BMW Labor Leader Scolds Management For Falling Behind In Electric Car Competition

BMW AG’s top labor representative scolded management for falling behind rivals in the race to roll out more electrified vehicles.

In a rare public rebuke of the German automaker, labor leader Manfred Schoch, who also serves as deputy chairman of BMW’s supervisory board, expressed concerns on the timing during an interview on Thursday with Bloomberg in Nuremberg, Germany.

“Management has been slow to decide on investing in more electric models,” Schoch said.

The carmaker must expand its range to include electric versions of its core lineup, including 3-, 5- and 7-Series sedans. “Anything else would be detrimental to the business,” he said.

BMW has been feeling pressure this year as other German automakers commit to plug-in electrified vehicle launches and more competition in the luxury vehicle market comes from Tesla Motors. Volkswagen plans to roll out 30 battery-powered vehicles in the coming years, while Mercedes aims to introduce at least 10 such models.

BMW executives skipped the Paris Motor Show in September to rethink its PEV strategy. The company recently announced a goal to make battery-powered versions of two existing models, the X3 sport utility vehicle and the Mini city car.

Chief Executive Officer Harald Krueger has been under pressure to perform since taking the top spot in 2015. BMW appears to be losing its crown this year to Mercedes-Benz in the luxury segment for the first time in 10 years. Sales of the redesigned flagship 7-Series have been sluggish.

Krueger has been able to keep BMW profitability in check, and hopes that lucrative high-end cars like the X7 SUV will help offset steep investments the company will be making in electric and self-driving cars.

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Schoch would like to see the German automaker move quickly on the PEV front.

“Management must invest in electric mobility now” to remain competitive in the future, he said.

Schoch does see shifting over to building a lot more PEVs will be turbulent for BMW workers. Switching away from vehicles with internal combustion engines to electric cars would mean job losses, he said. A gasoline-engine will have about 1,000 parts compared to just 25 components in a typical electric motor, needing much less time and labor.

New jobs created at BMW in areas including software development and mobility services will soften the blow. However, about 20 percent of BMW workers in Germany will probably see their jobs change in coming years, which will require additional spending on retraining, he said.

BMW declined to respond on the works council chief’s comments.

In 2013, BMW was the first major luxury-car maker to create a stand-alone sub-brand for electric vehicles with its i3 city car, and a year later it introduced the i8 plug-in hybrid sports model. While the company this month celebrated having sold 100,000 PEVs since the i3’s launch, executives have been concerned over slow sales for the i3.

Daimler AG and BMW both have predicted PEV sales will account for as much as 25 percent of total deliveries in about 10 years. For BMW, that would mean selling more than half a million PEVs based on 2015 sales of 2.25 million vehicles, and compares with a 2 percent share of deliveries now.

Bloomberg