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BMW to cut 850 jobs

2009-02-17 06:11

London - German car manufacturer BMW AG is shedding around 850 jobs at its Mini plant in Oxford, central England, as it cuts back production in the wake of a 35 percent slump in sales.

The company, which produced 235 000 cars at the plant last year - its only Mini factory worldwide - said in a statement it would now be operating five days a week instead of seven.

"While Mini has been weathering the economic downturn, it is not immune from the challenges of the current situation," the company said in a statement on Monday.

Sales of the Mini, made famous in the 1969 Michael Caine movie The Italian Job, slumped 34.5% in January to just over 10 100 worldwide, according to data supplied by the company.

The news brings the total number of announced job cuts by Britain's struggling car industry close to 4 000 over just a few months.

"Clearly this is very disappointing news. The government is doing and will do everything it can in order to help those affected," a spokesman for Prime Minister Gordon Brown said.

Trade union Unite described the production cuts as scandalous and criticised BMW for sacking agency workers who cannot claim redundancy pay.

"It is tough enough for workers in those car companies who have seen their market collapse in recent months, but BMW makes a top-selling product in the Mini and owed it to their staff to treat them better," said Unite Joint General Secretary Tony Woodley in a statement.

Severe downturn

The production cut follows a severe downturn in car sales which has hurt manufacturers across the globe.

In the UK, major car makers including Nissan, Ford, Jaguar Land Rover and Aston Martin have announced over 3 000 job cuts in recent months.

Britain said last month it would guarantee up to 2.3 billion pounds ($3.3 billion) of loans to help keep the car industry afloat, a deal welcomed cautiously by industry bodies but criticised by trade unions for not going far enough.

The Opposition Conservatives said the Mini job cuts showed that the move was ineffectual.

"This is another major blow to the car industry and shows that Gordon Brown's policies simply aren't working. We need to get credit flowing through to business," Shadow Work and Pensions Secretary Theresa May said in a statement.

Britain's car industry is largely foreign owned, but still employs more than 800 000 workers.

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