Industrials

Chris Bryant is a Bloomberg Gadfly columnist covering industrial companies. He previously worked for the Financial Times.

Are the robots going to take all the jobs? If automotive technology is your thing then it looks like yours is safe for now.

BMW's workforce expanded 4.4 percent over the past year to almost 123,000 employees, according to first quarter figures released on Tuesday.

March of the Humans
BMW's workforce expanded by 4 percent last year due to investments in new technologies
Source: BMW

BMW has been recruiting engineers and other experts as it seeks to keep pace with rapid change in digitalization, automated driving and mobility services.

BMW isn't the only German carmaker on a hiring and spending spree. Volkswagen's workforce expanded 3 percent to 610,000 last year while Daimler plans to hike R&D spending by 9 percent to an average of 7 billion euros ($8.1 billion) over the next two years.

This is great news for the wider economy, where there is a serious dearth of companies willing to invest and create jobs. But it's of more questionable benefit for auto sector investors.

In the short-term, spending depresses profits -- BMW's earnings before interest and taxation declined 2.5 percent in the three months to the end of March.

At the same time, the company's research and development expenses jumped 5 percent from a year earlier while hiring also boosted its selling and administrative expenses (these accounted for 9.5 percent of revenues in the period, compared to 9 percent last year).

Given the competitive threat posed by the likes of Apple, Google, Tesla and Uber, BMW and its rivals have little choice but to splash large sums on new technology and software engineers. 

Whether this spending will end up lifting margins is far from guaranteed, though. There's always the danger that it'll end up as yet another instance of the car industry consuming huge amounts of capital for modest returns. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Chris Bryant in Frankfurt at cbryant32@bloomberg.net

To contact the editor responsible for this story:
Jennifer Ryan at jryan13@bloomberg.net