BMW: Volumes adjusted while securing jobs

BMW has extensively cut the number of temporary workers, but managed to safeguard many jobs by having its employees work less hours on certain days.

The upcoming months are critical for BMW and shortening the work time for 26,000 employees, will allow BMW to emerge from current difficult situation. The 26,000 employees are part of the German plants in Dingolfing (15,000), Regensburg 8(,000), Landshut (2,700), Berlin (190).

Harald Krüger, Human Resources Director of BMW AG, is very optimistic about the outcome: “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.”

These news come together with the one posted today by Reuters, in which they talk about the rumor of BMW looking into state aid, not necessarily breaking news since we reported that months ago, but certainly something that could go hand in hand with the actions taken earlier today by BMW.

There is no doubt that most of the carmakers are hurting, and BMW is not the exception. With the economic crisis reaching new levels, I expect the first half of 2009 to be one of the worst time periods in the past 10-15 years, for all the automobile manufacturers.

BMW is betting on a new set of vehicles and focusing more on fuel efficient and clean technologies. Many unique cars will be introduced this year and the following one, with the primarily scope of succeeding in new markets and creating new automobile segments.

Will they survive this crisis? Without a doubt, but it will require sacrifices from all of its people.

Press Release

Munich. 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.”

5 Responses to “BMW: Volumes adjusted while securing jobs”

roffle waffle says:

January 20, 2009 at 7:06 pm

I think they’re being overly-optimistic about sales gaining in the third quarter, I’d say about another full year. Before new automotive sales pick up people will first need job security

Sam says:

January 20, 2009 at 8:04 pm

Funny how when companies cut workers they act as if those workers were doing nothing and their loss won’t affect product quality or service. It will.

If temp workers are being cut it means either the management failed or business is just going down in general. In either case, management salaries should suffer equally with the overall reduction in employment. So if the temp worker reduction is 5% of the entire workforce, management compensation should be reduced 5%, this might offset the reduction in quality or service caused by the temp layoffs.

Artmic says:

January 20, 2009 at 8:18 pm

At best the economy will pick up in 5 years, at worst, it will never pickup in the USA

Tom says:

January 21, 2009 at 12:48 am

@roffle waffle: Keep in mind, once you hit bottom, you can only go up.

Bike trader says:

January 21, 2009 at 2:37 am

BMW seems to be a leading one in innnovations again after hydrogen car, connected drive, active hybrid…