BMW to cut jobs in Germany, up US production

COLUMBIA, S CAROLINA: BMW says it will cut 7.5% of its work force in Germany over two years while increasing production in the US by more than 50% 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.��� By building the cars in the US, 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 US 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 2008. That���s on top of 2,500 positions already eliminated. That adds up to 7.5% of the company���s total work force of almost 108,000, including permanent and temporary employees.

In the US, BMW Manufacturing 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, South Carolina plant improves, costs may come down enough to cut prices of their cars,��� Gardner said.

Meanwhile, Volkswagen aims to more than triple annual car sales in the US to more than 1 million a year by 2018, Wall Street Journal said on Monday, citing VW���s top US executive. The Journal reported that Stefan Jacoby, president of Volkswagen America, said he is confident of his company���s success in the US.