BMW finds it difficult to reach cost-cutting goals

The Detroit three aren't the only ones desperately trying to cut costs in their operations, as today's reports have German luxury car maker BMW struggling to reach its 500 million euros (over $766 million) savings goal by the end of 2009. As part of the plan, BMW aims to lay off some 8,100 employees in 2008, but thus far, company sources say the automaker has managed to cut well over 1,000 jobs.

"We said early on that these (job cut) figures can't be reached," said union and BMW's supervisory board member Werner Neugebauer, as per an Automotive News report, citing German daily Handelsblatt. According to the paper, the majority of the company's 5,000 temporary workers were laid off, but union sources say only a few hundred full-time employees have signed voluntary termination agreements. The automaker's agreement with its union prevents compulsory job terminations until 2013.

The automaker is also suffering from the rising cost of raw materials such as steel and the weak U.S. dollar versus the euro conversion, as it recently announced it will raise U.S. vehicle prices by 1 percent.

In related news, Chrysler yesterday said it would cut 5 percent of all its non-production related contracts.