Why even Paris Hilton couldn’t save the BMW boss
If BMW boss Harald Krueger has a flaw, it’s that he lacks confidence and isn’t much of a showman — criticisms that nobody has ever levelled at the heiress Paris Hilton.
BMW invited Hilton and a host of other “influencers” to Munich last week to help promote the company’s future lineup of electric and autonomous models, an area where BMW is perceived to have become a laggard (somewhat unfairly in my view).
If the aim of the visit was to show that the thoughtful, cautious Mr Krueger is as aggressive and ambitious as Tesla’s Elon Musk, it appears to have failed. Mr Krueger has confirmed that he wouldn’t be seeking a second term of office when his contract expires next year.
The news isn’t all that surprising and shouldn’t unsettle investors too much. Bloomberg News reported that the BMW chief’s future was in some doubt last month, and I wrote then about why Mr Krueger has struggled. There are several good internal candidates to succeed him, including development chief Klaus Froehlich and production director Oliver Zipse.
Still, Mr Krueger’s decision shows just how difficult it is for carmakers to keep their stakeholders happy at a time of unprecedented technological upheaval in the industry. His peers and rivals are unlikely to take much satisfaction from his premature exit.
BMW’s profitability and share price have lagged recently because of a cornucopia of challenges, most of which are beyond the CEO’s control. The company has been held back by global trade tensions, the demise of diesel, new carbon emissions regulations, and antitrust provisions.
During times like these, charisma can help convince employees and investors that a brighter future still lies ahead. Sadly, since fainting on stage in 2015, Mr Krueger has faced questions about whether he was up to the job.
The cautious design of some of BMW’s recent models cemented that timid impression.
While Mr Krueger has been compensated well, it’s hard to envy him. Carmakers that don’t invest enough in electric vehicles are panned for not being pioneering. Yet electric car projects still don’t make much money and heavy spending on them impairs cash flow. You can’t win in the eyes of shareholders.
It was hardly the case that Mr Krueger had his head in the sand: the collaboration between BMW and its great rival Daimler on mobility services and autonomous driving showed he was willing to take radical steps.
It wasn’t enough, but his successor won’t find things any easier.
- Bloomberg Opinion
