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    Posted: 15-October-2008 at 22:49

BMW temporarily halts some output amid market slump


MUNICH, Oct 10 (Reuters) - BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz) will temporarily halt output at some German plants given the sharp drop in demand in key car markets, the automaker said on Friday, joining the ranks of rivals feeling the pinch.

Its plant in the eastern German city of Leipzig will close for a week at the end of this month, while its factory in Regensburg will shut during the Bavarian autumn holidays from Nov. 3 to 7, a spokesman said.

BMW's main plant in Munich will also shut during the Bavarian holidays, one source close to the matter said.

The world's biggest premium carmaker had said in August it planned to cut production by up to 25,000 vehicles this year, or nearly 2 percent of last year's output.

Staff can absorb the measure by drawing down work accounts in which they store up overtime worked so far. Workers can book up to 300 hours of overtime worked or extra time owed, or around 40 days of production, the spokesman said. (Reporting by Alexander Huebner und Irene Preisinger; Editing by Quentin Bryar) (michael.shields@thomsonreuters.com, Reuters Messaging: michael.shields.reuters.com@reuters.net; +49 69 7565 1266))

© Thomson Reuters 2008 All rights reserved

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Points: 15508 		Post Options Post Options   Thanks (0) Thanks(0)   Quote kbannon Quote  Post ReplyReply Direct Link To This Post Posted: 15-October-2008 at 22:53

BMW considers cutting worker bonuses

Automaker hopes move will parry rising material costs


BMW is looking at potentially trimming worker bonuses as a way to cut costs, but such a move would be confined to Germany and would not affect employees in Greer, officials said.

BMW has been hit hard by rising raw materials prices, exchange-rate losses and recently by the turmoil in the auto industry.

The company earlier announced it plans to temporarily halt production at some of its plants in Germany in response to the sharp drop in demand in key auto markets, such as the United States.

Plans are to close the Leipzig plant for a week at the end of October, according to Automotive News Europe, a trade publication.

Regensburg and the main plant in Munich also will shut down during the Bavarian autumn holidays Nov. 3-7.

In August, the company announced it planned to cut production by up to 25,000 vehicles a year -- nearly 2 percent of last year's production.

In the latest move, "wages are not an issue for any discussion," said Michael Rebstock, a BMW spokesman from Germany. "We are talking about some payments above our general pay scale, like bonuses depending on our business results."

He added that the consideration "affects only employees of BMW AG, which are more or less all BMW employees in Germany." The Greer plant "is not part of the current discussion."

Automotive News Europe reported that talks about the potential financial cuts have begun between BMW and employee representatives, but no agreement has been reached.

Currently BMW AG employees receive 15.5 months of salary for a year's work. The negotiated pay scale calls for 13.2 months' pay, the magazine reported.

The automaker also wants to cut 8,100 jobs, primarily in Germany, by the end of the year. Temporary workers are expected to account for 5,000 of the total positions eliminated.

[source]




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BMW to lay off up to 733 temporary workers

Quote As many as 733 temporary workers at BMW’s Greer plant will be laid off in December as the German automaker begins to feel the effects of the world financial crisis.

Job reductions at the plant that is a powerful economic engine sustaining thousands of jobs in the Upstate and across South Carolina are limited for now to temporary workers the plant employs through the MAU Inc. staffing company.

The plant has a permanent work force of about 5,400 BMW-hired workers, in addition to hundreds of contract and contingent employees.

Those jobs have a potent multiplier effect. An estimated Ť 23,000 jobs have been created through a network of companies in the Upstate that supply the automotive parts and services. How this reduction could play out through that network was unclear late Thursday.

The company said, however, it remains focused on its planned expansion of the plant, which now makes the X3, X5 and X6 models. It plans to launch a diesel-power X5 this year and a hybrid X6 next year.

Bobby Hitt, a spokesman for BMW, said the company “is not unlike any other manufacturing facility in that it is not immune to uncertain circumstances that we are all witnessing in the economy and, more specifically, the automotive industry.”

The layoffs come after a drop in BMW’s U.S. sales in September. Sales of BMW-branded vehicles plunged nearly 30 percent, compared to the same month last year, the company said. Counting Mini-brand vehicles, the sales drop was 25.8 percent.

For the first nine months of the year, sales of both brands were down 4.8 percent, to 236,327 units, compared to the same period in 2007.

Other automakers reported even worse results for last month.

Currently, BMW is exporting about 72 percent of its production, a sign that U.S. sales are soft, Hitt said. But production at the plant is continuing to be relatively strong.

The last day of 2008 production will be Dec. 19, he said. BMW usually closes the plant shortly before Christmas through the end of the year.

Problems resulting from the softening of the automotive industry are not unique to the Greer plant, he said. Several plants in Germany are idling their lines for a week or so in the next few weeks.

“While BMW must manage based on today’s market conditions, we remain focused on our future expansion efforts to produce the next-generation BMW X3 in 2010 along with the X5 and X6 models,” Hitt said.

Despite the worsening economic conditions, the company is in the midst of a $750 million expansion of its Greer facility, which includes a bigger paint shop and a second assembly facility that would increase production capacity from 160,000 vehicles a year to 240,000.

The layoffs of contract workers at BMW are the latest sign of pain in the U.S. auto industry, where employment has fallen 14 percent since last year, said Raymond Sauer, an economics professor at Clemson University. The industry shed 52,000 jobs in the third quarter.

Sauer blamed the credit crisis plus a downturn that he believes is now a full-blown recession.

“We’re getting impacted here on Main Street by the developments that have taken place on Wall Street,” he said.

Curtis Simon, also an economics professor at Clemson, said South Carolina is more sensitive to recession than other states because of its greater reliance on manufacturing.

In manufacturing, Simon said, the work force is more of a “variable input” than it is in other economic sectors, such as services.

“When the assembly line shuts down, you send the workers home,” he said.

Notification of the layoffs has been sent to the workers who could be affected, said Randy Hatcher, president of MAU, a Georgia-based staffing agency.

Most of those affected will be production workers, he said, adding at least 500 workers would be laid off. MAU also provides logistics and administrative workers for the plant.

A report filed by the company said the number could be 733, according to Kara Borie, spokeswoman for the state Department of Commerce.

“We were informed by BMW there will be changes for the last quarter of 2008 and early 2009,” Hatcher said, citing the completion of the production run of the Z4 roadster and coupe at the plant and the overall problems of the automotive industry.

“The BMW contingent work-force strategy was designed to manage our labor requirements through production fluctuations, such as the build-out of the Z4 this fall,” Hitt said. “Given the challenging economic conditions, managing contingent staffing is a vital business requirement. Decisions related to our workforce requirements will be driven by the market impact to our production volume.”

Hatcher said, “We know we will be laying off some people,” but the numbers won’t be final until shortly before the layoffs.

“Any time anyone loses their job, it’s an unfortunate situation,” Borie said. But “it’s important to look at the total impact of BMW. They continue to have a positive impact on the state,” she said, citing as an example the approximately 600 construction workers on the $750 million expansion project now under way at the plant.

In addition, the company has generated total economic output of more than $8.8 billion over the life of the plant from its inception in the early 1990s. A report released recently by the University of South Carolina’s Moore School of Business also attributed the support of 23,050 jobs to BMW, its suppliers and support businesses. That does not include contract employees.

“Those are strong benefits to capital investment,” Borie said, adding none of the positions being eliminated are connected to any state incentives to BMW.

“BMW is a world-class company. We feel confident and hopeful that those jobs will come back,” she said.

[source]
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Points: 6484 		Post Options Post Options   Thanks (0) Thanks(0)   Quote Peter Fenwick Quote  Post ReplyReply Direct Link To This Post Posted: 21-October-2008 at 11:35

Hard times for car makers.

I wonder if any will go under in the next year? 
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Isn't Gm close to the edge?
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Originally posted by kbannon kbannon wrote:

Isn't Gm close to the edge?

Aren't Ford in the same boat too?
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Originally posted by Andrew Rolland Andrew Rolland wrote:

Originally posted by kbannon kbannon wrote:

Isn't Gm close to the edge?

Aren't Ford in the same boat too?

The BIG 3 in the US are in dire straits, they concentrated too much on SUV's and when the fuel prices went up psople stopped buying them. Also they have the rep of being POS. GM and Chrysler are getting their game together and the quality is getting up there. Ford seemingly are going to introduce euro models to the US.
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Quote German carmakers make fresh move to cut output

* Reuters, Tuesday November 25 2008

* Porsche schedules 8 days of production stops at main plant
* Volkswagen may stop production in Wolfsburg for 3 weeks
* Audi says production halts are a precaution
* BMW says will cut further 400 temporary jobs in Leipzig
* Porsche shares down 8.8 percent, VW down 17.7 percent
(Adds Audi production stops, BMW temporary job cuts)
FRANKFURT, Nov 25 (Reuters) - German carmakers made another move to cut output levels towards the end of the year to offset slumping demand as the global economic crisis prompts consumers and companies to closely monitor their finances.
Sports car maker Porsche halted production at its headquarters in the southern German town of Zuffenhausen, for one day on Nov. 21, and planned to stop assembly for another seven days until end-January.
The company said on Tuesday it no longer saw its financial year unit sales to end-July reaching the previous same period's level of 98,652 vehicles.
The German car industry accounts for about one in eight jobs in the country, according to German auto industry association VDA. The downturn in car sales has also started having an impact on other sectors such as chemicals and electronics.
Volkswagen, in which Porsche holds 42.6 percent of the shares, earlier said it was also considering suspending production, eyeing a three-week halt at its main Wolfsburg plant from Dec. 18 until Jan. 11.
VW luxury vehicle unit Audi followed suit. A spokesman for the company said the carmaker's orders have been stable, and the production halts were preventative measures.
Domestic peer BMW had suspended production at its factory in Leipzig for a week last month and is currently operating only one shift a day there.
The company now plans to cut 400 further temporary workers in Leipzig, in addition to previously announced plans to cut 8,100 full-time jobs around the world, a spokesman for the company told Reuters on Tuesday.
At 1559 GMT, shares in Porsche were down 8.8 percent to 51.07 euros. Volkswagen had slipped 17.7 percent to 271.38 euros and BMW was down 2.4 percent to 19.245 euros. The DJ Stoxx European autos index was down 6.3 percent. (Reporting by Maria Sheahan, Jan Schwartz, Irene Preisinger; Editing by Andrew Macdonald)

[guardian.co.uk]
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Quote Car makers that had seemed in a strong position to weather the global economic storm have publicly admitted a 'crisis' as sales continue to slow down.

BMW's boss Norbert Reithofer yesterday described the situation to Germany's Spiegel magazine as "the worst crisis BMW has faced in its history".

Despite the slow sales, it is the German giant's reliance on leasing that has put it in a very vulnerable position.

Meanwhile Daimler boss Deiter Zetsche assessed the current conditions as "the worst crisis since World War II".

Martin Winterkorn, boss of Volkswagen, told reporters: "We have never before seen this kind of crisis" adding that "difficult cuts" maybe unavoidable.

But it's not just the German's who are talking openly about serious problems.

Previously stable Japanese giant manufacturers like Honda and Toyota are also publicly airing grave concerns.

Toyota's vice president Mitsuo Kinosh*ta described the situations as "an emergency of a magnitude we have never seen before".

Honda has also admitted that it will be "very difficult" to meets its full-year profit forecast and is scaling back production by some 40,000 units in Japan.

Industry experts say the most flexible car makers, which can adjust quickly to falling demand, will be best placed in the months to come.

[autocar.co.uk]



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