Associated Press
March 9, 2008
BMW To Build More Cars In U.S.
With Dollar Low, German Automaker Will Increase Production In America
While Cutting Jobs At Home
COLUMBIA, S.C. -- On one side of the Atlantic Ocean, BMW says it will
cut 7.5 percent of its work force over two years. On this side of the
water, the company says it plans to increase production 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 Friday, reaching $1.5463 before
falling back to $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 U.S., 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
likely will start buying locally for more of the parts used by their
U.S. 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 U.S., BMW Manufacturing Co. in Greer 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 (S.C.) 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 is about 4,500 permanent
employees and up to 900 temporary employees.
The company has scheduled an announcement for Monday at the BMW
Zentrum in Greer, S.C., to discuss an addition to the plant, which
makes the X5 and Z4 models. A spokeswoman at the Greer plant did
not return phone 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, Calif.-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 February, up from
191,357 for the same period last year. Sales of the BMW brand for
February 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 in 2008.
http://www.cbsnews.com/stories/2008/03/09/business/main3920129.shtml
March 9, 2008
BMW To Build More Cars In U.S.
With Dollar Low, German Automaker Will Increase Production In America
While Cutting Jobs At Home
COLUMBIA, S.C. -- On one side of the Atlantic Ocean, BMW says it will
cut 7.5 percent of its work force over two years. On this side of the
water, the company says it plans to increase production 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 Friday, reaching $1.5463 before
falling back to $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 U.S., 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
likely will start buying locally for more of the parts used by their
U.S. 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 U.S., BMW Manufacturing Co. in Greer 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 (S.C.) 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 is about 4,500 permanent
employees and up to 900 temporary employees.
The company has scheduled an announcement for Monday at the BMW
Zentrum in Greer, S.C., to discuss an addition to the plant, which
makes the X5 and Z4 models. A spokeswoman at the Greer plant did
not return phone 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, Calif.-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 February, up from
191,357 for the same period last year. Sales of the BMW brand for
February 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 in 2008.
http://www.cbsnews.com/stories/2008/03/09/business/main3920129.shtml
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