BMW CEO Harald Krger Overshadowed By Predecessor's Success

Cameron Aubernon
by Cameron Aubernon

As BMW AG’s newest CEO, Harald Krüger’s main challenge is to helm the company in the shadow of newly appointed chairman and former CEO, Norbert Reithofer.

The concern comes amid Reithofer taking his place as the company’s chairman — succeeding Joachim Milberg in the role — without first stepping away from the company for two years as recommended by the German Corporate Governance Code, Bloomberg reports. The move leaves Krüger little room to move BMW toward his vision, especially as the industry itself is undergoing significant changes.

Krüger is also taking over as CEO at a time when the company’s fortunes in China are turning for the worst, following the nation’s own economic slowdown delivering a slump in profits for BMW’s joint venture during Q1 2015. Additionally, the new CEO will have to determine where to take Reithofer’s previous projects — mass-produced carbon fiber, i Series et al — especially when it comes to cost.

Finally, Krüger will be in charge of an automaker whose sales were boosted 55 percent from 1.4 million to 2.1 million vehicles annually, with an improved pretax margin of 9.2 percent from the 6.3 percent margin in 2006 when Reithofer became CEO. Bankhaus Metzler analyst Juergen Pieper said Krüger will have a tough act to follow with the new chairman, especially as Reithofer moves into his new role without delay, a move supported by majority shareholders the Quandt family.

[Photo credit: BMW]

Cameron Aubernon
Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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 4 comments
  • Ellomdian Ellomdian on May 13, 2015

    Hey, at least they have different last names. The governance over at VW looks like an Alabama family reunion - everyone has the same name, and they're all fucking each other...

    • Krhodes1 Krhodes1 on May 13, 2015

      Well, technically they all have one of TWO last names, but they are one big unhappy family.

  • Spartan Spartan on May 13, 2015

    9.2% pre-tax margin? And they were running at 6.3% prior to that? No wonder they price options the way they do. BMW isn't exactly printing money.

    • Lorenzo Lorenzo on May 13, 2015

      With about $100 billion in sales worldwide, a $9.2 billion pre-tax profit is nothing to sneeze at. Fiat-Chrysler had a pre-tax profit of $3.5 billion on $110 Billion in revenue. If you take into account BMW's project development expenses for new models are likely far bigger than FCA's, reducing the profit margin, the 9.2% figure is even more impressive, both for the present and the future.

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