BMW's designated CEO Krueger will usher in new era at automaker
MUNICH (Bloomberg) -- BMW Group's designated CEO Harald Krueger introduced the new 2-series Active Tourer last summer by riding it up a ski-lift slope in the Austrian Alps. When he reached the waiting crowd, fog at the 2,165-meter (7,100 feet) elevation was too thick to see much of the car or the floppy-haired executive. Krueger was unfazed, presenting the compact minivan as calmly as if he were on the Frankfurt auto show floor.
There have been few hiccups during the 49-year-old manager's career at BMW, where he started almost straight out of Aachen University, Germany's top-ranked graduate engineering school.
"He's known internally at BMW as a straight shooter, a good motivator and a good speaker who commands respect from the people he works with," said Arndt Ellinghorst, a London-based analyst at Evercore ISI. Krueger has a reputation for "looking beyond the usual production and engineering topics," Ellinghorst said.
Krueger's appointment as BMW's new chief will make him the youngest CEO of a major carmaker when he succeeds Norbert Reithofer after the automaker's annual shareholder meeting in May. The automaker billed the switch, which came earlier than expected, as its response to far-reaching changes in the auto industry. Carmakers need a younger generation with "creative energy," said Stefan Quandt, deputy supervisory board chairman and a member of the billionaire family that controls about 47 percent of BMW's voting stock.
Krueger follows a CEO who has already made sweeping strategic changes. Reithofer spearheaded BMW”s shift to more environmentally friendly cars, including the battery-powered i3 city car and the plug-in i8 supercar, and made a gamble by investing in mass production of lightweight carbon-fiber parts.
Reithofer did that while steering BMW to record sales and earnings since taking the top post in 2006. Under Reithofer, BMW was responding to increasingly strict emissions rules. There were also geographic changes as Asia became the leading region for sales growth, while shifting social values have made car ownership less of a rite of passage among young people.
Krueger has been involved in projects addressing these challenges almost since he started at BMW in 1992. One of his first big assignments was as a project engineer to help set up the German company's U.S. plant in Spartanburg, South Carolina. At the time, building a competitive car factory in the U.S. was a challenge for a company known for quality and precision.
By 2016, Spartanburg will be BMW's biggest plant, and the company will have poured $7.3 billion into the site with the latest expansion, boosting capacity to 450,000 cars a year.
"At the time, we thought 100,000 was a big number," Krueger said earlier this year, noting the plant had a 1994 target of producing 50,000 cars. "If you look back, you realize how important this step turned out to be."
Following a successful three-year period leading BMW's engine factory in the UK, the engineer in 2008 joined the management board to head personnel for four years. Short stints as head of the Mini, Rolls-Royce and motorcycle brands and as head of production followed, typical for executives being groomed inside BMW.
His appointment as production chief, during which BMW launched both the i3 and i8, was a clear sign that he was a top candidate to succeed Reithofer, who had headed manufacturing before his own appointment as CEO.
"His comparatively young age is remarkable. Assuming he doesn't make mistakes, he will start a new era for BMW," said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences in Bergisch Gladbach, Germany. "That's interesting also because of the paradigm shift that we're seeing with powertrains, connectivity and business models."
As CEO, Krueger will be younger than industry counterparts such as Mary Barra, 52, at General Motors Co.; Mark Fields, 53, at Ford Motor Co.; and Carlos Ghosn, 60, who runs Renault and Nissan Motor Corp.
At a BMW event in Berlin last month on the future of driving and vehicle production, Krueger was already speaking on topics far outside production. He touted automated production with a robot named Olaf, but he also talked about BMW's cars parking themselves and called for a broad European framework for in-car Internet connectivity. And when an official from the German Economy Ministry mistakenly referred to BMW as Mercedes, Krueger's expression barely changed: no annoyance, no surprise. Just as in the Alpine fog, he was unflappable.
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