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BMW shuts down European factories over Coronavirus

 March 19, 2020

The BMW factory in Munich, Germany has shut down its European factories after an employee tested positive for Coronavirus.

According to the AFP, the German carmaker made this announcement on Wednesday.

“From today, we will shut down our European car factories and the Rosslyn factory in South Africa,” Chief Executive Oliver Zipse said, adding that the interruption is expected for now to last until April 19.

BMW Finance Director, Nicolas Peter noted that the group now expects pre-tax profits this year to be “significantly lower” than the 7.1 billion euros ($7.8 billion) reported in 2019.

“Measures related to the coronavirus will have a significant impact on the course of our business,” Peter said.

Closing down the European and South African factories will cut down the companies output by half for the month, adding it to the number of car giants affected by the COVID-19 containment measured.

All around Europe, other car manufacturers such as Volkswagen, Ford, Mercedes-Benz parent Daimler, Fiat and Peugeot have shut down their factory doors due to the evolving Coronavirus outbreak.

Why this matters: BMW’s factories around Europe — in Bavaria, elsewhere in Germany and further afield — together with the South Africa plant accounted for half the 2.56 million cars the group built in 2019.

 

“As for many goods, demand for cars will sink sharply” because of the virus and associated containment measures, BMW CEO Zipse said.

He added that the workers would benefit from the highly flexible and effective working-time tools that can help cushion the impact, as the German government has simplified rules of compensation for workers whose work hours are slashed during the COVID-19 crisis.

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