BMW Profit Falls on Costs; Volkswagen to Cut Thousands of Jobs
Bayerische Motoren Werke AG, the world's biggest luxury carmaker, reported its third consecutive quarterly profit decline, while Volkswagen AG said it will cut ``thousands'' of German jobs as record raw material prices eat into earnings.
``We have to reduce the workforce a considerable amount,'' said Volkswagen Chief Financial Officer Hans Dieter Poetsch during a conference call with analysts. Exchange rates and raw material costs are ``challenges,'' BMW Chief Executive Helmut Panke said.
European carmakers have had to cope with a strengthening euro, which makes vehicles more expensive in countries like the U.S. and China, as well as soaring prices for steel and oil, both of which reached records in the past year. Demand for new cars has been stagnant in Europe for the past three years as unemployment hovered near record highs in Germany.
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