Business - BMW standard switch too late to save jobs.
BMW is preparing to abandon the accounting standards which led it to declare Rover an unprofitable company and to lay off 2,400 staff, reports Chris Quick.
The move to international accounting standards by BMW will result in declare Rover an unprofitable company and to lay off 2,400 staff, writes Chris Quick. greater profitability for its beleaguered Rover subsidiary, but will probably come too late to save the jobs of workers facing redundancy.
BMW said this week it wanted to move to IAS as soon as possible, but was waiting for German regulatory restrictions to be lifted and the conclusion of talks between the International Accounting Standards Committee and the world stock markets body IOSCO.
The introduction of IAS to BMW’s international operations would significantly improve Rover Group’s profitability. Conservative German accounting rules on depreciation last year led to a #91m loss for Rover, while under British accounting rules, it would have made a profit of around #20m.
BMW says cuts are necessary at Rover’s Longbridge plant to halt the massive and increasing losses, and has demanded workers agree to 2,400 job losses by the end of this month.
A BMW spokesman said the move reflected the growing trend for multinationals to use IAS or US GAA. A spokesman for the Transport and General Workers Union, which is representing Rover workers, said: ‘We are aware of the accounting differences, but this is not an area we wish to get involved in.’