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Thread: How will this effect the two wheeled versions?

  1. #1

    How will this effect the two wheeled versions?

    BMW to Reduce Workforce in EU6 Billion Savings Plan (Update1) (Bloomberg December 21) -- Bayerische Motoren Werke AG, the world's largest luxury carmaker, will scale back its workforce under a plan announced three months ago to boost profit with 6 billion euros ($8.6 billion) in spending cuts. The carmaker will eliminate jobs by not replacing people who leave and through contract agreements on work-time flexibility, said Mathias Schmidt, a spokesman at Munich-based BMW. Schmidt wouldn't confirm a report today in German magazine Der Spiegel's online edition that 8,000 positions will be cut next year. Chief Executive Officer Norbert Reithofer outlined the five- year savings program in September after BMW's profitability lost ground to Daimler AG's Mercedes-Benz Cars division. The automotive division aims by 2012 to raise its return on capital employed to 26 percent from 22 percent last year, and reach a return on sales of 8 percent to 10 percent, versus 5.9 percent.

  2. #2
    Still Wondering mika's Avatar
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    Aug 2004
    Fly Over Land
    I dont see a big change for the current model line up or the Berlin plant in general. The Berlin plant is seen as an assembly plant with most of its parts manufactured elsewhere. The second role for the plant has been to be a manufacturing plant of, if memory serves, disc brakes for the automotive division. Future models and production expansion may be another kettle of fish.

    There have been several stories in the motorcycling press that BMW has contracted with KYMCO, a Taiwanese manufacturer, to produce the engine for the new G 450. These engines will be shipped back to Germany for assembly into the final bike. I suspect that is the business model we will se more of. They gave done it in the past with the F650 but now they will go outside of Europe to gain the advantage that currency exchange rates offer and to keep prices of the finished bikes competitive.

    The issue for buyers is quality. If BMW properly designs and specs the engine, and KYMCO build to those designs and quality tolerances what is the big deal for the end user. The question some will have is can BMW control the quality? There are current issues with final drives and old issues with crankshaft/transmission alignment. These came out of their old system.

  3. #3
    Registered User lkchris's Avatar
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    Mar 2003
    Albuquerque, NM
    When there is an article about cutting the workforce, som combination of two things will happen

    1. Overhead positions will be eliminated or outsourced, i.e. accountants, etc.

    2. Manufacturing positions will be automated (robots) or outsourced.

    Nothing in this article says BMW intends to shrink and sell fewer vehicles.

    It's a positive article.
    Kent Christensen
    '12 R1200RT, '02 R1100S

  4. #4

    Its interesting what these gents think on the subject.

  5. #5
    Still Wondering mika's Avatar
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    Aug 2004
    Fly Over Land
    I agree with Kent overall for the customer I think the article is positive. For the BMW employee it depends on where you live within the organization.

    Here is a link to a thread, with the BMW PressClub press release on this topic, where the BMW corporate restructuring program was laid out.

    The Bloomberg article references a SpeigelONLINE article

    Speigel Online:

    Here is a link to the SpeigelONLINE article in question.

    For some perspective, here are two articles about the threats to jobs in Europe. The strength of the Euro has caused a huge shift in business fortunes within the European continent.

    The Strong Euro Is Destroying Jobs

    Euro Strength Knocks Airbus Off Course

    Airbus, by its structure and charter, is locked into European production. The results have been devastating to them.

    BMW is not locked into manufacturing in Europe. Within Europe the job implications with vary between plants and brands. Auto production has been shifted from a purely German based production model to one that builds products around the world in the markets that they are selling in.

    A couple things to keep in mind as you read various articles and reports about BMW.

    There is a good deal of seeming double speak about head counts. Overall the corporate head count is expected to remain constant. That does not mean it will remain constant within an individual plant. Yes some will shrink while others expand. In addition to these obvious points it is not clear how BMW is measuring head counts. Is it an absolute number of FTEs? Is it a number of FTEs in relation to a production/FTE goal?

    If you live in the Goodwood area of England put an application in at Rolls-Royce. The plant needs to double its staff to meet the production demands. Current Rolls-Royce production is sold out through 2009.

    If you are in India, China or Spartanburg the work prospects are strong.

    India and China are growth markets for BMW. New plants will produce completed models for those markets and ship parts to other plants for assembly.

    Spartanburg is expected to double its production to meet demands. This will be done in three ways, according to BMW. First the elasticity of production in the current plant will be taken up. Expansion of the production line will be highly automated with a strong use of technology. Finally there will be an increase in the number of employees at the plant.

    The comments about Benz envy driving this seem way off target to me.

    BMW tried expansion through acquisition in the past. A good deal of this current restructuring of the company is a result of the business invasion of England.

    Daimler has been implementing a strategy, similar to what BMW is now proposing, for many years now. The purchase of Chrysler aside, Daimler has been build truck plants around the world in the markets they are focusing on, instead of a build in EU and ship model. They have made their own mistakes. The key for BMW if they looked sideways is does this model work. With careful application the answer is yes the model will increase your return on investment.
    Last edited by M1ka; 12-31-2007 at 11:40 AM. Reason: Fix link

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