Cutting BMW
December 21, 2007
"Several thousand jobs" will disappear in the next few months, said a spokesman from the Munich-based auto manufacturer on Friday.
No specific numbers were given by the company, but a report by Spiegel Online estimated the anticipated layoffs at around 8,000. An industrial source confirmed the figure.
Cuts are to focus on blue-collar positions within Germany and will specifically involve not renewing part-time contracts, said the spokesman. Contracted, non-union workers would thus be targeted.
A BMW factory at Leipzig in eastern Germany makes extensive use of such casual staff.
The spokesman said some of BMW's 107,700 own employees would also be retired or not replaced, but layoffs in this category were not contemplated.
In Frankfurt trading, BMW stock bolted higher on the news, trading at 42.16 euros ($60.68) on Friday afternoon, 4.3 percent higher than its Thursday close.
Necessary cuts
Despite strong sales, particularly of its luxury models, BMW chief Norbert Reithofer told employees that the cuts were necessary due to a constant decline in the company's earning ratio.
Reithofer has said he would like to whittle six billion euros off of future budgets.
Although BMW is expected to report record sales this year, exceeding the level of 3.75 billion euros, the company's profit margin ranks behind other premium car manufacturers.
BMW's main labor union, IG Metall, said on Friday that it believed the cuts had to do with a lull in production ahead of releasing a new 7-series model.