporations are supposed to make money. The reason BMW is in business today is because they've screwed people in the past. There are people who will never buy BMW's for that very reason.

My point is it's just a car. If you really care that much about "social issues and stuff" you're on the wrong webpage. If really you thought long and hard about corporate practices, you'd end up living in the woods. Good luck with that.

As for me:
Base MSRP $34,900
Alpine White $0
Coral Red Boston Leather $0
Glacier Silver Aluminum Trim $0
Premium Package $3,300
Sport Package $1,000
Active Steering $1,400
Comfort Access system $500
Navigation system $2,100
iPod and USB adapter $400
Satellite radio $595
Destination & Handling: $775
Total MSRP as Built $44,970

[Nixon]

Hopefully they aren't going to ax Chucky!!! I mean, we joked about him, but only because he got to drive the 135i waaaay before any of us.

[abc]

Originally Posted by larryn

True, they are still making record profits (over and over again, quarter after quarter), but somebody made more in one quarter, so they react with reductions in force.

all the nasty nature of publicly held companies, answering to shareholders. you almost must show growth* quarter after quarter, indefinitely. Growth can come from so many things.