MUNICH, Germany (AP) — Luxury car maker BMW AG said Wednesday it will cut another 5,600 jobs by the end of 2008, on top of 2,500 other positions that have already been eliminated, as it moves to pare expenses amid a wider cost-cutting program.
Speaking to reporters in Munich, where the company is based, BMW's head of personnel, Ernst Baumann, said that the jobs being cut include 2,500 full-time and 2,500 temporary workers, along with 600 other positions in Germany and elsewhere, primarily international sales and distribution positions.
He said that another 2,500 positions — all of them temporary — had already been eliminated, bringing the total number of cuts and planned cuts to 8,100 positions.
In Germany, BMW has between 6,000 and 8,000 temporary workers. Worldwide, BMW employs just under 108,000 workers, according to company figures.
Baumann said the cost of the cuts, including severance pay, benefits and other expenses, would likely be in the ''three-digit million'' euro range, though he did not specify how much. He did, however, confirm that the cuts would result in as much as euro500 million (US$743.7 million) in savings from 2009 and onward.
Shares of BMW, whose brands include its namesake luxury cars, along with the Mini and Rolls-Royce brands as well as motorcycles, were down 2.4 percent to euro36.50 (US$54.29) in Frankfurt trading after the announcement. That is part of a wider decline by the DAX index, which was down more than half a percent.
In a nod to the rising euro, which hit a record high of US$1.5087 earlier in the day, Baumann warned that other cuts could be in the offing if the dollar continues its fall.
Right now, BMW employs 4,700 workers at its plant in Greer, South Carolina, where it produces the X5 SUV and the Z4 Roadster. It plans boost production there to 240,000 cars a year when it adds more SUV production at the plant. The U.S. is the company's biggest market.
Baumann told reporters that the carmaker intends to increase its overall productivity globally by 5 percent, and admitted its recent spurt in car sales won't last. But he did reiterate that the company plans to sell 1.8 million cars a year by 2012.
''The productivity gains will be bigger than sales growth in coming years,'' he said.
In December, BMW confirmed it would start cutting jobs after new chief executive Norbert Reithofer said he planned to focus on increasing the rate of return for the maker of the pricey and desirable sedans, sport utility vehicles and sports cars.
BMW said in September it would put ''all cost structures to the test'' and continue to standardize processes to reduce costs for each vehicle in development, production, sales and administration.
It said then that it was targeting a rise in productivity of at least 5 percent per year, and Reithofer declared that ''we will focus the entire organization on the return on capital.''
