BMW Chief Norbert Reithofer to Step Down Earlier Than Expected
By JACK EWING
FRANKFURT — BMW said on Tuesday that Norbert Reithofer would step down in May as chief executive of the German luxury carmaker a year earlier than expected, and that he would be replaced by Harald Krüger, the head of production.
Mr. Reithofer, 58, who oversaw a push into lower price categories for BMW and the introduction of a line of electric cars, will probably become chairman of the supervisory board and thus remain a powerful, if less visible, force in the company’s management.
Like Mr. Reithofer, Mr. Krüger, who is 49, has spent his career at BMW, which is based in Munich. Mr. Krüger has served in a variety of positions, as has Mr. Reithofer, that give him broad experience with company operations.
Mr. Krüger has been the head of personnel, the head of sales for the Mini and Rolls-Royce brands, and the manager of a BMW engine factory in Hams Hall, near Birmingham, England. In the 1990s, he was an engineer involved in the construction of the BMW factory in Spartanburg, S.C. He has been a member of BMW’s management board since 2008.
Mr. Krüger also continues a tradition at BMW and at other carmakers of placing in the top post engineers who have experience in other disciplines. Mr. Krüger studied in Germany at technical colleges in Braunschweig and in Aachen, earning a degree in mechanical engineering. He joined BMW as a trainee in 1992.
“He has worked in a lot of different positions and knows the company very well,” said Ferdinand Dudenhöffer, a professor at the University of Duisburg-Essen. “That’s typical BMW.”
Mr. Krüger has attended conferences organized by the university, Mr. Dudenhöffer said, and came across as likable and down to earth. “As we say in Germany, he’s someone you can drink a beer with,” Mr. Dudenhöffer said.
Joachim Milberg, a former BMW chief executive who is regarded as Mr. Reithofer’s mentor, will resign as chairman of the supervisory board to allow Mr. Reithofer to be considered for the post. Mr. Reithofer must be elected by other members of the board, but that is considered a formality.
“The BMW Group plans to maintain its leading role in the premium segment,” Mr. Milberg said in a statement. “To achieve this, we have to hand over responsibility to the next generation at an appropriate time.”
Mr. Reithofer has generally been held in high esteem in the industry. He foresaw the effect that the financial crisis in 2008 would have on sales and cut back production in time largely to avoid the losses suffered by competitors including the Mercedes-Benz division of Daimler.
With the Mini brand and 1 Series cars, BMW effectively invented the luxury small-car segment. Under Mr. Reithofer, BMW greatly expanded both brand lines and fared better than most rivals after the European market for lower-priced cars began to plunge in 2009.
BMW car sales have risen from less than 1.4 million when Mr. Reithofer took over in 2006 and are expected to top two million this year.
However, BMW’s net profit dipped in the third quarter, falling 1 percent to 1.3 billion euros, or about $1.6 billion, because of higher taxes and the effect of currency fluctuations.
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Mr. Reithofer also oversaw the development and unveiling of the BMW i3, a battery-powered car with a body made largely of carbon fiber and aluminum. The car won praise for its unconventional design, but sales so far have been modest.
Sales of the i3 and i8, a plug-in hybrid sports coupe, amounted to only about 10,500 in the first nine months of 2014, the first year the cars were on sale worldwide.
But Mr. Dudenhöffer said he did not think that the early sales figures would discourage BMW from continuing to expand the i Series model line.
“It’s always a risk to do something new,” Mr. Dudenhöffer said. “But I am sure that they will have more rather than fewer i models.”
As chairman of the supervisory board, Mr. Reithofer would continue to exert considerable power behind the scenes.
In German corporations, the supervisory board approves major strategic decisions and appoints the top managers, while the management board is responsible for day-to-day operations. In line with German corporate law, half of the members of the supervisory board are worker representatives.
BMW also said on Tuesday that its supervisory board had named Klaus Fröhlich to the management board as head of development. Mr. Fröhlich, 54, had been in charge of small and midsize cars at BMW. He replaces Herbert Diess, who BMW said “has left the company of his own accord.”
