BMW presses the brake on spending, against the background of the coronavirus crisis. The Bavarian automaker confirms, this Friday, its intention to cut 6,000 jobs in 2020, in particular via retirements.
As a reminder, the group employed around 126,000 people at the end of 2019. “After the existing flexibility measures,” including short-time working, “additional measures are needed,” said the automaker. These will concern “mainly German sites”, he added this Friday morning after having reported an agreement with the unions.
Operating loss
These job cuts will be made through “natural fluctuation” and with voluntary early retirement. In addition, 40-hour contracts will increase to 38 and some employees may choose to benefit from eight additional days of leave by forgoing part of the salary. “We will find a solution within the framework of a constructive dialogue with the representatives of the personnel”, promises Ilka Horstmeier, the personnel director.
These announcements are part of the framework, announced in early May by BMW, of the strengthening of its economy program. The German automaker, like its competitors, expects an operating loss in the second quarter due to the Covid-19 pandemic. This having resulted the closure of most points of sale for several weeks, which should worsen the crisis in the sector that was already looming. The taxable profit should be this year “significantly lower” than 2019, justifies the Munich company.
Autonomous car in suspension
In addition to the job cuts, BMW also plans to significantly slow down its investments. The coronavirus also got the better of the automaker’s ambitions in the autonomous car. With his partner and compatriot Daimler, they announce that they have, by mutual agreement, temporarily suspended their cooperation in the field. The work stoppage comes after an “intensive evaluation” say the two companies which will now focus on their own ambitions in this area.
If the common project, aimed at developing the “next generation of autonomous vehicles”, may be “restarted later”, BMW and the manufacturer of Mercedes-Benz believe that “the economic environment” does not allow to continue their collaboration. “The significant investment required” is the main obstacle to the continuation of the program mentioned in the press release.
Personal projects
The two groups will however be able to continue these developments “with their current partners”, such as Intel, Fiat and Mobileye on the side of BMW, or other companies. Daimler, already associated with Bosch, “is exploring options with partners outside the automotive sector” to advance in the field of connected cars, said Markus Schäfer, member of the board of directors of the high-end manufacturer, quoted in the press release.
Anxious to catch up on the American and Chinese giants of the autonomous car, the two rival German manufacturers had signed in early 2019 a “strategic and long-term” cooperation agreement. It focused in particular on autonomous driving on motorways and systems allowing vehicles to park without human intervention.