BMW has once again tapped its leadership playbook, appointing a new CEO with an operations and supply chain management grounding.

It is no secret that global automotive industry manufacturers are facing a series of transformational challenges relative to consumer’s growing desires for shared ride or autonomous driving options, environmentally conscious electric driving vehicles and greater levels on on-board electronics. The magnitude of such change is expansive, as well as expensive, driving many global brands to seek product platform development alliances and secure more software and digitally focused technical talent.

This week, German based luxury automaker BMW appointed Oliver Zipse to be the company’s new chief executive, assuming the reigns from Harald Krüger, who assumed his role in May 2015. Kruger and the company’s board mutually agreed to part ways on August 15.

According to reporting by The Wall Street Journal, “Krüger, decided not to seek a second five-year term in office, perhaps because his contract was at risk of not being renewed anyway after a marked deterioration in the company’s financial results and stock price.

At the time of his appointment in 2014, Harald Kruger was depicted as one of the youngest CEO’s of any major car maker at the time and signaled a “generational change” for BMW leadership.  Similar to the prior background of General Motors CEO Mary Barra, Krüger was an engineer by training, and his  previous background within BMW included roles within manufacturing, product planning and management as well as human resources.

Both of these executives came from senior operations and supply chain management leadership roles. Industry watchers thus view the latest CEO succession as a sign of stability in challenging times. He is portrayed in the German press as calm with the consensus-seeking—qualities previously associated with Mr. Krüger.

Mr. Zipse, a 28-year veteran has dedicated his entire career to BMW and is described by the chairperson of the global automaker’s Supervisory Board as a “decisive strategic and analytical leader.” He has served as senior leader of operations since 2015, has been a member of company’s operations committee, and provided engineering leadership experience as-well.

The automaker’s electric vehicle development strategy differs from other luxury auto makers in that it adds electric and hybrid powered options to existing platforms, rather than development of an entirely new EV platform. Along with other luxury automaker’s, BMW must compete with existing EV luxury brands such as Tesla, and at the same time, meet or exceed the strict emissions regulations emanating from major markets such as Europe and China. The European Commission recently accused BMW Daimler and Volkswagen of colluding to prevent competition in emissions technology. BMW denies the allegation. Existing global automakers have sought out strategic partners to share the cost of expensive EV platform development including staffing of technical talent.

Supply Chain Matters views this appointment from two perspectives.

Once again it is great to observe that those who served under the umbrella of supply chain management, manufacturing or product management operations can once again have a path for becoming CEO. On the other hand, similar to Mr. Krüger, Mr. Zipse faces similar and perhaps more far reaching corporate challenges that likely span beyond just consensus management, but bold leadership in a number of dimensions, including product design, management, and overall sales and profitability growth.

 

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