BMW cutting U.S. jobs in down market

BMW is making work force cuts in the U.S. to adjust for a business slowdown in the wake of the coronavirus pandemic.

The company is expected to cut about 125 corporate staff positions around the country, according to a source familiar with the plans. The reductions account for less than 10 percent of BMW's non-manufacturing payroll in the U.S. 

A spokesman declined to disclose the number of jobs being eliminated but noted the cuts do not affect the automaker's large assembly plant in Spartanburg, S.C.

"The effects of COVID-19 are far-reaching," BMW of North America CEO Bernhard Kuhnt said in a letter to dealers that was obtained by Automotive News. "Given the reduced size of the business, we now need to … re-scale our business across the company accordingly."

BMW sales in the first half of the year tumbled 28 percent, with second-quarter volume down nearly 40 percent from a year earlier, as many dealerships were forced into a COVID-19 lockdown in the spring.

In addition to work force cuts, Kuhnt said BMW will take "additional steps to adapt to the current situation."

"This is an incredibly tough decision — that many of you have also had to make — and this will require change to continue to deliver on our commitments in our partnership," Kuhnt told BMW retailers, noting the operating cuts will result in changes to the dealer-facing organization.

Earlier this year, Kuhnt was guarded about the prospects for the company's recovery in the U.S. from the coronavirus pandemic.

It "is not going to be like in China, which had a clear V shape going into the crisis and going out of the crisis," Bernhardt told Automotive News in June.

"In China, my colleagues were at home for two weeks, and after the third week they were already ramping up their business. When China came out, all the other countries were thinking, 'OK, will we also go through a V-shaped recovery?' I think that's not the case."