BMW’s share price was not a ‘success story’ in 2007. So said BMW chief executive Norbert Reithofer in a speech to the annual shareholders’ meeting on Thursday (8 May).
He confirmed that the company will continue to increase its dividend payments in the future. “For us, the dividend increase in business year 2007 is a first step,” he said, according to Reuters. For 2007, the company is paying EUR1.06 per ordinary share, up 51.4% compared with EUR0.70 in the previous year while for preference shares, it was 50% higher at EUR1.08 from EUR0.72.
One challenge for the company is planned workforce cuts. BMW is aiming to reduce its head count by 8,100 jobs by the end of this year. While 5,000 of these jobs are hourly, the remainder are not, and only a few hundred people have so far agreed to take redundancy. Unions are not convinced that BMW will reach its target.
BMW struggled last year from the rise in the value of the euro compared to the dollar. Demonstrating the effect of this, Reithofer said: “At the beginning of 2002 we got EUR55,000 for a 5-series sold in the US for US$50,000. Now we get just EUR32,000.”
Reithofer said BMW is a victim of its success in the US, and that the company sells 86,000 more cars there than Mercedes and 240,000 more than Audi.