• Mar 10, 2008

Blame the plunging greenback. Less than a week after BMW announced the expansion of their U.S. Spartanburg plant, we are getting news from Germany that the weak dollar is making it increasingly difficult for the German automaker to keep production on their soil and that layoffs are imminent. Ernst Baumann, BMW's head of personnel, said 5,600 jobs in Germany will be cut by the end of the year. When you add that to the 2,500 positions already eliminated, the total represents about 7.6-percent of BMW's workforce.

While the layoffs are bad news for German factory workers, the flip side of the coin may benefit their American counterparts. With the value of the Euro sitting at more than $1.50 at current exchange rates, European automakers are finding manufacturing on U.S. soil more attractive (read that "cost effective") than ever. BMW manufactured about 155,000 vehicle on U.S. soil last year. By 2012, that number is planned to approach 240,000 cars. BMW sales worldwide reached 198,628 in January and February, up from 191,357 the same period last year. With the new BMW 1 Series and BMW X6 models hitting showrooms in 2008, BMW is forecasting yet another year of increased sales.

[Source: Detroit News]



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  • 28 Comments
      • 6 Years Ago
      This is the benefit when our currency goes down relative to theirs. Cheaper costs shift production from them to us. Then, when we become more expensive again in the future, it will shift back or to somewhere else.
      • 6 Years Ago
      Too bad they have cut back on 1 series production for the US.
      • 6 Years Ago
      198,628 sales WORLDWIDE???????
        • 6 Years Ago
        I think those numbers are off by about a million units.
        • 6 Years Ago
        Fixed. Thanks!
        • 6 Years Ago
        "Last year, BMW sales worldwide reached 198,628, up from 191,357 the previous year."

        Something got lost in the translation from "198,628 cars worldwide in January and February, up from 191,357 for the same period last year."

      • 6 Years Ago
      I think it is kind of short-sighted and knee-jerk of all these car companies to think that the current state of the US dollar is a long-term thing.

      Once the idiot leaves the whitehouse, and this war ends (we're no longer pissing money away) the national debt will stabilize and eventually start declining (again).

      I remember in the recession of the Bush Sr. administration, it took about three years for the fallout to hit Japan. By moving these plants here and putting so many people out of work in their home countries, it won't take as long this time.

      A couple of other points:

      1). The U.S.economy as slow as it is, the returns for their "investments" may be a long time coming.

      20. With the domestics are raising their game, the pickings will not be as easy as it used to be.
        • 6 Years Ago
        I think it is kind of short-sighted and knee-jerk of you to think that when our president leaves office, the war will end, and the national debt will stabilize.

        The domestics aren't raising their game that much, and people still want BMW > Big 3. As long as someone has the dockets in their bank account, they'll continue to pick BMW > Big 3. Their sales will continue to go up, domestic will continue to go down. Mark my words and deal with it.
        • 6 Years Ago
        No one is going to be ending this war (and by that I mean stop spending money on Iraq) any time soon for fear of befalling Nixon's fate, not to mention the humanitarian backlash.

        As for GM and Ford improving, I'll believe it when they start turning profits on a regular basis while still keeping engineering jobs in their native country. You know, something BMW has been able to do for quite some time.
        • 6 Years Ago
        Well I'm sure the smart economists at BMW know what they're doing. The euro has always been stronger and stronger against the dollar these past years even when the US economy was doing good anyways.

        But yeah the dollar won't keep sinking - at some point as some commenters had mentioned the US just becomes cheaper and everything will bounce back to equillibrium...

      • 6 Years Ago
      HEHE U.S. taking other countries jobs.
      • 6 Years Ago
      I also think many of you are forgetting that the U.S. is largest market for BMWs in the world. This move makes a lot of sense.

      But don't worry, I'm sure there's a larger conspiracy at work here for those of you not wanting to see the silver lining in this news.
      • 6 Years Ago
      Manufacturing coming back to the U.S. Now that doesn't happen every day. Yay BMW.
        • 6 Years Ago
        I was thinking the same thing. Yay BMW! lol..
        • 6 Years Ago
        Some may consider this the positive side of the plunging dollar. How embarrassing this must be for some. We were always considered the most prosperous country in the world. Now countries are out sourcing to us, because of cheap labor. Maybe the middle class will survive after all. After all, any job that puts food on the table and keeps a roof over your head must be good.
      • 6 Years Ago
      That's good maybe the price will go down.

      http://www.tkqlhce.com/click-2438293-10364260
      • 6 Years Ago
      So, let me get this straight. People are upset a foreign company is investing more in America and creating jobs here in times of economic need?

      What it takes to satisfy some people here is absurd!
        • 6 Years Ago
        It's a offense to national pride.

        While it sucks to lose jobs, at least when it happens you know it's because those jobs are going somewhere else, where wages are comparatively meagre and regulation is lax. When you're the destination, it's galling to know that you've dropped to the level of entities you used to outsource to.
      Sarath Raja
      • 2 Years Ago
      sir i am sarathraja from india..i am completded in i.t.i trade in diesel-mechanic..working in 2 year in workshop..my dream job work to bmw car comoany...pls any mechanic job in pls contact; cell:+919865642819 email;sarathraja5214@gmail.com
      • 6 Years Ago
      I think it's kinda stupid, that someone could actually save money by reimporting a german car back to europe. How sick is that?
      An european customer "sponsores" half of an american customers BMW and they already started to move production to eastern european countries like Hungary in order to save serious money. This isn't going to work for long, I tell yah!
        • 6 Years Ago
        Or maybe the jobs they cut in Germany were only the ones that made US bound cars. Maybe they will not be reimporting these US made cars to Germany.
        • 6 Years Ago
        This would not be unusual.

        Japanese companies, sell cars for more money in Japan, where their market is protected from foreign competition. They then can sell cars cheaper in the U.S. to drive the competition out of business.

        Maybe German companies do the same.
      • 6 Years Ago
      Awesome, whatever it takes to increase already record profits, who needs jobs anyways?
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