BMW News
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BMW News
Mercedes isn’t the only one with problems according to this Wall Street Journal article. There’s no mention of Quality issues!
BMW CEO Harald Krüger has been with the car maker for nearly three decades. PHOTO: TOBIAS HASE/ZUMA PRESS
By Sara Germano
Updated July 5, 2019 2:25 pm ET
BERLIN—The chief executive of BMW AG BMW -0.09% , Harald Krüger, plans to step down in the coming months, handing off to a yet-be-named successor as the German auto maker deals with shrinking profits and the expensive race to develop electric cars.
The Munich-based company said Friday that its supervisory board intends to announce a new chief executive following a July 18 meeting, a spokesman said, adding that the new CEO should be in place before Mr. Krüger’s contract ends in April 2020.
Friday’s announcement follows weeks of speculation, in local media and among analysts, that a possible management shift was afoot at the luxury-car car maker, which manufactures its namesake BMW brand as well as Mini and Rolls-Royce vehicles.
The company is grappling with a slowing global economy, flattening demand in its core markets and a volatile trade environment. Tougher emissions regulations are also driving huge investment at BMW and across the industry to develop electric vehicles, improve existing engines and phase out diesel.
Those factors were behind BMW issuing a profit warning in March, when it also flagged a large cost-cutting drive and an effective hiring freeze this year. In the most recent quarter, the company swung to a loss in its core auto business, weighed down by an accounting charge relating to potential fines from a European antitrust investigation.
In June, the supervisory board postponed a vote on whether to extend Mr. Krüger‘s contract after several board members refused to back him, according to a person familiar with the situation. The vote was due to be held at the scheduled meeting on July 18.
After nearly three decades at the car maker and more than four years as chief executive, the 53-year-old executive said Friday, “I now want to reorient myself professionally and improve my diverse international experience into new tasks and projects.”
Arndt Ellinghorst, head of global automotive research at Evercore ISI, said BMW will almost certainly opt for an internal selection as its new chief executive. He said top candidates for the post include current executive board members Klaus Fröhlich, 59, and Oliver Zipse, 55, the heads of development and production, respectively.
The announcement comes just days after BMW signed a formal partnership with rival Daimler AG to cooperate on the development of autonomous vehicles. The deal, first announced in February, seeks to better position the car makers to compete with tech giants likeAlphabet Inc.’s Google and Uber Technologies Inc. as they enter the automotive world.
BMW’s other challenges include the trade dispute between the U.S. and China, and the continued uncertainty over Brexit. The German luxury-car maker has increased investment and production in China, in part to lessen the effects of import tariffs. Meanwhile, Mr. Krüger told analysts in May that the auto maker is emphasizing flexibility in dealing with the U.K., which is the company’s fourth-largest market and a base for Mini production.
Struggling BMW Seeks New CEO to Turn Around Fortunes
The management change comes as BMW grapples with a slowing global economy and flattening demand in its core markets
BMW CEO Harald Krüger has been with the car maker for nearly three decades. PHOTO: TOBIAS HASE/ZUMA PRESS
By Sara Germano
Updated July 5, 2019 2:25 pm ET
BERLIN—The chief executive of BMW AG BMW -0.09% , Harald Krüger, plans to step down in the coming months, handing off to a yet-be-named successor as the German auto maker deals with shrinking profits and the expensive race to develop electric cars.
The Munich-based company said Friday that its supervisory board intends to announce a new chief executive following a July 18 meeting, a spokesman said, adding that the new CEO should be in place before Mr. Krüger’s contract ends in April 2020.
Friday’s announcement follows weeks of speculation, in local media and among analysts, that a possible management shift was afoot at the luxury-car car maker, which manufactures its namesake BMW brand as well as Mini and Rolls-Royce vehicles.
The company is grappling with a slowing global economy, flattening demand in its core markets and a volatile trade environment. Tougher emissions regulations are also driving huge investment at BMW and across the industry to develop electric vehicles, improve existing engines and phase out diesel.
Those factors were behind BMW issuing a profit warning in March, when it also flagged a large cost-cutting drive and an effective hiring freeze this year. In the most recent quarter, the company swung to a loss in its core auto business, weighed down by an accounting charge relating to potential fines from a European antitrust investigation.
In June, the supervisory board postponed a vote on whether to extend Mr. Krüger‘s contract after several board members refused to back him, according to a person familiar with the situation. The vote was due to be held at the scheduled meeting on July 18.
After nearly three decades at the car maker and more than four years as chief executive, the 53-year-old executive said Friday, “I now want to reorient myself professionally and improve my diverse international experience into new tasks and projects.”
Arndt Ellinghorst, head of global automotive research at Evercore ISI, said BMW will almost certainly opt for an internal selection as its new chief executive. He said top candidates for the post include current executive board members Klaus Fröhlich, 59, and Oliver Zipse, 55, the heads of development and production, respectively.
The announcement comes just days after BMW signed a formal partnership with rival Daimler AG to cooperate on the development of autonomous vehicles. The deal, first announced in February, seeks to better position the car makers to compete with tech giants likeAlphabet Inc.’s Google and Uber Technologies Inc. as they enter the automotive world.
BMW’s other challenges include the trade dispute between the U.S. and China, and the continued uncertainty over Brexit. The German luxury-car maker has increased investment and production in China, in part to lessen the effects of import tariffs. Meanwhile, Mr. Krüger told analysts in May that the auto maker is emphasizing flexibility in dealing with the U.K., which is the company’s fourth-largest market and a base for Mini production.
