BMW cuts 26,000 workers, may apply for state aid
BMW builds terrific cars and crossovers, but even Germany's finest is struggling to tread water in a brutal automotive climate. Lagging demand has forced BMW to cut 26,000 workers for the months of February and March and BMW's factories in Dingolfing and Regensburg will be effected by the eliminations, which will cut 38,000 units. BMW is also reducing hours at Berlin and Landshut to better align output with demand. The reduced production hours and labor cuts won't result in any permanent layoffs, though a prolonged sales slump could lead management at the Bavarian Motor Werks to take more drastic action. The shrinking vehicle market is also hurting BMW's stock price, which is down 49% over the past 12 months.
The world's largest luxury automaker may also be looking for loan guarantees from the German government. Reuters is reporting that BMW is looking to follow Volkswagen in securing its debt to help weather the auto sales tsunami. Volkswagen, which is reducing hours for 86,000 of its workers, requested financial support in December. Something tells us the German government won't ask BMW brass to take any tongue lashings in order to be considered for loans. | 