BMW workers facing pay cuts

News | March 20th, 2009 by 2
norbert reithofer bmw BMW workers facing pay cuts

The recent announcement on the net profit in 2008 being 90 percent lower than the year before, could have not had any impact on BMW’s …

The recent announcement on the net profit in 2008 being 90 percent lower than the year before, could have not had any impact on BMW’s workforce.

In a recent statement, BMW CEO, Dr. Norbert Reithofer warns his employees of 10% future pay cuts. This includes the 100,000 employees along with board members as well, who will see their bonuses slashed by 40 percent. Senior executives will also take a 30 percent reduction in their bonuses.

norbert reithofer bmw 498x343 BMW workers facing pay cuts

Herr Reithofer will be paid his 600,000 euro annual salary, but his overall package will drop by 1.65 million euro to 2.3 million euro.

Last year, BMW has already eliminated 7,500 jobs worldwide, including MINI layoffs at the Cowley Plant.

The savings expected from this harsh measures is around 500 million euros ($680 million). Shareholders don’t have reasons to be happy as well, seeing the company’s dividends cut from 1.06 euro to .30 cents.

Obviously this is a measure implemented across board and BMW sees that everyone involved with the company should tighten the belt.

Herr Reithofer expect the auto industry to recover in 2010 with ’09 being a transition year.

“2009 will be a transition year. This is why we have set clear priorities: liquidity, free cash-flow and working capital, fixed costs, investments. In other words, we are tightening our belts – just like any good businessman.”

As a final thought, BMW’s CEO denied any future ties with Daimler and PSA Peugeot Citroen.

[Source: The Independent via Autoblog ]

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