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BMW CEO Facing Biggest Challenge Ever

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Is his time limited?

Harald Krueger was appointed BMW CEO back in 2015, becoming the youngest leader of a major global automaker. Today, his job is on the line. Bloomberg reports that the BMW supervisory board is raising questions over Krueger's leadership, mainly about whether he's the right person to lead the German automaker as the industry begins a vast transformation period. Krueger's current tenure is due to expire at the end of next May, but reports are indicating it could be sooner. In fact, a decision will likely be announced on his future this June or July. Why is there a lack of confidence in Krueger?

For starters, BMW lost its top spot in 2016 as the world's best-selling luxury carmaker and it's struggled to regain that position ever since. On top of that, various global issues and trade tensions have put a further dent in profits.

And there's more thing: the board is concerned BMW is late to the game with electric vehicles, autonomous technologies, and various other future mobility technologies. "There are doubts about Krueger's perspectives as CEO of BMW - internally and externally," said Juergen Pieper, an analyst at Metzler Bank. "Results of the past four years are mixed, profitability is turning down quite substantially," and "there are no clear strategic signals."

Another problem Krueger has faced since the beginning of his tenure is uniting the board on plans for partnerships. For example, BMW and Daimler recently signed an agreement to form a 50-50 venture company to focus on mobility solutions to compete against the likes of Waymo.

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Some board members are not thrilled about deepening ties to this long-time competitor. Krueger also had some big shoes to fill following the retirement of his predecessor, Norbert Reithofer, who now serves as chairman.

Reithofer made some bold decisions during his tenure, such as signing off on BMW's crossover range while competitors failed to predict the segment's huge popularity today. He also embarked on BMW's initial electric car push, which led to the i3 and i8, as well as the huge investment in carbon fiber production. BMW, basically, had the early lead on battery-electrics but under Krueger, failed to keep that momentum going.

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