BMW Automobile Production and Its History

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Introduction

BMW is a German manufacturer of automobiles, motorcycles, and aircraft engines (Auto& Schrader, 2005). The company is based in Munich and was started in 1913. The company began by manufacturing aircraft and their engines before switching to producing air brakes for railway vehicles. By 1923, BMW developed its first motorcycle. It then entered the automobile industry after buying the Eisenach vehicle factory for designing small cars. In the period that followed, the company entered the production of cars for sports and the tour industry. The company later suffered substantial loss during War World II in 1945 when their main factories were destroyed. BMW was therefore reduced to producing kitchen and garden equipment before returning to auto manufacturing through an affordable motorcycle in 1948.

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Auto production was however not very profitable until the company resorted to manufacturing sports and touring cars. Thereafter, BMW established itself in the automobile industry competing with Mercedes-Benz in the production of luxury cars both in Europe and America. BMW was later to get in a joint venture with Rolls-Royce PLC, a British aerospace company towards manufacturing aircraft engines for business planes. The company expanded its domain by developing another factory in the United States at Spartanburg, South Carolina. BMW also acquired an 80% stake in the British Aerospace PLC, a company that designed small cars, luxury vehicles, and the Land Rover (Lewin, 2004). The joint venture improved BMW’s financial status and expansion into the automobile industry.

History of BMW automobile production

Franz Josef Popp became the initial force that inspired the development of BMW from 1916 as the General Director till 1942. Another important person was Gustav Otto. He invented the four-stroke combustion engine being an aviator. He led a group that flew machines designed from wood, canvas and propelled by the engine (Zeichner& Simons, 2004). This later transformed the aeronautical industry. The origins of the company were grounded in aircraft production by Karl Friedrich Rapp. However, the engines of the planes presented technical and mechanical problems due to excessive vibration. The combined works of Gustav and Rapp established the current BMW and its present logo is a spherical design of a plane propeller due to its origin in aircraft production.

The first car to be produced by BMW itself was realized in 1932 followed by saloon cars in subsequent years. The 303 saloon was one of the initial magnificent cars to be designed by the company. The company survived several technical and financial problems in its nascent years but resilient management and innovation sustained it in the market. The worst scenario was presented by the Second World War when factories were severely destroyed. The company also suffered from the political ban on its production of aircraft engines and rockets which were used by different forces in the battle. However, BMW struggled and produced a luxury sedan in the post-war period around 1951 but sales were remarkably low due to the devastation of war in Germany. Demand was particularly low and the company’s estimates were quashed by the subsequent events of the war. This demanded that a different approach be used to revive the company.

The launch of BMW 507 after the war provided the company with the chance to re-establish itself in the automobile industry successfully. By 1962, BMW developed another car model that catapulted it from the financial crisis that accompanied the Second World War. The process of recovery continued and in 1990, BMW restarted production of aircraft engines after a joint partnership with Rolls Royce (BMW Car Club of America, 1995). The joint venture business provided the ultimate platform for the growth and reestablishment of BMW in the automobile industry. The company actually bought the Rolls-Royce logo and name originally held by Volkswagen after substantial discussions. This legally set the pace for the transition of ownership between the two companies in favor of BMW by 2003. There was also another purchase in between the years from this original joint venture courtesy of the acquired stake in the Rover Group PLC. Land Rover was eventually bought by Ford while the Rover group succumbing to substantial losses was sold to BMW in 2000. BMW, therefore, bought the naming rights of this original company as well as its brands.

BMW has established itself as a state-of-the-art car manufacturing company. At present, the Z3, Z8 and the entire 3, 5, 7 motorsport series are models that have established the company’s tradition in the production of luxury automobiles (Auto& Schrader, 2005). Emphasis is put on improved performance, style, and technological design. By 1992, BMW had successfully created a competitive advantage in the automobile industry subsequently making more sales than the esteemed Mercedes Benz in Europe. The acquisition of the key trademarks from Rolls-Royce further improved the market status of the company through competitive brands. Production of civilian cars, after the ban on military artillery from allied forces during the Second World War, appeared expensive to impoverished survivors reducing their volumes.

Automobile production during World War II

During the war, the company did not manufacture any cars for the military instead operated repairs and maintenance. Research and development progressed as well. This background in research enabled the company to produce engines for airplanes. Production of weapons was banned while the company exploited forced labor to manufacture civilian cars for the period between 1941 and 1945. These were foreign workers whose status ranged from prisoners to slaves. Production was concentrated in Munich, Allah, Eisenach, and Berlin. Automobile production followed available proposals and prototypes (Guffey, 2008). BMW developed built-in motors with characteristic four and two cylinders that were used in manufacturing agricultural vehicles which include vehicles and tractors. The Austin Seven produced in Eisenach was the initial design that guided automobile production. Later, BMW developed its own cars using a different model but similar to the original Dixie design. The best models were the elegant sports and sedans. The growth of the company in the automobile industry was initiated by the huge demand for its engines.

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At its initial stages, the capacity of the factory was limited to meet the huge demand. Their number of the skilled workforce was also limited. The government in the midst of the war provided supportive machinery to BMW for its increased production. Skilled personnel was also availed by the state due to BMW’s alignment to the war in the production of weapons. Financial assistance from the government further ensured that new factories were properly equipped. BMW, therefore, financed its operations at its onset from external sources thereby reducing its share capital in the business remarkably (Lewin, 2004). The state and commercial banks provided the much-needed liquidity in setting up new factories into operation. The company later developed into a public limited utility. More investors were therefore at liberty to buy shares in the company apart from the state and the banks.

Culture at BMW

The culture of collaboration is well established at BMW. Collaboration maintains good business relations within a business organization in addition to solid affiliations with business partners and even competitors. Collaboration saves a company from unnecessary expenditure as well as strengthens its competitive advantage in the market. BMW and DaimlerChrysler have developed joint partnerships in developing hybrid drive systems that would then guarantee augmented efficiency through economies of scale (Perry, 1998). The result is a win-win situation whereby each of the companies will adapt different aspects of the deal towards increased marketing and commercialization of the brands.

The product referred to as telecom operation involves the integration of collaboration tools and culture in a universal layout of design in vehicle manufacturing. The X5 is one of the vehicles that have been developed through telecooperation initiatives. The culture of cooperation has therefore achieved the production of quality vehicles through concerted efforts involving creative engineers and managers from both companies.

Management culture

The management is flexible, entrepreneurial, and lean. The company is currently the motor vehicle benchmark for the state of the art cars through customized manufacturing and brand management (Guffey, 2008). The entrepreneurial culture is characterized by corporate management based on leader-followership principles. The top management designs the strategy to be employed in the daily operations at BMW in vehicle manufacturing while the factory engineers and technicians are involved in the implementation of the programs towards the production of quality cars. Workers are integrated into the operations of the company through training programs that entrench into the culture of ownership and team spirit. Individuals at all departments of the organization exchange ideas and transfer expertise through informal networks where they are engaged in brainstorming sessions towards the creation of strategies for a profitable company.

Motivated Workers

Workers are appreciated through reward systems that recognize individual efforts where the financial targets of the company are superseded. Employees are therefore hyper-flexible in their work especially when sacrifice is required in adapting to modern technology and demand for more vehicles (Perry, 1998). It is therefore convenient to adjust output to meet demand without straining workers’ input. The management system at BMW also provides for much-needed job security despite the global economic and financial crisis. The recruitment process involves a robust process that screens out applicants with big egos through drilling sessions for shortlisted applicants by a pool of talented managers.

Managers are extensively involved in training new employees as regards the values and systems of operations at BMW. Collaborative leadership is entrenched in the system with managers working closely with subordinates and recruits towards the successful realization of the organization’s objectives. New ideas are therefore effectively implemented through the company through the creation of links with professionals. As such, team spirit and transparency generate impromptu encounters among workers, engineers, and quality experts towards effective designs in vehicle manufacturing.

Every organization has got a unique culture described by its set of beliefs that are shared among its workers. Organizational culture, therefore, dictates on the manner in which people behave while on duty and the paths to be followed in order to achieve organizational goals (Guffey, 2008). Mergers at BMW have therefore brought innovation and expertise into vehicle production towards a quality output. Employees are equally satisfied and motivated in their work as a result of transformational leadership.

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Conclusion

Employees are included in profit sharing provided the company achieves its financial targets. This has created a powerful and harmonious workforce that has propelled BMW into a profitable business empire in vehicle production. Workers are paid for overtime which has increased the production output remarkably. No layoffs have been reported at BMW despite of the financial crisis unlike its competitors such as Ford and General Motors (Perry, 1998). The leadership is composed of a team of talented managers that provide coaching and mentorship to trainee staff after recruitment. Consequently, creative engineering techniques have led to production of quality cars with a competitive advantage in the market.

Reference

Auto, Q., & Schrader H. (2005). The History of BMW. New York: Penguin Group (USA) Incorporated.

BMW Car Club of America. (1995). BMW enthusiast’s companion: owner insights on driving, performance and service. London: Robert Bentley.

Guffey, E.M. (2008). Business communication: process & product. California: Cengage Learning.

Lewin, T. (2004). The complete book of BMW: every model since 1950. Berlin: Motor Books/MBI Publishing Company.

Perry, N. (1998). Hyper reality and global culture. London: Routledge.

Zeichner, W., & Simons, R. (2004). From vision to success: the development history of BMW automobiles; 1918 – 1932. Munich: BMW Mobile Tradition.

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