Here is interesting article that ran recently. Maybe, it might shed some light on the model cutbacks.Works council: Downturn hurting BMWHenning Krogh Automobilwoche August 25, 2008 11:29 CET MUNICH -- BMW is in worse shape than the company is acknowledging publicly, according to the head of the automaker's works council.'Since new cars have been selling sluggishly and with difficulty in recent months, inventories at dealerships have increased tremendously,' the chairman, Manfred Schoch, said at a recent company meeting in Munich. 'With a further rise in inventories, one would expect that about 10 percent of dealers would head into insolvency.'Schoch, who also sits on BMW's supervisory board, did not specify whether he meant 10 percent of BMW dealers worldwide, in Europe or only in Germany. According to the works council's own data, BMW's year-to-date sales are off 8 percent in the U.S., 13 percent in South Africa and 14 percent in Japan compared to the same period a year earlier, Schoch said.'The vehicles that we produce in Munich, namely the 3 series sedan and wagon, have been hit especially hard by declining sales,' Schoch said. But BMW also is concerned by falling sales for other high-volume models, he asserted. Sales of the 5 series are running '5,000 units below target,' while sales of the X3 SUV are 10,000 units under plan, he said.BMW's executive committee has decided to cut production In a bid to better balance production and sales, he said, BMW will trim output for the balance of the year. At a recent 'crisis meeting' of senior BMW executives in Munich, cuts were allocated by plant and model, he said. 'As our share in Munich, we were hit with a cutback of roughly 3,000 units,' Schoch said. But an extension of the summer shutdown was rejected because a production start for the face-lifted 3 series right after the break was considered essential. 'We can't reach the market late with it,' Schoch said.BMW also considered reducing working hours but ruled out that option because of legal and contractual reasons, he said. Instead, workers agreed to reduce the target for time bank hours to 50 hours from 90 hours.The Working Time Account allows workers to bank full-salary hours that can be used when they are sent home because of temporary production cuts. Additionally, they can go into deficit but must later pay borrowed hours back to BMW.Schoch also said BMW workers have settled on a wage demand of 7.9 percent for their next contract, which has to be negotiated this fall.