BMW cuts jobs, ends self-driving project with Mercedes
The photo has been used for illustrative purposes.
“Further steps are needed to make the BMW Group more resilient to external influences and market fluctuations,” bosses said in a statement, adding that the company aims “to achieve planned workforce reductions through attrition and voluntary agreements”.
The 6,000 positions make up a considerable chunk of BMW’s more than 120,000 worldwide, with the job cuts coming as the industry battles a demand trough and production setbacks from the coronavirus pandemic.
Meanwhile BMW and Daimler-owned Mercedes “are putting their cooperation on development of next-generation technology for automated driving on hold,” the Munich and Stuttgart-based firms said in a joint statement.
The two groups had joined forces to catch up their American and Chinese competitors, including Tesla and Google, which have a head start
But talks begun last year had showed that “in view of the expense involved in creating a shared technology platform, as well as current business and economic conditions, the timing is not right,” they said.
“Cooperation may be resumed at a later date,” the two firms added.
BMW had already announced in May that it would bulk up a cost-cutting programme to tackle the economic devastation of infection control measures introduced to fight the coronavirus.
Bosses had already planned to reduce investments, while they hoped to slash labour costs via attrition rather than the additional measures announced Friday.
Now BMW has resorted to slashing two hours a week for some workers and granting others an extra eight days’ holiday per year in exchange for lower pay. Like Daimler and industry behemoth Volkswagen, BMW expects the pandemic to inflict an operating loss for the second quarter.
Many of its showrooms had to be closed for weeks.
And over the full year, its pre-tax profit is expected to be “significantly lower” than 2019’s 7.1 billion euros ($8 billion).
Europe’s auto market collapsed by 52.3 percent year-on-year in May, although the plunge was less steep than in April.
Meanwhile 41.5 percent fewer cars were sold in the first five months than last year.
A shrinking car market, a costly transition to electric power and harsh new EU penalties for excessive CO2 emissions were all already sapping Germany’s flagship industrial sector before pandemic lockdowns bit.
Meanwhile, domestic US travel spending is expected to collapse this year amid the coronavirus pandemic, suffering a 40 percent decline compared to 2019, while international spending will plunge 75 percent, according to new research.
The report, commissioned by the US Travel Association, showed spending by US residents will drop to $583 billion this year from $972 billion last year.
Total travel spending, including domestic and international visitors, is projected to fall 45 percent to $622 billion, according to research by Tourism Economics, a division of Oxford Economics.
That decline follows three years of steady, albeit modest, growth of around four percent a year, although international travel dipped in 2019.
The association labeled the downturn “The Great Travel Depression,” and said 8.1 million travel jobs have been lost.
The group is lobbying Congress to provide additional support for the travel industry, including expanding the popular Paycheck Protection Program (PPP) to include organizations that promote tourist or business venues and also provide $10 billion in grants to provide healthy travel practices.
These destination marketing organizations “drive demand and economic development to communities across the country and are vital to recovery,” the association said in a LinkedIn post Thursday.
“We need relief, protection and stimulus to revive the travel industry and set America on the path toward recovery.”
Other sectors also are seeking more support beyond, and a bipartisan group of lawmakers are crafting legislation to help the food services industry, which has been hard hit by the shutdowns and fears of the virus, leaving businesses struggling to attract customers and remain profitable.
Agencies
