BMW management and labor have reached an agreement on ways to decrease costs that prevent “drastic measures”, the German automaker stated on Wednesday.
BMW had been in discussions with labor representatives and its top providers as it looks forward to achieve cost savings of over 12 billion euros ($13.23 billion) by 2022.
The agreement involves decreasing a payout scheme for employees based on company profits, as well as changes to Christmas and other bonuses for some employees. The measures are effective from 2020.
The announcement comes a day following Volkswagen’s luxury car unit Audi’s statement that it would cut one in 10 jobs, freeing up billions of euros to fund its transition toward electric vehicle production.
“We have achieved a solution based on solidarity. This permits us to avoid drastic measures that others are currently taking to reduce their costs,” CEO Oliver Zipse stated.
Automakers have been having a hard time with an auto industry downturn, generally in China, and the need to boost investment in electric vehicles as several countries move to eventually prohibit conventional combustion engines.
Competing automakers such as Daimler and car suppliers such as Continental and Osram have also announced staff and cost cuts in recent times.