BMW GROUP RESPONDS TO ONGOING MARKET WEAKNESS

BMW GROUP RESPONDS TO ONGOING MARKET WEAKNESS
20/01/2009

* Volumes adjusted while securing jobs
* Selective short-time work at various sites to supplement existing measures

Conditions remain challenging on the international automotive markets. This trend also has an impact on the BMW Group. Thanks to a number of flexibility instruments the company has been able to adjust production early to weaker demand over the past few months, while the same time safeguarding jobs. Flex-time accounts have been reduced and leave taken for this purpose. Greater use has been made of sabbaticals and flexible deployment of employees within the BMW Group's production network. In addition, the company also made extensive cutbacks in the number of temporary workers, as earlier reported.

Management and employee representatives have now agreed to expand the initiatives for adjusting production volumes to include selective short-time work at specific plants. The goal is to achieve the necessary cost reductions while at the same time securing jobs. This measure is restricted to the Dingolfing, Regensburg, Landshut and Berlin facilities. In Berlin only brake disc production for automobiles will be affected and not motorcycle production. A total of approximately 26,000 employees will work short-time on certain days during the months of February and March (Dingolfing 15,000, Regensburg 8,000, Landshut 2,700, Berlin 190). There are no plans for short-time work at other German vehicle production plants such as Munich and Leipzig.

Even working short-time, the net income of employees with tariff contracts will amount to at least 93% of regular levels. In the event that the net compensation of such employees, inclusive of a short-time allowance, should fall below 93% of this level, the company will compensate employees for the difference.

"Safeguarding jobs - even in difficult times - by using a broad range of flexibility instruments has always been one of our key strengths," said Harald Krüger, Human Resources Director of BMW AG, on Tuesday in Munich. "Our wide variety of work schedule models helps us to achieve that. In addition to these measures we are also using a sophisticated combination of flex-time accounts, proactive leave planning and temporary short-time working at specific plants. I am confident we will emerge from the current difficult situation stronger than before - not least as a result of these measures. The highly-qualified employees we are able to retain today will give us a decisive competitive edge in the future."

Manfred Schoch, Chairman of the General Works Council of the BMW Group:
"Particularly in the difficult times we are currently experiencing, the agreement we have reached represents a good compromise, achieved through constructive cooperation between management and employee representatives. It allows the necessary volume adjustments to be made, while securing jobs for employees."