BMW Closes LA Warehouse; Lays Off Workers

Nice...

http://www.latimes.com/business/la-f...1163343.column

Not closed. It will be outsourced to a logistics business that specializes in the operations of parts distribution, etc.

Yes, many of those people will lose their jobs.

Sounds awful (for the employees who were counting on BMW)...

all but 3 of the 71 workers will be fired. Something which would never occur if the shop resided in Germany.

Originally Posted by Sloan165

all but 3 of the 71 workers will be fired. Something which would never occur if the shop resided in Germany.

German labor is not competitive. VW cannot compete in the US and now has to resort to making cars in Mexico and the US for the American market. BMW, Mercedes, and Audi are only competitive since there is a domestic market for lots of fast and capable cars so that they sell some of those cars at a high price overseas.

Airlines used to do a lot, from aircraft cleaning to hotels. Later, they concentrated on their core business, what they knew what to do. Hotel, they spun off or sold. Some smaller business functions, they outsourced. BMW NA is doing this. They see that outside companies can do a better and more efficient job than they can.

Ultimately, a leaner and competitive BMW helps consumers. BMW cannot survive by simply saying "we have the best cars so we can overlook costs and then charge $50,000 for a 328i".

Of course, long time workers who counted on lifetime employment are in for a shock and probably a worse lifestyle.

It is too bad that all Americans are not so skilled, smart, and in demand that they would do the highest paying jobs and companies would have to import Mexicans to do unskilled work and work that needs less education (like the BMW parts depot).

It is also too bad that all but 3 of the 71 workers have potential problems ahead of them. Many of them have spent a lot and not had a nest egg. I hope that after 20 years of work, I will have a decent amount saved for retirement and also enough to last 3-5 years of unemployment followed by finding a lower paying job. That requires a lot of financial discipline.

Originally Posted by BMW220i

German labor is not competitive. VW cannot compete in the US and now has to resort to making cars in Mexico and the US for the American market. BMW, Mercedes, and Audi are only competitive since there is a domestic market for lots of fast and capable cars so that they sell some of those cars at a high price overseas.

Airlines used to do a lot, from aircraft cleaning to hotels. Later, they concentrated on their core business, what they knew what to do. Hotel, they spun off or sold. Some smaller business functions, they outsourced. BMW NA is doing this. They see that outside companies can do a better and more efficient job than they can.

Ultimately, a leaner and competitive BMW helps consumers. BMW cannot survive by simply saying "we have the best cars so we can overlook costs and then charge $50,000 for a 328i".

Of course, long time workers who counted on lifetime employment are in for a shock and probably a worse lifestyle.

It is too bad that all Americans are not so skilled, smart, and in demand that they would do the highest paying jobs and companies would have to import Mexicans to do unskilled work and work that needs less education (like the BMW parts depot).

It is also too bad that all but 3 of the 71 workers have potential problems ahead of them. Many of them have spent a lot and not had a nest egg. I hope that after 20 years of work, I will have a decent amount saved for retirement and also enough to last 3-5 years of unemployment followed by finding a lower paying job. That requires a lot of financial discipline.

I agree with most of what you said however the money that BMW saves won't go to give us better less expensive cars or even better engineering or simply better cars minus lessening the cost. It will simply go to the share holders who don't care about our cars like we do or the people who service this industry

Originally Posted by Sloan165

I agree with most of what you said however the money that BMW saves won't go to give us better less expensive cars or even better engineering or simply better cars minus lessening the cost. It will simply go to the share holders who don't care about our cars like we do or the people who service this industry

It's more likely that, directly anyway, it will allow BMW to manage price increase pressures here in the U.S. The cost of their own parts production, cost of shipment of said parts to the U.S., and related costs like money (currency exchange) are only increasing, as might have been the wages of these folks. Cutting costs can increase profitability but it also offsets other unavoidable/less avoidable cost increases that might otherwise require price increases and revenue loss.

A typical liberal newspaper column from California. While I feel sorry for those who are losing their jobs, the one-sided story is an embarrassment to say the least.

Not to sound callous, but that rant was absurd. Seriously....getting paid $25/hr + full benefits for unskilled warehouse labor? That's crazy. I'm sure a 3rd party could do it for much much less. Sorry, but its not even like being a skilled tradesman, that's the kind of work you get high schoolers to do, not plan to raise a family off of. Poor planning on the workers' parts. Also, the sky is hardly falling when they lay off 60 something people in a company with thousands of employees.

Sent from my Droid using Bimmer App

Interesting thread. It would also be interesting to see what is the philosophical opinion of the various posters about what is (or should be) the core, fundamental guiding corporate goal of BMW, and how that opinion correlates to their opinion about what BMW is doing with the warehouse.

It is understandable why the plant is closing.
Our perspectives would differ if the plant closing directly affected us.

The key data points will be how will this change affect the performance/delivery of said parts to the technicians in the service centers? BMW parts distribution was very German prior to this. By that I mean like a Swiss train, you could set your clock by parts deliveries. If that does not continue, dealers and hence consumers will pay the ultimate price -- extended stays in the service bays due to slower order fulfillment. The likelihood of the incorrect part being shipped from the distribution center will probably go up as well.

Originally Posted by dalekressin

It is understandable why the plant is closing.
Our perspectives would differ if the plant closing directly affected us.

+1 Absolutely

@JonS.- I like that thought also, you get the labor that you pay for and you would probably be a lot harder pressed to by the same type of pride for say $12.00 an hour. It always seems to work both ways I guess.

Originally Posted by Jon S.

The key data points will be how will this change affect the performance/delivery of said parts to the technicians in the service centers? BMW parts distribution was very German prior to this. By that I mean like a Swiss train, you could set your clock by parts deliveries. If that does not continue, dealers and hence consumers will pay the ultimate price -- extended stays in the service bays due to slower order fulfillment. The likelihood of the incorrect part being shipped from the distribution center will probably go up as well.

I am not sure if I agree the service level will drop drastically enough that we'll notice the change.

I don't believe the wages paid to the union workers is a good gauge of their productivity or quality of work. For example, Amazon's non-union workers, who get paid much less, have never shipped me the wrong item out of the hundreds of million items in their inventory or late.

Again, I am very sorry for those who are losing their jobs and their families, but BMW has chosen a more economical (and maybe a more efficient) path. We probably have the Sacramento bureaucrats to thank for creating such an anti-business environment in California. Case in point: Toyota's Fremont plant left California in 2010. This is a trend we are seeing in California, and I doubt it will stop unless we fix the fundamental problem instead of demonizing the companies that are leaving.

Originally Posted by Jon S.

The key data points will be how will this change affect the performance/delivery of said parts to the technicians in the service centers? BMW parts distribution was very German prior to this. By that I mean like a Swiss train, you could set your clock by parts deliveries. If that does not continue, dealers and hence consumers will pay the ultimate price -- extended stays in the service bays due to slower order fulfillment. The likelihood of the incorrect part being shipped from the distribution center will probably go up as well.

I would say the parts delivery portion of the service process is already broken and may have been for some time.

My 135i just spent 2 months idle in the service bay for nothing other then a front brake caliper. Now I'll grant that brake calipers are rarely replaced and so stock would be few or one. However there were none in NA and none in Germany. For 7 weeks. It's my and the dealership's understanding that BMW finally sent someone to Leipzig to pull one off the assembly line. That is a broken process if there's ever been one.

Having said that the performance on 99.9% of the parts distributed through the system will likely remain unaffected by this action and admittedly in my case the employer affiliation of the workers had no bearing on my situation.

Originally Posted by Jon S.

The key data points will be how will this change affect the performance/delivery of said parts to the technicians in the service centers? BMW parts distribution was very German prior to this. By that I mean like a Swiss train, you could set your clock by parts deliveries. If that does not continue, dealers and hence consumers will pay the ultimate price -- extended stays in the service bays due to slower order fulfillment. The likelihood of the incorrect part being shipped from the distribution center will probably go up as well.

This regretably is highly likely with a third party outsource.

Originally Posted by E36 Phantom

Not to sound callous, but that rant was absurd. Seriously....getting paid $25/hr + full benefits for unskilled warehouse labor? That's crazy. I'm sure a 3rd party could do it for much much less. Sorry, but its not even like being a skilled tradesman, that's the kind of work you get high schoolers to do, not plan to raise a family off of. Poor planning on the workers' parts. Also, the sky is hardly falling when they lay off 60 something people in a company with thousands of employees.

Sent from my Droid using Bimmer App

This.

I worked as General Sales Manager at a large BMW Center for eight years, and that was after stints with Honda, Nissan, and Chrysler/Jeep. From experience, there was something very BMW about even the parts distribution process. I'm serious. It's an attitude I would say, a positive attitude derived from pride of working for arguably the best large auto manufacturer on Earth. I am sure the sheer cleanliness of the facilities was at least a standard deviation above the mean if anyone kept track of that sort of stuff. I am not just blowing smoke out my tailpipe when I say that I doubt that a 3rd-party outsourcer will carry that same level of pride as BMWNA workers do. That goes from the top brass at Woodcliff Lake on down to the undergraduate Summer interns and everyone in between. You all might not notice an obvious difference, but I suspect that dealership personnel will right away...

Originally Posted by Sloan165

I agree with most of what you said however the money that BMW saves won't go to give us better less expensive cars or even better engineering or simply better cars minus lessening the cost. It will simply go to the share holders who don't care about our cars like we do or the people who service this industry

And this is no different than any other corporation. What is the point of this thread????

Originally Posted by energetik9

And this is no different than any other corporation. What is the point of this thread????

That maybe if BMW is beginning to do things the same way GM, Ford, and the rest do it, that BMW will become just more expensive Fords.

The quality of the parts distribution system is one of the reasons we keep coming back to BMW. My first BMW was 10 years old when I bought it. Even when it was 15 years old, I could get interior parts. Not only do parts arrive when promised but they are always the correct parts and in perfect condition. Eleven years and five cars later, we've never had a single problem with a BMW part. I can't say that for any other car brand we've owned. Well, Vauxhall is one for one. Ask me again in ten years.



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$12/hour is $24,960 a year. That is not a living wage in Los Angeles. Not a decent one. Apartments are $2000/month. No benefits either.

http://www.heraldsun.com/view/full_s...omeseventhleft

New Hires at the SC plant are being paid $15/hour -- but SC is a less expensive place to live and they get benefits.

Originally Posted by Jon Shafer

I worked as General Sales Manager at a large BMW Center for eight years, and that was after stints with Honda, Nissan, and Chrysler/Jeep. From experience, there was something very BMW about even the parts distribution process. I'm serious. It's an attitude I would say, a positive attitude derived from pride of working for arguably the best large auto manufacturer on Earth. I am sure the sheer cleanliness of the facilities was at least a standard deviation above the mean if anyone kept track of that sort of stuff. I am not just blowing smoke out my tailpipe when I say that I doubt that a 3rd-party outsourcer will carry that same level of pride as BMWNA workers do. That goes from the top brass at Woodcliff Lake on down to the undergraduate Summer interns and everyone in between. You all might not notice an obvious difference, but I suspect that dealership personnel will right away...

I was one of the lucky customers who got to buy from your dealership in SB (until you forced us to find a new one! ), and I don't doubt what you're saying about the corporate culture at BMWNA.

Originally Posted by Andrew*Debbie

http://www.heraldsun.com/view/full_s...omeseventhleft

New Hires at the SC plant are being paid $15/hour -- but SC is a less expensive place to live and they get benefits.

SC is a less expensive place, but I am willing to bet much of the difference comes from union (CA) vs. non-union (SC) affiliations. I doubt BMWNA will be building plants in California any time soon.

Originally Posted by enigma

I was one of the lucky customers who got to buy from your dealership in SB (until you forced us to find a new one! ), and I don't doubt what you're saying about the corporate culture at BMWNA.




SC is a less expensive place, but I am willing to bet much of the difference comes from union (CA) vs. non-union (SC) affiliations. I doubt BMWNA will be building plants in California any time soon.

No. You are wrong. It is less expensive because most things are cheaper. Rents are lower, restaurant food is cheaper, houses cost less, there are fewer services and the taxes are lower. You know, it is cheaper because it costs less.

That's why retirees move there. Lower taxes, they vote against all school budgets, cheaper houses, lower utilities, it is just cheaper to live there overall.