BMW workers facing pay cuts

News | March 20th, 2009 by 2
norbert-reithofer-bmw

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.

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 ]

  • Gord

    When you say overall package you are including bonuses right ?

  • M

    I think that BMW is becoming one of the badly managed super companies…they follow the steps of GM. they ignore customer feedback, are building a reputation of being ignorant with very rich blue blood, even their sales force are known to be a bunch of snabs with the attitude of our way or the highway.
    their cars’ reliability is always slipping, ownership cost climbs higher every year.
    the brand is gaining the image of being for the rich and stupid not for the middle class practical driver who enjoys driving to work and their children’s sports.
    BMW needs to go back to their customers while they can and ask…what do we need to do to get you in a BMW today?
    they need to tell their sales managers and reps. to treat customers with respect, without them customers, cars will only ship to dealership lots and collect dust there.
    they need to realistic in equipping their cars with useful technologies, not show off ones. they need to focus on the purpose of a BMW, not theimage…and they need to be realistic in their prices to attract more consumers. the rich get bored fast, they like to change and they need to be different from the rest, middle class tend to be more brand loyal, appreciate quality and pay attention to ownership cost.
    may be if they do that, they can secure a safe corner in this market and never have to worry about what tomorrow brings…just a thought!!!

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