BMW Enters into a Cost-cutting Deal with Mercedes

BMW is planning a massive cost cutting program. Because of the losses and general difficulty with their sales last year, BMW is taking all the necessary precautions to ensure their profits remain sky in the near future. They are now having discussions with their rival, Mercedes-Benz, about a plan that will reduce their spending by by $5.2 billion by 2012, mostly on components and suppliers. Yes, it sounds crazy to get help from your competitor. But the figures that this plan promises can be hard to decline. In euros, they expect to cut their costs by 100 million respectively by 2012. Quality will not be sacrificed. Rather, they will help component suppliers be for efficient in developing technologies that they can also sell to other manufacturers. The promise of savings and technological improvements will make this a very hard deal to resist.