[Kiemyster]

i dont see the big deal.... they are merely just securing themselves "in-case" of anything. theres nothing to be pissed about, they are just covering their asses. And a sales drop of 4 percent is alot harder than you think. owner of a grocery store probably would loose only a few grand at four percent, but BMW would be loosing a considerable amount.

let them do whatever they gotta do.

[ENINTY]

I think the issue is profits decline and not sales decline. Bimmer magazine reported recently that BMW's 2008 profits dropped by 68%. If I remember my history correctly the German government bailed out BMW in the '50s.

[ianbiz]

If they stopped trying to make so many damn cars they could save a ton in R&D. No X1, no X5/6M.

[simnew]

What on earth is all the fuss about ?

The American manufacturers have been well and truly caught out because many of their vehicles are not that desirable anymore - heavy fuel consumption, based on a truck.

The view of people like BMW and others is simple. If the American government can effectively bail out almost the entire US automotive industry then that is a massive distortion in the market. Clearly it is - (thats not to say that I wouldn't do exactly the same thing - we are talking about people's jobs and their families and that is very important). Often the ability of people to buy cars is due to personal loans and if these are drying up through the credit crunch then doesn't matter how good your cars are - they just won't sell. Similarly all companies - even ones that are as consistently profitable as BMW, have to invest Billions in designing new cars and to over come the ups and downs use cash reserves or short terms loan to assist company cash flow.

This is what this is about. BMW remains a very profitable company but rightly doesn't want to see its less successful rivals get tax payers money when it gets none. Its just about being fair....

[ENINTY]

Originally Posted by simnew

What on earth is all the fuss about ?

The American manufacturers have been well and truly caught out because many of their vehicles are not that desirable anymore - heavy fuel consumption, based on a truck.

The view of people like BMW and others is simple. If the American government can effectively bail out almost the entire US automotive industry then that is a massive distortion in the market. Clearly it is - (thats not to say that I wouldn't do exactly the same thing - we are talking about people's jobs and their families and that is very important). Often the ability of people to buy cars is due to personal loans and if these are drying up through the credit crunch then doesn't matter how good your cars are - they just won't sell. Similarly all companies - even ones that are as consistently profitable as BMW, have to invest Billions in designing new cars and to over come the ups and downs use cash reserves or short terms loan to assist company cash flow.

This is what this is about. BMW remains a very profitable company but rightly doesn't want to see its less successful rivals get tax payers money when it gets none. Its just about being fair....

So why is a decision by the American Government to provide low interest loans to one of its own manufacturing industries unfair to a German company like BMW?

GM and Ford are highly successful companies in Europe and much much larger companies than BMW. BMW has been successful in convincing the consumer that its cars are the best. Most BMW owners couldn't tell a BMW from a Buick if they drove them blindfolded. It's the Roundel they are buying. BMW routinely ranks lower in reliability and cost of ownership than the American brands, but because they drive nice, people overlook it. Now that credit is expensive, BMWs are much more difficult to afford. That is why they dropped 68% in profit last year.

[ase2dais]

weird! I heard that BMW is much bigger than the top 3 US automakers combined!

Originally Posted by MarkE90M3

American carmakers recently secured a multi-billion dollar loan guarantee from the federal government but their counterparts across the pond haven’t been so lucky. Late last year the European Commission approved plans to provide up to $6 billion to its automotive industry, far short of the $55 billion in loans Europe’s carmakers had been hoping for, and since then no aid package has been finalized.

According to a new report, BMW is now considering applying to the German government for a state guarantee to back up its borrowings. The news was first reported by Bild Zeitung, which claims BMW Group – which includes the sales of BMW, Mini and Rolls-Royce - is reeling after its sales worldwide dropped 4.3% for 2008. Late last year, Volkswagen also approached the German government seeking guarantees for its financial divisions to cover refinancing of car loans in December.

Incidentally, BMW was one of the most vocal carmakers to criticize the aid package being offered to the Detroit 3. The German carmaker said the aid package would only serve to “distort competition” in the industry and that it should be offered to more companies.

Other countries around the world to start offering state aid to their local automotive industries include Australia, Canada, Spain, and the UK.

Meanwhile, BMW announced today that it would reduce the working hours for more than 26,000 German employees as part of efforts to slow production. The cuts will be limited to facilities in Dingolfing, Regensburg, Landshut and Berlin.

Source: http://www.motorauthority.com