BMW is shutting down its production due to the coronavirus pandemic and expects a significant drop in sales and profits in the current year. “The BMW Group is countering the foreseeable development in demand on the global automotive markets by adjusting its production at an early stage,” the carmaker announced on Wednesday.
CEO Oliver Zipse became more specific at the balance sheet press conference on Wednesday morning: “As of today, we will shut down our European automotive plants and the Rosslyn plant in South Africa. The production interruption is expected to be scheduled for April 19.”
Due to the worldwide spread of the virus and the containment measures, BMW expects demand to be significantly affected in all major markets. The Group’s car sales in the current year should, therefore, be significantly below the previous year’s level. A negative impact on earnings is expected in the first half of the year in particular. As a result, the Group’s pre-tax profit will decrease significantly compared to 2019.
BMW also wants to use its own company agreements for short-time work. “This stipulates that the net income of a tariff employee at BMW is at least 93 percent of the usual level, even for short-time work,” said works council chief Manfred Schoch. Other instruments are the use of working time accounts and the possibility of working from home.
Zipse said BMW wanted to maintain the balance between employee health and the company’s economic success. “Because there is a time during Corona and a time after Corona.”
BMW had already presented key figures from the previous year in the previous week. The group dampened the 29 percent drop in profits to five billion euros thanks to growth in the second half of the year. Other auto companies such as Volkswagen and Daimler interrupt a large part of their production in Europe because of the coronavirus pandemic.
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