BMW to lay off 733 temporary workers

As many as 733 temporary workers at BMW’s Greer plant will be laid off in December as the German automaker begins to feel the effects of the world financial crisis.

Job reductions at the plant that is a powerful economic engine sustaining thousands of jobs in the Upstate and across South Carolina are limited for now to temporary workers the plant employs through the MAU Inc. staffing company.

The plant has a permanent work force of about 5,400 BMW-hired workers, in addition to hundreds of contract and contingent employees.

Those jobs have a potent multiplier effect. An estimated  23,000 jobs have been created through a network of companies in the Upstate that supply the automotive parts and services. How this reduction could play out through that network was unclear late Thursday.

The company said, however, it remains focused on its planned expansion of the plant, which now makes the X3, X5 and X6 models. It plans to launch a diesel-power X5 this year and a hybrid X6 next year.

Bobby Hitt, a spokesman for BMW, said the company “is not unlike any other manufacturing facility in that it is not immune to uncertain circumstances that we are all witnessing in the economy and, more specifically, the automotive industry.”

The layoffs come after a drop in BMW’s U.S. sales in September. Sales of BMW-branded vehicles plunged nearly 30 percent, compared to the same month last year, the company said. Counting Mini-brand vehicles, the sales drop was 25.8 percent.

For the first nine months of the year, sales of both brands were down 4.8 percent, to 236,327 units, compared to the same period in 2007.

Other automakers reported even worse results for last month.

Currently, BMW is exporting about 72 percent of its production, a sign that U.S. sales are soft, Hitt said. But production at the plant is continuing to be relatively strong.

The last day of 2008 production will be Dec. 19, he said. BMW usually closes the plant shortly before Christmas through the end of the year.

Problems resulting from the softening of the automotive industry are not unique to the Greer plant, he said. Several plants in Germany are idling their lines for a week or so in the next few weeks.

“While BMW must manage based on today’s market conditions, we remain focused on our future expansion efforts to produce the next-generation BMW X3 in 2010 along with the X5 and X6 models,” Hitt said.

Despite the worsening economic conditions, the company is in the midst of a $750 million expansion of its Greer facility, which includes a bigger paint shop and a second assembly facility that would increase production capacity from 160,000 vehicles a year to 240,000.

The layoffs of contract workers at BMW are the latest sign of pain in the U.S. auto industry, where employment has fallen 14 percent since last year, said Raymond Sauer, an economics professor at Clemson University. The industry shed 52,000 jobs in the third quarter.

Sauer blamed the credit crisis plus a downturn that he believes is now a full-blown recession.

“We’re getting impacted here on Main Street by the developments that have taken place on Wall Street,” he said.

Curtis Simon, also an economics professor at Clemson, said South Carolina is more sensitive to recession than other states because of its greater reliance on manufacturing.

In manufacturing, Simon said, the work force is more of a “variable input” than it is in other economic sectors, such as services.

“When the assembly line shuts down, you send the workers home,” he said.

Notification of the layoffs has been sent to the workers who could be affected, said Randy Hatcher, president of MAU, a Georgia-based staffing agency.

Most of those affected will be production workers, he said, adding at least 500 workers would be laid off. MAU also provides logistics and administrative workers for the plant.

A report filed by the company said the number could be 733, according to Kara Borie, spokeswoman for the state Department of Commerce.

“We were informed by BMW there will be changes for the last quarter of 2008 and early 2009,” Hatcher said, citing the completion of the production run of the Z4 roadster and coupe at the plant and the overall problems of the automotive industry.

“The BMW contingent work-force strategy was designed to manage our labor requirements through production fluctuations, such as the build-out of the Z4 this fall,” Hitt said. “Given the challenging economic conditions, managing contingent staffing is a vital business requirement. Decisions related to our workforce requirements will be driven by the market impact to our production volume.”

Hatcher said, “We know we will be laying off some people,” but the numbers won’t be final until shortly before the layoffs.

“Any time anyone loses their job, it’s an unfortunate situation,” Borie said. But “it’s important to look at the total impact of BMW. They continue to have a positive impact on the state,” she said, citing as an example the approximately 600 construction workers on the $750 million expansion project now under way at the plant.

In addition, the company has generated total economic output of more than $8.8 billion over the life of the plant from its inception in the early 1990s. A report released recently by the University of South Carolina’s Moore School of Business also attributed the support of 23,050 jobs to BMW, its suppliers and support businesses. That does not include contract employees.

“Those are strong benefits to capital investment,” Borie said, adding none of the positions being eliminated are connected to any state incentives to BMW.

“BMW is a world-class company. We feel confident and hopeful that those jobs will come back,” she said.

Source:greenvilleonline.com