BMW SA is selling its motor leather processing plants because the sewing of leather components is not the core function of the company.
BMW SA is selling its motor leather plants because the sewing of leather components is not the core function of the company.
BMW has agreed in principle to sell SA Trim to the Automotive Leather Company, and Midlands Trim will go to Aunde SA, which is a subsidiary of Aunde in Germany. The sales are subject to Competition Commission approval and some elements of the agreement still need to be negotiated. BMW did not disclose how much the leather plants would be sold for.
Spokesman Richard Carter said making cars was BMW’s core business, not sewing leather components. He said that BMW had been looking at its leather sourcing strategy globally. It has become a very competitive business, which resulted in the decision to sell that side of the operation.
Carter told CARtoday.com that BMW already had sizable contracts with the two companies and would continue to buy automotive leather from them for the next two years, after which “sourcing would be done on a globally competitive basis”.
According to Business Report, the employees at the two factories would be transferred to the new owners on terms no less favourable than they had at BMW.
He said that BMW had spent great time and effort building up the SA plants to make them globally competitive. “They are almost at that point and it would be OK to sell now as they can stand on their own feet, especially with the support of ALC and Aunde,” Carter said.
