Apple Strudel?
Posted on 03/09/2008 11:21:01 PM PDT by Vince Ferrer
COLUMBIA, S.C. (AP) -- 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.
The upside to being the newest third world country.
I see a lot of the X3 and X5, both built in the US, around these days.
I don’t know of many manufacturing plants in Rwanda.
Now, what will the Turkish Muslim workers in Germany do?
Go on the dole? With all four wives?
Move to the US, of course.
Since the move the South Carolina, BMW is renaming itself. No longer will BMW mean Bavarian Motor Works (Bayerische Motoren Werke). It now means Bubba Making Wheels!
I’m driving my fourth BMW. I think it’s the best production car in the world. I didn’t think anything could top the 2003 until I got a 2007. Both of these were assembled in SC, proving U.S. quality (but also German engineering).
When you factor in the cost of maintenance (bundled into a BMW) and the lower lease price due to the higher residual, BMW’s are pretty good values too.
>> The upside to being the newest third world country.
So we can now expect more companies to return to the good ol’ days of “in” sourcing.
Any takers?
Cuckoo clocks?
Dirndls?
Alpenhorns?
Bangers & Mash?
those cute wooden shoes?
Apple Strudel?
I drive an Audi.
“So we can now expect more companies to return to the good ol’ days of “in” sourcing.”
Let me teach you what i’ve learned from life:
Those who “source out” are going to be the ones that will “source in” in the future.
“I’m thinking of some UNIQUE European things for the US market that can be built here cheaper without sacrificing quality.
Any takers?”
French Cheeeeseeee !
Hmmm. How comes americans are buying foreign european cars from SC, but are outraged by the AF decission to buy a “american-Northrop-but-european-technology-based-Airframe-build-in-AL tanker” ?
Agreed. The X5 and Z4 were being built in Spartanburg long before the US dollar started tanking and was all about capturing the market and reducing costs by getting the factories closer to its major market to reduce all those overseas shipping costs. The X5 and Z4’s built at that plant are not only sold in the US where the majority for those cars demand is, but exported to Europe and the rest of the world.
Saw a tv show that detailed the construction of a Z4 at the Spartanburg plant. They were building left side driver versions as well for England, etc...
I just bought my second BMW in Dec., an X3 and I couldn’t be more pleased with the ride.
Something not many people know is that many 3 series sedans are now built in South Africa.
BMW has already decided that the new X6 crossover style SUV that will start production in about a year will be built at Spartanburg, and the next generation X3 (model year 2010) will be moved from assembly in Graz, Austria to Spartanburg as well.
Good news for South Carolina’s economy and good news for manufacturing jobs there.
This is a great deal for more Americans to work for our new foreign masters. German in this case
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