CEO says BMW in “biggest crisis in its history;” rivals have similar concerns BMW, which has seen it sales double since 1999, is now in the “biggest crisis in its history,” CEO Norbert Reithofer told Germany’s Spiegel. Like all automakers, BMW’s sales have been hit hard by the financial crisis, but the company’s reliance on leasing for a large percentage puts it in an even more vulnerable position. Reithofer isn’t alone in his sentiment. Daimler boss Dieter Zetsche admitted the situation could easily be the “worst crisis since World War II.” If that’s the case, expect more job cuts and production slowdowns at Mercedes and BMW. Even Volkswagen, which has a much broader brand and model mix, is concerned about its future. “We have never before seen this kind of a crisis,” chairman Martin Winterkorn said. He said it would be impossible for his company to avoid “difficult cuts” and “painful” measures. According to the New York Times, luxury cars from BMW and Mercedes are beginning to pile up at U.S. ports. But they aren’t the only ones. Literally thousands of Toyota and Nissan models have filled acres of land at the port in Long Beach, California. In fact, Mercedes, Toyota and Nissan have requested to lease additional space at a 160-acre lot to park their slow-selling cars. Recently, Toyota Executive Vice President Mitsuo Kino****a characterized the current situation as “an emergency, of a magnitude we have never seen before.” So is any automaker immune to the economic collapse in America, Europe, and Asia? Simply put: no. After all, Mercedes, BMW, VW, and Toyota are usually thought of as the most stable automakers in the world. Their survival will depend entirely on their ability to quickly adapt to slowing sales. Without the same rigid union and legacy costs of the Detroit Three, we’re hopeful they’ll all pull through. http://www.leftlanenews.com/ceo-say...n-its-history-other-execs-share-concerns.html
If auto makers want to survive they are going to have to cut the cost of their products. But I dont see them doing that so they will just lay people off and hire more folks when they need them again.
How about innovating something better than 1 more MPG. I guess they only make billions of dollars, where can they find the revenue to invest in such nonsense.
There is a better solution. Quit over producing. Quit encouraging people to buy things they can't afford or want. Quit encouraging people to go further in debt. Quit adding to the problem. Quit forcing the economy to expand when it can't expand anymore. Its time to cool off. Let it happen.
If it is the EVIL Unions that causing Detroit to die why are the german companies dying? They don't have unions. . they should be ok . . right? They should never have been in this situation . . since Unions are the source of all evil. Rocket River
The entire auto industry is going to feel the burn....so many cars that no one wants anymore... The Oil going up so sharply has turned the worlds focus on getting away from Oil...... The first auto manufacturer with a legitimate Electric/Gas hybrid will set the course. DD
Not yet, but I expect Car prices to be slashed dramatically to get rid of inventory. Maybe you can check Overstock.com to get that M3? DD
It's because up until now the world's economy was relying on America's rabid consumerism to provide the demand for their overreaching production lines. This is not some short-term economic crisis; at least I hope not. I hope that this cutback in American spending is a permanent rectification of a type of lifestyle that could not persist, one that had many wants dictated to us by marketing departments of non-industrial big businesses. Americans bought more products, ate more food, and required a much greater healthcare and pharmaceutical network (and subsequent governmental strain upon federally funded healthcare) than did the citizens of any other country. If commercial businesses are forced to look into other markets besides ours for a new cash cow to render dependent upon their detrimental-to-a-healthy-existence products, then I welcome it wholeheartedly. We need to get back to work on how we can live better before the government goes bankrupt from having half our population require federally funded dialysis. Seriously, dialysis service is far and away the biggest cash investment the govt makes in terms of healthcare, and you can attribute that to diabetes, obesity, and improper food consumption. On one hand you want to blame the people for being irresponsible wrt their wants and needs, but on the other hand you need to reign in those businesses and charge them for the externalities of their operation, just like pollution.
everyone wants to get a piece of the bailout pie before it's gone. I am sure the german govt will step in before bmw goes belly up.
The Big 3 was fully aware they had unions to contend with before the crisis began. Their failure to plan for shifts in their own business model in the event of an EVENTUAL market downturn is not the fault of the unions. It's their own fault for lack of preparation. If they had a viable electric car on the market this past year ...instead of pushing SUV's, trucks and muscle cars, then they'd have plenty of cash on hand cause they wouldn't be able to keep those cars in stock this past summer. BMW, Mercedes and VW too. They haven't exactly been blazing trails on introducing alternative fuel cars either. That's the problem. We all saw it coming for years. We've all been waiting for somebody to step up and produce a viable alternative car. Nobody did it and when oil prices shot up, the car industry was caught with their pants down sucking up profits on big luxury cars.
What did Reithofer see 10 days ago that was different than now? http://www.bloomberg.com/apps/news?pid=20601100&sid=aAcmX3lZaZtM&refer=germany Nov. 20 (Bloomberg) -- Bayerische Motoren Werke AG, the world's largest maker of luxury cars, predicts a profit for 2009 even as a recession looms in Europe and General Motors Corp. said the U.S. market is the worst since World War II. ``We're expecting to be profitable next year; that's the goal,'' Chief Executive Officer Norbert Reithofer said in an interview at the Los Angeles auto show. BMW has responded to the current economic decline by scaling back manufacturing, cutting jobs and seeking concessions from labor unions. The company reported a 63 percent drop in third- quarter profit earlier this month and abandoned an operating- margin target and a plan for record vehicle sales this year. ``There may be added strain on the cost side,'' Reithofer said. The company expects to squeeze fixed costs this year below 2007 levels, though there are no plans for additional cost or labor reductions beyond those already announced. Reithofer spoke as the CEOs of General Motors Corp., Ford Motor Co. and Chrysler LLC were in Washington seeking emergency loans from the U.S. government. ``If such a large company would declare bankruptcy, it would also have tremendous effects on the supply sector,'' Reithofer said. ``I wouldn't like it at all.'' BMW ``definitely'' wouldn't be interested in acquiring GM's Hummer, Saab or Opel brands, Reithofer said. Tougher markets prompted BMW to earlier cancel plans to build a sports sedan based on the Concept CS introduced in April 2007. It's the second new model BMW has scrapped after abandoning plans to build the X7 sport-utility vehicle in August. ``We are proceeding with all other projects as planned,'' Reithofer said. To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net.
I never said the Unions were to blaim. What I meant was that the unions aren't going to make it any easier for the big 3 to recover, something the German industry doesn't have to deal with.
Congratulations on being incredibly misinformed. First, German autoworkers are members of the very powerful IG Metall union. Second, German labor laws are far more restrictive than that of the US, it being a mostly socialist state and such. Third, you should probably do some research before you post about things you don't understand.
Sam, try a gentler tone. He sincerely believes what he says. He has read and seen info a hundred times in the big mainstream media, probably reinforced by biz classes in college which leads him to his conclusions concerning unions. Most corporate employers hates unions. Garbage in; garbage out.
I mean . . he did refer to the obviously uninformed article itself Rocket River Unions bad. . bash them at all times
