FRANKFURT -- BMW is taking its drive for record output to court after labor representatives opposed hiring more temporary employees, in a rare clash between the carmaker's management and the shop floor.
The world's best-selling luxury carmaker employs about 1,100 workers without longer-term contracts at its Leipzig factory in eastern Germany, or almost 30 percent of the total.
Labor representatives refused to support a new round of temporary contracts, saying the practice creates a two-tier system of employees.
"It's clearly unusual for BMW to have such an argument in public," said Juergen Pieper, a Bankhaus Metzler analyst in Frankfurt. "BMW wants to protect its well-paid core staff, and the last crisis showed the importance of flexibility."
The confrontation underscores German companies' push to make their work force more nimble, in a country where rigid labor laws make hiring and firing protracted processes.
The BMW Group aims to sell more than 2 million vehicles by 2020 from a record 1.67 million last year. BMW brand sales reached 1.38 million in 2011, putting it ahead of Audi with 1.3 million and Mercedes with 1.26 million, as BMW seeks to maintain its lead in global premium sales.
Jochen Mueller, a spokesman for BMW in Leipzig, said temporary workers are paid the same base salaries as long-term employees, and the mix gives the carmaker more flexibility.
Jochen Frey, another BMW spokesman, said permanent staff last year got a bonus worth close to a month's salary, which temps did not get. He said that bonus varies with corporate profit.
The Leipzig factory assembles the 1 series compact and X1 SUV and produced 186,800 units in 2010. BMW is spending 400 million euros ($529 million) to expand the facility and the automaker plans to hire another 350 people permanently at the factory this year and welcomes applications from current temps, Mueller said.
Last year, the automaker gave about 170 temporary workers in Leipzig permanent contracts in 2011 because of strong demand.
German companies with more than 20 workers require approval from employee representatives when hiring. Should the court in Leipzig side with the employees' decision to refuse backing the hiring, BMW will need to consider "alternatives," Frey said, without elaborating.
Employing temporary workers can help lower labor costs, which stood at 43.76 euros per hour in 2010 in the automotive industry, according to data German carmakers' association VDA. That's 58 percent higher than in the United States and almost six times higher than in neighboring Poland.
BMW had 11,000 subcontracted employees among its 100,389 workers as of Sept. 30, 2011.
Around the corner
"They tell us the next crisis is just around the corner, so they need temps in order to be able to cut staff quickly and cheaply," Jens Koehler, who heads the works council at BMW's Leipzig plant, said. "We don't agree with that."
In the economic downturn after 2008, German companies responded with shortened workweeks. This move was credited with avoiding major layoffs and helping kick-start production once demand rebounded.
Daimler reduced hours of about 120,000 people, almost its entire German work force.
German labor law stipulates that temporary employment must be transient, while there is no definition for a maximum time period. Some BMW employees have been temps at the carmaker for years, the union said.
Temporary workers are more flexible because they are employed by an agency and can be removed when demand slackens.
The workers often don't get additional compensation for night shifts, Christmas and vacation pay or one-time bonuses, according to the IG Metall metalworkers union, which represents large parts of Germany's manufacturing workers, including those working at automakers.
A first court hearing on the issue is scheduled for Wednesday.