BMW cutting jobs for efficiency

Alisa Roth Dec 26, 2007


Doug Krizner: Yesterday we told you about Toyota, on track to becoming the world’s biggest car maker. The company raised sales forecasts for 2008. Toyota’s focused on Russia and China to make up for declining sales in the U.S. and Europe.
These certainly are challenging times for the automakers. And as Alisa Roth reports, BMW is the latest to feel squeezed.

Alisa Roth: Luxury car maker BMW says it’s going to cut thousands of jobs next year, mostly in Germany. The company’s not saying exactly how many, though a German magazine puts the number at 8,000.

Kevin Tynan follows the auto industry for Argus Research. He says BMW isn’t running into the same kind of problems that are dogging Detroit.

Kevin Tynan: What you have is BMW making sales gains against its German rivals, Mercedes, Volkswagen, but those increased sales come at lower margins.

BMW’s been selling more cars. Now, it wants to do that more efficiently. The company’s sales margins are around 5 percent, whereas Mercedes are closer to 10. BMW’s cutting costs by getting rid of workers and trying to figure out ways to keep up production.

There’s been a lot of discussion in Germany lately about whether companies should favor shareholders over workers. BMW’s announcement may restart the debate, even though it’s mostly cutting temporary employees.

In New York, I’m Alisa Roth for Marketplace.

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