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]
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