BMW Cuts Production, Seeks German Loan Backing
January 20, 2009
BMW is looking into applying for state guarantees to back up its borrowings, a German
newspaper reported Tuesday. At the same time, BMW announced it will cut production, including that of its 3-Series and 7-Series, by reducing hours of 26,000 workers.
BMW said shorter hours would allow the German automaker to reduce labor costs and production without mass firings. "The highly qualified employees we are able to retain today will give us a decisive competitive edge in the future," BMW said in a statement.
BMW announced it was reducing hours for 26,000 workers in its plan to cut production by 10 percent as the global market for its vehicles weakens. BMW will eliminate shifts at its largest plant in Dingolfing and Regensburg in February and March. The shift cuts will reduce the production of the 3-Series and 7-Series as well as some parts-making.
"Conditions remain challenging on the international automotive markets," the company said in a statement.
BMW did not confirm the report about seeking government backing for loans. However, already Volkswagen has asked for guarantees for its financial divisions to cover refinancing of car loans in December.
Photo by BMW
The 2009 BMW 7-Series is redesigned this year.
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