BMW says it will cut 7.5 percent of its work force in Germany over two years while increasing production in the US by more than 50 percent by 2012.
"This is completely driven by the plunge in the dollar," said Greg Gardner with Oliver Wyman, publisher of the Harbour Report on automotive manufacturing activity. "It is untenable to produce at a much higher cost in Germany."
The euro climbed to record heights on Friday, reaching US$1.5463 before falling back to US$1.5335 in late trading after the Federal Reserve announced it would provide more cash to banks that need it. That means European goods cost more for Americans to buy.
By building the cars in the US, BMW can save money on the lower dollar and on wages since its South Carolina workers make less than German workers, Gardner said.
The declining dollar also means BMW and other foreign automakers will likely start buying locally for more of the parts used by their US plants, he said.
That shift in production has led to the cuts at home for the Munich-based luxury car maker.
BMW's head of personnel, Ernst Baumann, said last month that 5,600 jobs would be cut by the end of the year. That's on top of 2,500 positions already eliminated. That adds up to 7.5 percent of the company's total work force of almost 108,000, including both permanent and temporary employees.
In the US, BMW Manufacturing Co in Greer, South Carolina expects to increase production to 240,000 cars by 2012, company spokesman Bobby Hitt said last month. That's up from 155,000 last year.
"Conceivably, as the volume increases and the manufacturing system at the Spartanburg, South Carolina plant improves, costs may come down enough to cut prices of their cars," Gardner said.
The company has not said what impact the increase in production will have on employment in Greer, which has about 4,500 permanent employees and up to 900 temporary employees.
The company had scheduled an announcement for yesterday at the BMW Zentrum in Greer to discuss an addition to the plant, which makes the X5 and Z4 models.
A spokeswoman at the Greer plant did not return telephone messages seeking comment.
While luxury car sales are expected to be flat or a little down from last year, "BMW will still show growth," said Jack Nerad, executive market analyst for Irvine, California-based Kelley Blue Book.
The company said BMW Group, which includes the Mini and Rolls-Royce brands, sold 198,628 cars worldwide in January and last month, up from 191,357 for the same period last year. Sales of the BMW brand for last month rose to 89,983 up from 85,310 for the month last year.
Nerad and the company say launches of new 1-Series models and the X6 also are expected to lift sales this year.
‘TOO TIRED’: The former mayor’s political party said that he had been questioned for nearly 19 hours, so he declined to be questioned at night, as he felt exhausted Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) was arrested early yesterday morning after being questioned by prosecutors over his alleged role in a corruption scandal concerning the Core Pacific City redevelopment project during his tenure as Taipei mayor. The arrest was made after Ko refused to be questioned at night and attempted to leave the prosecutors’ office, the Taipei District Prosecutors’ Office said. Prosecutors were worried that he would collude with others involved in the case to make false statements if they allowed him to leave, so they issued an order to arrest him, the office said. Ko yesterday sought a court
ECONOMIC RESILIENCE: Only 11.4 percent of Taiwan’s overseas investments last year were in China, and businesses are dispersing their investments elsewhere, Lai said China’s ambition to annex Taiwan is based on a desire to change the rules-based international order, rather than a desire for territorial gains, President William Lai (賴清德) said in an interview. During an appearance on the talk show The View With Catherine Chang, aired last night, Lai said China aimed to achieve hegemony, and that peace and stability in the Taiwan Strait was an issue of worldwide concern. During the interview, Lai also discussed his “four-pillar plan” for peace and prosperity, which he first outlined in an article published by the Wall Street Journal on July 4 last year. That
‘REGRETTABLE’: TPP lawmaker Vivian Huang said that ‘we will continue to support Chairman Ko and defend his innocence’ as he was transferred to a detention facility The Taipei District Court yesterday ruled that Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) be detained and held incommunicado over alleged corruption dating to his time as mayor of Taipei. The ruling reversed a decision by the court on Monday morning that Ko be released without bail. After prosecutors on Wednesday appealed the Monday decision, the High Court said that Ko had potentially been “actively involved” in the alleged corruption and ordered the district court to hold a second detention hearing. Ko did not speak to reporters upon his arrival at the district court at about 9:10am yesterday to attend a procedural
Thirty Taiwanese firms, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and ASE Technology Holding Co (日月光投控), yesterday launched a silicon photonics industry alliance, aiming to accelerate the medium’s development and address the energy efficiency of artificial intelligence (AI) devices like data centers. As the world is ushering in a new AI era with tremendous demand for computing power and algorithms, energy consumption is emerging as a critical issue, TSMC vice president of integrated interconnect and packaging business C.K. Hsu (徐國晉) told a media briefing in Taipei. To solve this issue, it is essential to introduce silicon photonics and copackaged optics (CPO)
RSS