How BMW is preparing its workforce for the EV era

BMW, which has motoren werke, German for engine works, in its name, this week will end more than a century of engine production at its factory in Munich. It's the latest sign of the industry's rapid transition toward electrified drivetrains. Ilka Horstmeier is the board member in charge of adapting and augmenting BMW's workforce to make sure it's ready for the new era. She explained what the automaker is doing to upskill its current employees and shared how BMW is luring the digital, battery and electrification specialists it needs to thrive in the future. She discussed this and more with Automotive News Europe Managing Editor Douglas A. Bolduc.

What is BMW doing differently to find the right people to succeed as the industry transforms?

It's a twofold approach. First of all, BMW wants to take the people we have on board with us on this journey. This makes a lot of sense during times when labor is in short supply and its very competitive out there to get people. Today, for example, people who used to work on combustion engines are now producing electric drivetrains. They have a profound ability to run production, launch cars, launch components, and they know how BMW works. Secondly, we need to add new competencies, so we have increased the number of people who are working on the digitalization of the car and our business processes. To me, this dual approach is one of the secrets to BMW's success.

All established automakers are walking a tightrope. You have to eliminate jobs in some areas, such as engine building, while you race to fill jobs in other areas such as software and battery tech. How is BMW achieving this balance?

It comes down to strategic workforce planning. The key is anticipating what will happen in the next three to five years and taking action. Secondly, you need to make the right decision at the right time. For example, we could have waited until much later to tell the people at our engine plant in Munich that we would end production. Instead, we told them in 2020 because we wanted to give them the opportunity to qualify for new jobs. It was also crucial to have a well-prepared process and to communicate effectively with everyone. We carefully prepared the changes in engine assembly at the Munich plant because the first weeks are decisive to determining whether such a transformation will be successful. And while some workers still cannot understand why this needed to happen, all of them now say, "OK, we got an opportunity to develop our career and to pursue a new job."

How many people were you able to retain?

Of the 1,200 people who were affected we were able to keep most of them. I would say that roughly 5 percent of the people retired or left the company. The rest stayed and today they are working in electromobility at the Munich plant or the Dingolfing plant (about 100 km northeast of Munich). The roles include working in the battery component center or in cell prototyping.

How much of this carryover process was mandatory because it was part of the agreement with your union?

We have a contract with our people to secure their employment, not their jobs, therefore we want them to be flexible. The agreement with the works council gives us the opportunity to build up trust that transformations like this will be done properly.

How does BMW stand out from not only automotive rival but also tech rivals to get the best people?

The key is to offer a purposeful, interesting and attractive task. This is something we have learned from asking our newly hired tech experts why they chose BMW. First of all, they said they were attracted by our mission to make individual mobility digital, electric and circular. Secondly, they were attracted by the complexity of the task of integrating the whole digital experience in a car and the challenge of how to bring all this together to make it a real emotional experience for the customer. The third pillar is that digital talents at BMW have so many different opportunities to move around and to develop themselves. They can go into autonomous driving or UX (user experience) or work on the business IT to name just a few areas.

BMW Group had about 150,000 people at the end of 2022. How much will that shrink or grow by 2030?

While we don't provide information that far into the future, I can tell you that this year we will hire more than 10,000 people and after retirements and departures BMW Group will have a net increase of about 5,500 people.

How is this challenge of finding and retaining people different in Europe, the U.S. and China?

We have a global dashboard where we can look at how the labor market is developing in the different countries to determine how we need to act. For example, in China for years we saw a highly competitive market for IT talent and software experts. That is slowing down because several big tech companies there have been laying off people, so unemployment is on the rise. Therefore, it comes down to knowing what our needs are now -- and what they will be in the future -- and taking the right measures at the right time in our main markets.

What percentage of people in Europe, the U.S. and China can be re-trained so they can continue to contribute?

It depends on the how big the changes are. On the production side, there is a great possibility to upskill the people. They have to be trained on how to deal with high-voltage battery components and high-voltage vehicle systems. Training is the key to that transformation. And we see that a lot of people really want to be trained. In fact, we have provided training on electrification to more than 80,000 people at BMW. This training covers everything from the basics to adding skills to people who have a university level degree. We have done the same for digitalization, with people participating in different training programs more than 330,000 times in the first nine months of the year.

Could you provide more details on the digitalization program?

The main one is called Digital Boost and is the biggest single training initiative in our company's history. The aim of the program is to leverage the company's knowledge of digitalization, that way we all talk the same language on this topic. With that in mind, we offer eight modules with each being about 75 minutes long. Each person takes a five-minute entry test to determine their level of expertise. If you're already an expert you can skip some parts of the training. The topics include digitalization, data security, cloud technology, AI and more. The key is to build up our collective understanding of what digitalization is.

Is this training generic or BMW specific?

We used some modules from external providers, but we added BMW examples so that there is a strong connection to what BMW is doing on these topics.

Is this a one-year initiative?

No. The initiative will continue. Over the last few years, the BMW Group has invested on average about 360 million euros a year into training and continuing education because we see this as a key to the transformation.

If you were giving advice to a high school student on what he or she should study to one day get a job at BMW what would you say?

First of all, I would advise them to pursue a STEM (science, technology, engineering and mathematics) degree because at the moment those are the most needed competencies at BMW. That being said, we also need people in marketing, finance and human resources and several other areas. Secondly, we look for personalities. What I mean is students who have had internships, who have traveled, who have sought out engagements in different areas, who have shown leadership abilities, who are team players and who are not deterred by the upcoming challenges we will face.

You have run a plant and now you are head of labor relations, what are the keys to avoiding strikes like we just saw in the U.S.?

When we look at compensation around the world, we are always looking at the market situation, incorporating inflation and other factors to determine the right level of pay in each location. The aim is to offer fair and competitive compensation everywhere we have operations. That's our strategy, and so far, we have been successful.