The Hunt For BMW's New CEO Begins [UPDATE: That Was Fast!]
With Harald Krüger out, BMW needs a new CEO — one that can effectively transition the company into becoming and electrified automotive dreamscape. Krüger presumably wasn’t interested in taking that path. While that hardly makes him a monster, plenty of people felt that his reluctance to spend ludicrous amounts of money on developing EVs was tanking the company’s share price and making him look like a fool. Not us, though. Bending to investors every whim and chasing down trends with minimal foresight seems like top-tier dipshittery. But that’s the nature of the industry right now, for better or worse.
However, in the short term, it pays to promote electrification and Krüger’s measured strategy of gradually introducing more EVs via a flexible architecture was often seen as too conservative. Perhaps that’s the correct assertion and some new blood is in order at BMW if it’s to correct its course. But who do you pick?
Oliver Zipse, according to Reuters. BMW said Zipse’s manufacturing expertise would be a blessing and, as he’s already the board member responsible for production, his knowledge of the company’s inner workings are already vast.
Zipse has emerged as favorite because BMW’s efficient production network, which he expanded in Hungary, China and the United States, has helped the company deliver industry-leading profit margins despite its relatively small scale.
But experts say auto industry leaders also need other skills for the new era of software-driven electric and autonomous cars.
“A CEO needs to have an idea for how mobility will evolve in future. This goes far beyond optimizing an existing business,” said Carsten Breitfeld, chief executive of China-based ICONIQ motors, himself a former BMW engineer.
“He needs to be able to build teams, to attract key talent, and to promote a culture which is increasingly oriented along consumer electronics and internet dynamics.”
Being able to cope with shorter product cycles and new technologies, and a willingness to take bold decisions, are among the qualities needed, Breitfeld said.
Apparently, Krüger didn’t have those qualities… or did and simply backed away from electrification after BMW’s i3 proved to be a poor source of revenue. However, shying away from EVs had a chilling effect on engineers — sending some to rival manufacturers that were happier to focus on electrics. But suggestions that Krüger totally ignored the mobility shift are complete garbage.
BMW is among the first automakers to integrate Amazon’s Alexa directly into its multimedia system and has dabbled in some of the most aggressive connectivity features of any major manufacturer. It also recently said that every single one of its plug-in hybrid vehicles would have the ability to automatically switch to electric mode whenever it enters an area designated for “emissions-free driving” by 2020. BMW is even planing on introducing an app-based rewards points system that could pave the way for in-car micro-transactions. These aren’t exactly concepts we’re thrilled to see implemented into cars but they don’t represent a backwards-looking automaker.
Even though it did tamp down electrification plans, the company wasn’t ignoring EVs so much as trying to find a balance that would support more electrification further down the line (once the larger market is ready for them). “We can’t afford having two factories standing still,” Krüger said in 2018. “With a flexible approach, you can always manage the capacity of your plants. But if you have a specific EV architecture, what do you with the old one? What do you do with the people?”
That’ll be a question BMW’s next CEO will, no doubt, have to answer. But Reuters expects the broader issue has nothing to do with competing with rival manufacturers or keeping factories humming. It posited that BMW (and all automakers) need to find out how to become more than equipment suppliers for big tech. “Production expertise is important, but if you want to avoid ending up being a hardware provider for Google or Apple, you need to have the ability to move up the food chain into data and software,” a former BMW board member told the outlet, declining to be identified.
While continuously advancing software is incredibly important these days, it remains slightly bizarre that simply being a carmaker is no longer enough for — ahem — carmakers. The more time passes, the more they all seem to want to become Google. To us, that’s more than a little worrying. To investors, that’s the dream.
[Update 7/18/2019: Rather than narrowing the field, BMW’s supervisory board voted to give Zipse the CEO role during Thursday’s meeting in Spartanburg, South Carolina. He will take over August 16th, replacing Krüger, who will step down from the top job in August. The rest of the above still applies. Good luck, Zipsey!]
Brett Woods on Jul 19, 2019
I have been a big BMW fan over the years, so yes I'm concerned. Agree that chasing trends with minimal foresight is like having style, but not any substance. Reminds me of Heinlein's The Puppet Masters, where people had all the right moves and all the right looks, but they didn't succeed with those close to them because they only had puddle depth mentality. As the former BMW engineer says, real leaders go far beyond optimizing an existing business. In a time of worldwide change, top auto leadership can't be adequately or successfully managed by a sophisticated imitator wrapped in a tough shell and buoyed by self-love (my take on the product output). Those qualities, while incredibly useful, are just not enough to navigate the changing environment.
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