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BMW to eliminate 8,000 jobs and put pressure on suppliers
By Yoann Besnard on 24 December 2007 | 
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With the goal to increase its profit margin to between 8% and 10% by 2012, BMW double its efforts to move up from a current level of 5.5%. First it put pressure on suppliers and secondly plans a big layoff.
BMW has decided to cut cost and will de so by pressuring its suppliers. This is a surprising move for them as the company has always been known for its commitment to quality over price and favouring long-term contracts.
But the most astonishing news is the company's plan to eliminate 8,000 jobs, that's to say about 8% of its global workforce that currently stands at 108,000 employees.
Is BMW in trouble? No, the company still makes profit, but the 2007 figures won't be as good as the previous year. Indeed BMW suffers from higher cost in product development. The Volkswagen plan and Audi will to sell 1.5 million vehicles by 2015 oblige competitors to expand their own range. Added to new stricter regulations that target premium car makers, BMW is facing higher costs than expected to develop new models. This strategic move could also go further and includes for the first time a collaboration with another car maker. BMW has already been co-operated with Peugeot for the MINI engine range but a collaboration with BMW models can't be excluded in the future.
