Per
Bloomberg
May 21, 2019
BMW AG Chief Executive Officer Harald Krueger’s job is hanging in the balance as the luxury carmaker steers through a fundamental shift toward electric and autonomous vehicles as well as weakening markets, people familiar with the discussions said.
Some supervisory board members are raising questions over whether he’s the right choice to lead the company and will discuss the CEO’s second-term prospects in the coming weeks, the people said, asking not to be identified discussing confidential deliberations. Krueger’s current tenure ends next May, with an announcement on his future due in June or July.
BMW, like other carmakers, is navigating a costly transition not only to electric cars but also new business models and deep-pocketed tech competitors encroaching via new mobility options like 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 will be chosen from inside the Munich-based carmaker, and production head Oliver Zipse, 55, is considered a possible successor, one of the people 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 in an email. “Results of the past four years are mixed, profitability is turning down quite substantially” and “there are no clear strategic signals.”
Board Tension
Krueger, 53, has been at the helm since 2015, when he became the youngest leader of a major automaker with a brief to tackle the industry’s transition. He is struggling to stamp his authority on a divided management board that’s failing to unite on plans for partnerships and spending on new technology, said the people.
While merging its car-sharing business with Daimler AG last year, BMW hasn’t so far aligned itself with new competitors. Daimler, Toyota Motor Corp. and Volvo Cars, meanwhile, have forged deals with Uber Technologies Inc., and Jaguar Land Rover will develop self-driving electric cars with Alphabet Inc.’s autonomous unit Waymo.
Efforts to deepen ties with Daimler have met resistance from some board members who are wary of new partnerships, the people said.
The last BMW CEO to leave after just a single term was Helmut Panke, who vacated the top position at BMW in 2006, a day before turning 60, at the time the proclaimed age limit for executives at the company. BMW’s largest shareholder are the Klatten-Quandt siblings, which together hold about 45% of the shares.
Krueger has struggled to emancipate himself from predecessor and now Chairman Norbert Reithofer, who is credited with taking some bold steps, like adding a range of sport utility vehicles at a time when other luxury carmakers skipped the segment.
Reithofer also moved early with BMW’s first electric car and a push into mass-producing lightweight carbon fiber. Krueger’s early tenure was overshadowed by him fainting on stage during his first major presentation as CEO at the 2015 Frankfurt motor show and obvious discomfort speaking publicly in the weeks and months that followed.
BMW squandered its early lead in electric cars after pausing new battery models since unveiling the slow-selling i3 in 2013. It now trails the electric SUVs of Jaguar, Audi and Mercedes already on sale.