HAMBURG — BMW management and labor have reached an agreement on steps to reduce costs that avoids "drastic measures," the German carmaker said on Wednesday.
BMW had been in talks with labor representatives and its top suppliers as it seeks to achieve cost savings of more than 12 billion euros ($13.23 billion) by 2022.
The agreement involves reducing a payout scheme for workers based on company profits, as well as changes to Christmas and other bonuses for some workers. The measures are effective from 2020.
"We have achieved a solution based on solidarity. This allows us to avoid drastic measures that others are currently taking to reduce their costs," CEO Oliver Zipse said.
Carmakers have been struggling with an auto industry downturn, particularly in China, and the need to increase investment in electric vehicles as several countries move to eventually ban conventional combustion engines.
Rival Daimler as well as car suppliers Continental and Osram have also recently announced staff and cost cuts.