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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Reader Comments (Page 1 of 2)
Zerk @ Mar 10th 2008 2:15PM
198,628 sales WORLDWIDE???????
rgseidl @ Mar 10th 2008 2:22PM
I think those numbers are off by about a million units.
RGS @ Mar 10th 2008 2:23PM
"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."
Michael Harley @ Mar 10th 2008 2:34PM
Fixed. Thanks!
Andrew @ Mar 10th 2008 2:17PM
Manufacturing coming back to the U.S. Now that doesn't happen every day. Yay BMW.
RIck Cavaretti @ Mar 10th 2008 2:36PM
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.
3seriesisking @ Mar 10th 2008 2:25PM
I was thinking the same thing. Yay BMW! lol..
BowserUSC @ Mar 10th 2008 2:19PM
Damn Americans stealing our jobs. Next thing you know even our telephone customer service jobs are gonna be outsourced to the US, and they probably wont even speak German so it's just gonna be even more of a hassle.
psarhjinian @ Mar 10th 2008 2:29PM
It's true. You'll call up and you'll supposedly be speaking to "Gerhardt" but you just know it's some guy named Bob in Alabama.
Besides the accent, you can always tell by asking them about the weather.
FSM @ Mar 10th 2008 2:31PM
nein!
zamafir @ Mar 10th 2008 2:20PM
Awesome, whatever it takes to increase already record profits, who needs jobs anyways?
rgseidl @ Mar 10th 2008 2:21PM
BMW's layoffs in Germany, Austria and elsewhere in Europe are not only due to the dollar exchange rate and, they're not only affecting hourly workers.
BMW's middle management has reportedly become rather too unwieldy and independent for the executives' liking, so the ranks are being thinned in the context of a general cost-cutting drive.
KT @ Mar 10th 2008 2:30PM
Hey, who knows, this may be the second coming of the Industrial Revolution. Lord knows we need to gain back some of those lost mfg jobs.
FSM @ Mar 10th 2008 2:33PM
Now offer cloth seats in your cars and I will fall in love with BMW.
SPG @ Mar 10th 2008 3:24PM
That would be really frikken nice if they would do that in North America.
In the meantime, perhaps look into importing one from Europe?
jg @ Mar 10th 2008 6:41PM
BMW Individual. They will give you cloth seats if you ask. They'll fight ya for awhile but you can get what you want (or in the case of the sunroof/moonroof, don't want). Your salesman might pretend he doesn't know what BMW Individual is but the sales manager will know.
Mr. Oak @ Mar 10th 2008 2:34PM
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.
bert @ Mar 10th 2008 2:45PM
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...
Andrew @ Mar 10th 2008 2:48PM
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.
Mr. Oak @ Mar 10th 2008 3:03PM
Andrew I don't even know where to begin to reply your wide of the mark comment.
To say that Ford and GM are not improving, Especially GM, tells me a couple of things. Either you don't know what you are talking about, or you're a dishonest person.
1 Trillion dollars and counting is a lot of money to piss away. If the next president just ends the war it would be a start.