BMW firing 8.000 workers
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BMW firing 8.000 workers
It’s two-thirds as many workers as Chrysler just cut. BMW is eliminating 8,000 jobs, most in Germany and most non-union, all in an effort to shore up its earnings report.
What does it mean?
BMW’s sales have risen as others have fallen. Indeed, the BMW sales charts are the envy of the industry. But the more it sells, the less money it makes. It says it’s trying to change that.
But there may be more to it than the company is admitting. Meeting both new European and American emissions and fuel economy standards is going to tax BMW’s coffers. It makes its money selling cars that will be the most affected by the new regulations. It’s going to need all the money it can get to pay for the development costs, and there’s no time to lose. The European standards are effective in 2012.
Unlike the desperation move at Chrysler, the BMW decision is not a sign that the company is in trouble. It’s a sign that the company is being ultra realistic about exactly what it has to do in order to remain competitive in the future, and isn’t afraid to do what it takes to achieve its goals.
The move, however, seems certain to add to speculation that BMW will sooner or later seek further cooperation and/or consolidation with Daimler. Both companies are believed to need outside help to finance the costs of meeting the new standards, developing new models, and of competitive expansion into emerging markets. Both are thought to be able to achieve significant economies of scale by cooperating with the other because their products and product lines are so similar.
BMW, however, seems to be moving more aggressively than Daimler, at least on the issue of costs. Daimler, of course, has had Chrysler on which to blame past profit problems. Divesting Chrysler has increased earnings dramatically. There is, however, reason to question whether Daimler has bigger problems than it has been publicly prepared to acknowledge. After all, the same folks that ran Chrysler into the ground are still running the show at Daimler.
If so, the BMW move may also be seen as a bit of pre-positioning, so that if and when the need and or opportunity to reach an equal alliance with Daimler should eventuate, it will be BMW that is the one that is more equal than the other.
What does it mean?
BMW’s sales have risen as others have fallen. Indeed, the BMW sales charts are the envy of the industry. But the more it sells, the less money it makes. It says it’s trying to change that.
But there may be more to it than the company is admitting. Meeting both new European and American emissions and fuel economy standards is going to tax BMW’s coffers. It makes its money selling cars that will be the most affected by the new regulations. It’s going to need all the money it can get to pay for the development costs, and there’s no time to lose. The European standards are effective in 2012.
Unlike the desperation move at Chrysler, the BMW decision is not a sign that the company is in trouble. It’s a sign that the company is being ultra realistic about exactly what it has to do in order to remain competitive in the future, and isn’t afraid to do what it takes to achieve its goals.
The move, however, seems certain to add to speculation that BMW will sooner or later seek further cooperation and/or consolidation with Daimler. Both companies are believed to need outside help to finance the costs of meeting the new standards, developing new models, and of competitive expansion into emerging markets. Both are thought to be able to achieve significant economies of scale by cooperating with the other because their products and product lines are so similar.
BMW, however, seems to be moving more aggressively than Daimler, at least on the issue of costs. Daimler, of course, has had Chrysler on which to blame past profit problems. Divesting Chrysler has increased earnings dramatically. There is, however, reason to question whether Daimler has bigger problems than it has been publicly prepared to acknowledge. After all, the same folks that ran Chrysler into the ground are still running the show at Daimler.
If so, the BMW move may also be seen as a bit of pre-positioning, so that if and when the need and or opportunity to reach an equal alliance with Daimler should eventuate, it will be BMW that is the one that is more equal than the other.
yea and in another article they said they want to start making their own parts because they thought suppliers were "overcharging" them, and now 8000 are getting the boot, good one
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The firing of German workers is no doubt because they're just paid too much for their productivity and insane benefits. This could actually be a good thing for BMW's U.S. facility which now EXPORTS a lot of product from the U.S. to elsewhere. 
Lexus Fanatic
Joined: May 2007
Posts: 11,030
Likes: 7
From: Windward, Oahu
OH YEA!!! Lotta bmws sold in the usa are MADE IN THE USA... pssh all this time ive been bashing the wrong ppl... BMW has reliability problems because its made here from the loving hands of the UAW... now it all makes sense 
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BMW needs to stop chasing sales and become more efficient. Firing workers is always the EASY way to cut costs.
1. They have the HIGHEST incentives of any brand (not just in America but Germany as well). How about lowering the price and then forecasting correctly what your TRUE profit really is.
2. Stop having lease deals that embarrass most anyone else around. You can lease a BMW the next class up compared to the competition. You are fooling yourself into thinking you are selling a car, you are not, you are lending it.
3. While its cool to offer 500 different flavors of the same car, its not profitable with lower selling options. They are going to have to learn to package more efficiently.
4. Look at merging with someone with somewhat similar ideas, or someone who will help supply some $$$$ and leave them the hell alone.
I think if BMW became part of the VW group, controlled by Porsche, they would take it to another level.
On the other side, I am sad to read this b/c BMW is an independent company and this is the cost they pay for this. While everyone else is sharing items/platforms/engines etc, BMW for the most part only shares with itself.
I hope they find the answer.
1. They have the HIGHEST incentives of any brand (not just in America but Germany as well). How about lowering the price and then forecasting correctly what your TRUE profit really is.
2. Stop having lease deals that embarrass most anyone else around. You can lease a BMW the next class up compared to the competition. You are fooling yourself into thinking you are selling a car, you are not, you are lending it.
3. While its cool to offer 500 different flavors of the same car, its not profitable with lower selling options. They are going to have to learn to package more efficiently.
4. Look at merging with someone with somewhat similar ideas, or someone who will help supply some $$$$ and leave them the hell alone.
I think if BMW became part of the VW group, controlled by Porsche, they would take it to another level.
On the other side, I am sad to read this b/c BMW is an independent company and this is the cost they pay for this. While everyone else is sharing items/platforms/engines etc, BMW for the most part only shares with itself.
I hope they find the answer.
Lexus Fanatic
Joined: Oct 2003
Posts: 94,602
Likes: 271
From: Virginia/D.C. suburbs
1. They have the HIGHEST incentives of any brand (not just in America but Germany as well). How about lowering the price and then forecasting correctly what your TRUE profit really is.
2. Stop having lease deals that embarrass most anyone else around. You can lease a BMW the next class up compared to the competition. You are fooling yourself into thinking you are selling a car, you are not, you are lending it.
3. While its cool to offer 500 different flavors of the same car, its not profitable with lower selling options. They are going to have to learn to package more efficiently.
4. Look at merging with someone with somewhat similar ideas, or someone who will help supply some $$$$ and leave them the hell alone.
I think if BMW became part of the VW group, controlled by Porsche, they would take it to another level.
2. Stop having lease deals that embarrass most anyone else around. You can lease a BMW the next class up compared to the competition. You are fooling yourself into thinking you are selling a car, you are not, you are lending it.
3. While its cool to offer 500 different flavors of the same car, its not profitable with lower selling options. They are going to have to learn to package more efficiently.
4. Look at merging with someone with somewhat similar ideas, or someone who will help supply some $$$$ and leave them the hell alone.
I think if BMW became part of the VW group, controlled by Porsche, they would take it to another level.
On the other side, I am sad to read this b/c BMW is an independent company and this is the cost they pay for this. While everyone else is sharing items/platforms/engines etc, BMW for the most part only shares with itself.
I hope they find the answer.
For instance, one of the things eating up costs today is the too-complex electronics of today's BMWs. Going back to the pre-I-Drive cars with conventional controls would probably save at least some money. And the M5 doesn't need the expensive-to-produce V10 it has now......for years, it made do perfectly well with a less-expensive V8.
Last edited by mmarshall; Dec 26, 2007 at 08:35 PM.
Lexus Fanatic
Joined: Feb 2005
Posts: 12,269
Likes: 296
From: ------
Reliability problems in cars generally have absolutely nothing to do with the auto workers putting them together. Honda Accords and Toyota Camrys have been made in the US by US workers for a long time and they have been 2 of the most reliable well made cars you could by. A cars reliablility has to do with the way it is designed, engineered, and the quality of parts it uses. BMW cooling, electronics, as well as other areas are generally very bad because they are poorly designed and engineered by upper level people and have bad parts suppliers. It has nothing to do with the people assembling a poorly engineered car. Most BMWs were built in Germany and they had plenty of problems, not just the more recent ones built in America. Even many cars made in Japan were plagued with reliability problems. Look at the turbo RX7 and its problems with the rotary engine rarely lasting over 60K miles, the original mazda 929s were built in Japan by Japanese workers and were known for being lemons, the Mitsubishi 3000GT was built in Japan and had a poor reputation for it being unrealiable. Blame the designers, engineers, bean counters, and parts/electronics suppliers for cars being unrealiable not the people putting together a poorly designed/engineered car.