BMW brings its plan to achieve record output to court as labor representatives are blocking its move to hire more temporary employees. The best-selling luxury vehicle maker in the world has around 1,100 employees without longer-term contracts at its Leipzig facility in Germany. This number comprises nearly 30 percent of the automaker's total workers.
Labor representatives oppose a new round of temporary contracts, stating that the practice creates a two-tier system of employees. Frankfurt-based Bankhaus Metzler analyst Juergen Pieper commented that it is "clearly unusual" for BMW to have this type of argument in public. He added that the automaker wants to protect its well-paid key employees, and the last crisis showed the value of flexibility.
The conflict emphasizes German companies' drive to make their workforce more flexible in a nation where tough labor laws make firing and hiring prolonged procedures. The BMW Group is targeting sales of at least 2 million automobiles by 2020 from a record 1.67 million in 2011. BMW-branded sales hit the 1.38 million mark in 2011, placing it in front of Mercedes with 1.26 million and Audi with 1.3 million, as BMW seeks to keep its lead in worldwide premium sales.
Spokesperson Jochen Mueller for BMW in Leipzig stated that temporary workers are compensated with the same base salaries as long-term employees. This mix provides the automaker greater flexibility. Jochen Frey, another BMW spokesperson, disclosed that permanent staff got a bonus last year worth close to a month's salary, which the temporary employees did not get.
He further stated that the bonus depends on corporate profit. The Leipzig factory assembles the 1 series and X1 SUV. In 2010, the facility produced 186,800 units. BMW is investing 400 million euros or $529 million for the expansion of the facility. Mueller disclosed that the automaker intends to employ another 350 people permanently at the facility this year. Current temporary employees are also welcome to apply for the position.