BMW AG chief executive officer (CEO) Harald Krueger’s job is hanging in the balance as the luxury carmaker steers toward a future of electric and autonomous vehicles and navigates weakening markets, people familiar with the discussions said.
BMW, like other carmakers, is making a costly transition to electric cars and new business models and is confronting deep-pocketed tech competitors encroaching with new mobility options, including ride hailing. After leading the luxury competition for a decade, BMW’s momentum petered out in 2016 and the carmaker has since struggled to regain the top spot with cautious model redesigns. Since last year, weaker global markets and trade tensions have shrunk profits.
Any new CEO would be chosen from inside the Munich-based carmaker, and production head Oliver Zipse, 55, was considered a possible successor, one of the persons familiar with the issue said. A BMW spokesman declined to comment on CEO succession plans.
“There are doubts about Kreuger’s perspectives as CEO of BMW — internally and externally,” Juergen Pieper, an analyst at Metzler Bank, said. “Results of the past four years are mixed, profitability is turning down substantially” and “there are no clear strategic signals”.
Krueger, 53, has been at the helm since 2015, when he became the youngest leader of a major automaker and was tasked with leading BMW through the industry’s transition.
He had been struggling to stamp his authority on a divided management board that was failing to unite on plans for partnerships and spending on new technology, the informers said.
While BMW merged its car-sharing business with Daimler AG last year, it has not otherwise aligned with new competitors thus far. Daimler AG, Toyota Motor Corporation and Volvo Cars, meanwhile, have forged partnerships with Uber Technologies Incorporated, while Jaguar Land Rover Automotive PLC is teaming up on self-driving electric cars with Alphabet Incorporated’s autonomous-vehicle unit Waymo.
“BMW is a case of strong brand and strong capability, but it has stuttered in its commitment toadirection in an industry in transition,” said Bill Russo, CEO of Shanghai-based consultancy Automobility Ltd. “Several of BMW’s competitors are moving more rapidly and aggressively in forming partnerships with tech players in the Internet of mobility era.”
Efforts to deepen ties with Daimler had run into resistance from board members who were wary of new partnerships, the informers added.
The last BMW CEO to leave after justasingle term was Helmut Panke, who vacated the top position at BMW in 2006. He left a day before turning 60, which at the time was the proclaimed age limit for executives at the company. BMW’s largest shareholder are the Klatten-Quandt siblings, who together hold about 45 per cent of the shares.
Krueger has struggled to emancipate himself from his predecessor and BMW’s current chairman Norbert Reithofer, who is credited with taking bold steps such as adding a range of sport utility vehicles (SUV) at a time when other luxury carmakers neglected the segment.
Reithofer also moved early with BMW’s first electric car and a push into mass-producing lightweight carbon fiber. Early in Krueger’s tenure, he fainted on stage during his first major presentation as CEO at the 2015 Frankfurt motor show and demonstrated obvious discomfort with speaking publicly in the weeks and months that followed.
BMW squandered its early lead in electric cars by pausing new batterypowered models after unveiling the slow-selling BMW i3 in 2013. It now trails the electric SUVs of Jaguar, Audi and Mercedes already on sale. --Bloomberg