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BMW CEO's future in doubt as tensions erupt on tackling shift to EVs
BMW AG chief executive officer Harald Krueger's job is hanging in the balance as the luxury carmaker steers towards a future of electric and autonomous vehicles and navigates weakening markets, people familiar with the discussions said.
Some supervisory board members are questioning whether he is the right choice to lead the company, and will discuss the CEO's prospects for a second term in the coming weeks, the sources said, asking not to be identified in discussing confidential deliberations. Mr Krueger's current tenure ends next May, with an announcement on his future due in June or July. The shares rose 0.3 per cent at the start of trading on Wednesday in Frankfurt.
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 will be chosen from inside the Munich-based carmaker, and production head Oliver Zipse, 55, is considered a possible successor, one of the sources 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 quite substantially" and "there are no clear strategic signals".
Mr Krueger, 53, has been at the helm since 2015, when he became the youngest leader of a major carmaker and was tasked with leading BMW through 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, the sources said.
While BMW merged its car-sharing business with Daimler AG last year, it has not otherwise aligned with new competitors thus far. Daimler, Toyota Motor Corp and Volvo Cars, meanwhile, have forged partnerships with Uber Technologies Inc, while Jaguar Land Rover is teaming up on self-driving electric cars with Alphabet Inc's autonomous vehicle unit Waymo.
"BMW is a case of strong brand and strong capability, but they have stuttered in their commitment to a direction 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 have run into resistance from some board members who are wary of new partnerships, the sources said.
The last BMW CEO to leave after just a single 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, which together hold about 45 per cent of the shares.
Mr Krueger has struggled to emancipate himself from his predecessor and BMW's current chairman Norbert Reithofer, who is credited with taking some bold steps such as adding a range of sport utility vehicles at a time when other luxury carmakers neglected the segment. BLOOMBERG