EXCLUSIVE: SPAIN: Future of BMW/DC Brazilian engine JV in doubt

By just-auto.com editorial team | 23 March 2005

The future of BMW's $500 million Brazilian Tritec joint venture with DaimlerChrysler remains in doubt as neither company will require engines from the plant in future, writes Chris Wright.

Tritec was originally set up in 1998 to produce 400,000 engines a year for the New Mini and the Chrysler Neon. With the Neon no longer being built, BMW is in the process of moving Mini engine production to its Hams Hall plant in the UK.

The engine to be made in the UK is a new unit developed with PSA Peugeot Citroen.

Ernst Baumann, BMW board member responsible for human resources said: "The Tritec joint venture was mainly driven by Mini and while we want to try and help define the future of the plant, we will be pulling out."

He said the German automaker would not completely abandon the business in Curitiba. "We will help as much as we can, just as we did when we pulled out of our business with Rover in the UK.

"We will try and find a solution in a people-oriented way."

Speaking during the launch of the facelifted BMW 7 Series near Malaga, Spain, Baumann also said he did not expect the company to endure the problems suffered by General Motors over commitments to pensions and healthcare.

Last week GM cited these issues among others as the reason for its profits warning announcement. The American manufacturer now has more pensioners than staff and is committed to their long-term healthcare.

Baumann said: "In Germany there is a different type of pension fund and we have a defined contributions system. It is a fixed figure and not a percentage linked to income.

"I do not see BMW coming up against these issues in the future."