BMW wants to cut German labor cost by EUR100 million annually from 2015

Article by Christian A., on June 4, 2014

BMW plans to reduce its labor costs in Germany by EUR100 million ($136 million) annually from 2015 onwards, according to Muenchner Merkur, citing workers' representatives. The paper said that savings would come from decisions over which sites in Bavaria would be economically appealing enough to build new BMW models in the future.

BMW is planning a double-digit million euro investment and new model launches to stave off challenges from premium rivals Audi and Mercedes-Benz. BMW is also targeting post record sales this year.

In March, BMW disclosed a $1-billion investment to expand its Spartanburg plant in South Carolina, which includes boosting the US site’s workforce by about 800 people to 8,800.

The investment would make the site as BMW largest production facility by 2016. A BMW spokesman, while declining to comment on the savings target, remarked there were ongoing discussions with the workers' council over where to produce which car, adding that the management will evaluate the competitiveness and costs of different facilities.

Based in Munich, Germany, BMW AG is the parent company of the BMW Group. BMW Group is engaged in the development, manufacture and sale of engines as well as all vehicles equipped with engines. The BMW Group is subdivided into several segments: Automotive, Motorcycles, Financial Services and Other Entities.

BMW AG traces its roots to 1916 as Bayerische Flugzeugwerke AG (BFW), which was founded in 1916. It became Bayerische Motoren Werke GmbH (BMW GmbH) in 1917 and BMW AG in 1918. With BMW, MINI and Rolls-Royce in its fold, the BMW Group owns three of the strongest premium brands in the automotive industry. At the end of the 2013 financial year, the BMW Group had a global workforce of 110,351 employees.

Operating on a global scale, the BMW Group is represented in more than 140 countries. Its research and innovation network is spread over 12 locations in five countries. As of December 31, 2013 the Group’s production network comprised a total of 28 locations in 13 countries.

In 2013, the BMW Group delivered more than 1.96 million BMW, MINI and Rolls-Royce cars to customers, surpassing the record in 2012 by 6.4 percent. Individually, BMW, MINI and Rolls-Royce also posted record sales. More than 1.65 million BMW, over 305,000 MINI and exactly 3,630 Rolls-Royce vehicles were sold in the period.

Thanks to the sharp increase in the number of vehicles sold, the BMW Group recorded its best pre-tax profit to date. Group profit before tax jumped by 1.4 percent to EUR7.91 billion (EUR 7.80 billion in 2012).

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