BMW may apply for aid from the German government

[Mark]

American carmakers recently secured a multi-billion dollar loan guarantee from the federal government but their counterparts across the pond haven’t been so lucky. Late last year the European Commission approved plans to provide up to $6 billion to its automotive industry, far short of the $55 billion in loans Europe’s carmakers had been hoping for, and since then no aid package has been finalized.

According to a new report, BMW is now considering applying to the German government for a state guarantee to back up its borrowings. The news was first reported by Bild Zeitung, which claims BMW Group – which includes the sales of BMW, Mini and Rolls-Royce - is reeling after its sales worldwide dropped 4.3% for 2008. Late last year, Volkswagen also approached the German government seeking guarantees for its financial divisions to cover refinancing of car loans in December.

Incidentally, BMW was one of the most vocal carmakers to criticize the aid package being offered to the Detroit 3. The German carmaker said the aid package would only serve to “distort competition” in the industry and that it should be offered to more companies.

Other countries around the world to start offering state aid to their local automotive industries include Australia, Canada, Spain, and the UK.

Meanwhile, BMW announced today that it would reduce the working hours for more than 26,000 German employees as part of efforts to slow production. The cuts will be limited to facilities in Dingolfing, Regensburg, Landshut and Berlin.

Source: http://www.motorauthority.com

[e92phreak]

Wow, they would be hypocrites if they went thru with it.

Well, if a financial giant like BofA is going thru the pains, not surprising that BMW is not immune.

[Bimmer Al]

Originally Posted by MarkE90M3

American carmakers recently secured a multi-billion dollar loan guarantee from the federal government but their counterparts across the pond haven’t been so lucky. Late last year the European Commission approved plans to provide up to $6 billion to its automotive industry, far short of the $55 billion in loans Europe’s carmakers had been hoping for, and since then no aid package has been finalized.

According to a new report, BMW is now considering applying to the German government for a state guarantee to back up its borrowings. The news was first reported by Bild Zeitung, which claims BMW Group – which includes the sales of BMW, Mini and Rolls-Royce - is reeling after its sales worldwide dropped 4.3% for 2008. Late last year, Volkswagen also approached the German government seeking guarantees for its financial divisions to cover refinancing of car loans in December.

Incidentally, BMW was one of the most vocal carmakers to criticize the aid package being offered to the Detroit 3. The German carmaker said the aid package would only serve to “distort competition” in the industry and that it should be offered to more companies.

Other countries around the world to start offering state aid to their local automotive industries include Australia, Canada, Spain, and the UK.

Meanwhile, BMW announced today that it would reduce the working hours for more than 26,000 German employees as part of efforts to slow production. The cuts will be limited to facilities in Dingolfing, Regensburg, Landshut and Berlin.

Source: http://www.motorauthority.com

Is this some kind od joke? Sales decrease 4% and you need a bailout. Sickening! Perhaps every company whose sales decreased a whopping 4% should get a bail out. This is beyond disgusting.

[02black330ci]

WTF is going on!!! We heard all kinds of good stuff, including the sales of M3's, though they aren't the bread and butter, but who the hell isn't hurting right now. Cut the extra fat and slim down through the tough times, don't ask for a lending hand when you know you truly don't need it.

[pmeloche]

Reeling from a decline of 4.3% in their sales.

[CMJETC]

lln does say that december sales were off 40.2%

http://www.leftlanenews.com/bmw-slow...g-workers.html

[e46e92love]

This is all due to going from NA to FI on the //Ms. Word got out, everyone knows BMW is selling out, so no one is buying BMWs anymore


Cheers,
e46e92

[Holden_Caulfield04]

Dang...uh...um...yeah...so my sales dropped 300% and I'm uh, needing some moneyz...





Pretty please?

[Saebb]

Interesting news... But if you look on reputable news paper sites like (in my case) spiegel-online, faz.net, financial times germany there are no such news. But super reliable Bild has it? Are you kidding me? Wait for serious news published in a reliable newspaper and then we can start complaining.

[maro bobby]

Does anyone knows how many of those F01 have been sold so far??
I find that very interesting information.

[Deda]

interesting info...

[fijigabe0]

when you read it carefully, they're not asking the German gov't for a loan, but "for a state guarantee to back up its borrowings."

what the "Big 3" asked for was a loan, because they didn't have enough cash on hand to support themselves, and were unable to secure a loan from any other lender (their credit is piss-poor).

sounds to me like BMW is being (a) cautious, in not having to beg for a bailout if things really go south, and (b) latching onto the bailout bandwagon, in order to get some share of the pie, before it's all gone!

[lyndon_h]

If BMW's sales are only down 4% then they are doing better than everyone else. Somehow, i think 4% is wrong.

[brokemywallet]

Originally Posted by lyndon_h

If BMW's sales are only down 4% then they are doing better than everyone else. Somehow, i think 4% is wrong.

yeah, if sales are only down 4% and now they are asking for gov't backed loan guarantee.....then they're doing something wrong!!!!

[phrozen06]

Isn't Europe where half of the 700 billion went to anyway?

[!Xoible]

the reason for them wanting the aid is not the drop in sales. it's the fact that no borrowers will give them money. the credit market is fucked up, and if they are not backed by government to guarantee the borrowing, then they cannot borrow and they cannot function. that would still be the case even if their sales went up 50%

[juicymoose]

Originally Posted by 02black330ci

WTF is going on!!! We heard all kinds of good stuff, including the sales of M3's, though they aren't the bread and butter, but who the hell isn't hurting right now. Cut the extra fat and slim down through the tough times, don't ask for a lending hand when you know you truly don't need it.

+1 Start with the over paid executives of the company.

[VGR00]

I think we need to put this in perspective. BMW are only asking for a "state guarantee to back up its borrowings". The Big 3 american car makers got a hand out. Two totally different things. I heard the 3 american car makers all arrived to the hand out meeting in private jets. Maybe they should sell the private jets and limit travel to domestic airlines traveling economy class.

[TheAcAvenger]

Originally Posted by vgr02

I think we need to put this in perspective. BMW are only asking for a "state guarantee to back up its borrowings". The Big 3 american car makers got a hand out. Two totally different things. I heard the 3 american car makers all arrived to the hand out meeting in private jets. Maybe they should sell the private jets and limit travel to domestic airlines traveling economy class.

They did sell them... after word got out that they'd done it, the heads of GM and Chrysler both gave up theirs. Ford? Not so much

[ihyln]

Originally Posted by Bimmer Al

Is this some kind od joke? Sales decrease 4% and you need a bailout. Sickening! Perhaps every company whose sales decreased a whopping 4% should get a bail out. This is beyond disgusting.

No it's not a joke sadly. Shareholders must be kept happy. There are some companies who will absorb the blow and keep employees but there are far more who will not.

[FStop7]

Originally Posted by ihyln

No it's not a joke sadly. Shareholders must be kept happy. There are some companies who will absorb the blow and keep employees but there are far more who will not.

that makes it worse, because isn't BMW privately owned? no shareholders.

insulting is what it is.

[Saebb]

Originally Posted by FStop7

that makes it worse, because isn't BMW privately owned? no shareholders.

insulting is what it is.

It is a stock-exchange listed AG (Aktiengesellschaft=corporatin) where most of the stocks are in property of family Quandt and their holdings. Which means on that anybody is able to buy stocks of BMW and those shareholders want to be satisfied (family Quandt for sure too).

Webasto e.g. is a privately owned corporation, where all stocks are in the hands of the Baier family. Those stocks are not traded on the stock exchange.

Well, I am still wondering because none of the other newspapers wrote anything about this.

Not correct, found one article on spiegel-online. Here is via babelfish translated version of the original german text. It states that only the financial part of BMW is asking for a loan.

BMW examines request for national endorsement

The German automobile industry hopes for national assistance for its financial sections: Now also BMW states interest in an endorsement. Thus that would not be Munich manufacturer first, that takes national warranties up.
ANZEIGE

Munich - a speaker of the enterprise confirmed a message the “picture” - newspaper that the admission of a state endorsement is examined. “It concerns however only the financial section”, stressed it opposite Spiegel online. For the automotive manufacture give it no such intentions. With the endorsement BMW can secure loans, in order to take up at the capital market new money for the refinancing of business.

Beside BMW numerous further enterprises of the automobile industry have interest in national warranties. “The German automobile industry has to examine the federation of the automobile industry (VDA) in the autumn 2008 assigned, to what extent national endorsements are possible and sense said devoted”, the BMW speaker Spiegel online. A goal of this common procedure is to be prevented it been, that the impression develops, an automaker has it “particularly necessarily”.

The federation of the automobile industry (VDA) sees a high need of national endorsements in the industry because of the difficult situation. Thus the assignment of bank credits can be facilitated to medium-size enterprises, said a VDA speaker the “picture” - newspaper. Before the VW group had already requested national assistance from the rescue package of the Federal Government in December for its internal bank.

Meanwhile the Italian car maker Fiat and the fastened US manufacturer Chrysler press reports negotiate according to over a strategic partnership. In the context of the alliance Fiat could take part in Chrysler, reports “Wall Street Journal” (WSJ) and the technical periodical “automotive news” on Monday agreeing with reference to insiders.

Assumption of the Chrysler majority?

Fiatcould be opened over co-operation the US market particularly for its small cars and cars in the medium range, it was said. The Italians look already since longer for a possibility for the economical expansion in the USA. Go it among other things around the Fiat 500 as well as around the traditional brand Alfa Romeo. It is considered that Fiat sells its cars over the Chrysler net, so “Wall Street Journal”. According to the report Fiat to center of the yearly up to 35 per cent of the Chrysler shares can take over and increase the portion in the medium term to 55 per cent.

Chrysler would use according to the plans in response the platforms and the technology of Fiats. With smaller cars the US car manufacturer has to offer hardly something. The Americans set long time particularly on large and little economical cars. The sales figures broke in with Chrysler last year around approximately 30 per cent.

The third biggest US car manufacturer behind GM and FordCharts showare at present only survivable owing to emergency credits of the US Government and look for urgently partners. Discussions with the Japanese manufacturer Nissan ran lastCharts show. Chrysler belonged to well 80 per cent the US financial investor Cerberus, the remaining scarcely 20 per cent holds still the German Daimler company. DaimlerCharts showwants to sell the portion as fast as possible, argues however with Cerberus over the price.

kaz/DPA AFX/DPA/Reuters