Hard shoulder

A round-up of today's other stories in brief

BMW, unions agree increased flexibility on employee work-hours

BMW HAS reached an agreement with union leaders on work-hour flexibility at its German plants in preparation for a possible sales slowdown.

The framework, signed in September, allows the carmaker to lengthen, shorten or cancel shifts, curtail or prolong breaks and set vacation periods more directly, in consultation with the works council. The company declined to comment on a report in German magazine Der Spiegel magazine report yesterday that the measures allow BMW to remain profitable even in the event that sales drop by as much as 30 per cent.

BMW has so far fended off the European auto-market slump this year with delivery growth in China, and its planning on record sales this year at its BMW, Mini and Rolls-Royce car brands.

A European car-industry trade groups prediction that the sales may drop as much as 10 per cent this year has prompted cutbacks at other car firms, including Fords move last week to close three plants and cut 5,700 jobs. The agreement at BMW also includes hiring 3,000 employees by the end of next year and limiting the temporary workforce to a maximum 8 per cent of the production workers.

– (Bloomberg)

Fiat chief proposes link with Peugeot, Opel to rival VW's Euro reign

FIAT CHIEF EXECUTIVE Sergio Marchionne approached PSA Peugeot Citroen and General Motors Co earlier this month about creating a pan-European combination to leapfrog Volkswagen Group as the regions largest automaker, three people familiar with the matter said yesterday.

Marchionne proposed that Peugeot commit to a combination between Fiat, the French carmaker and GM’s German Opel unit in exchange for stock in the new entity, said the sources, who asked not to be named. The ceo also offered to take Opel as part of the deal if he got $5 billion to $7 billion to restructure the unit, two of those people said.

The Marchionne is looking for a European partner to break the Italian carmaker out of its isolation in the region after GM and Peugeot announced an alliance earlier this year. Complicating any deal with Peugeot is the automakers acceptance last week of €7 billion in bond guarantees from the French government, which will require the company to put labour and government representatives on its board.

A combination would have given the new entity more heft to compete with Volkswagen as the industry weathers the sovereign- debt crisis. Together, Fiat, Peugeot and Opel account for 25 per cent of the regions auto sales, topping VWs 24.8 per cent share. The three have struggled to reverse shrinking European sales as the crisis pummels consumer confidence. – (Bloomberg)