BMW chief doubts rule of executive road: Retire at 60 Mark Landler | The New York Times | July 24, 2006
http://www.iht.com/articles/2006/07/24/business/bmw.php Helmut Panke of BMW is one of the most successful auto chief executives in Europe. As of Sept. 1, he will be a retired chief executive - the date clearly not of his choosing. On Monday, as Panke introduced his successor, Norbert Reithofer, to journalists here, he suggested that BMW's mandatory retirement age of 60 for senior executives had become outmoded. "The German mentality used to be that we should lower the retirement age to open up jobs," Panke said. "The political discussion has begun about raising the retirement age. This will inevitably enter the corporate sector. It will raise the question of whether the 60- year rule makes sense." Panke said that he did not contest the rule because it applies throughout BMW, formally Bayerische Motoren Werke, to people in nonmanufacturing jobs. Other executives said that he did not lobby for a contract extension. Even if he had, the Quandt family, which controls this stylish carmaker, would not have agreed. But Panke, who turns 60 on Aug. 31, is raising an issue that resonates beyond the privileged corridors of corporate Germany. The German government plans to lift the age at which people are eligible for retirement benefits to 67 from 65 - to draw more people into the work force and to reduce social costs. Bertelsmann, the media conglomerate, waived its retirement age of 60 for Gunter Thielen, who was 59 in July 2002, when he succeeded Thomas Middelhoff. Thielen is expected to retire next year. In BMW's case, Panke had only been at the helm for four years - a period in which the company, based in Munich, expanded into China, diversified with its hip Mini brand, earned record profits and overtook Mercedes-Benz as the world's largest luxury carmaker on a volume basis. "It's fun for me," Panke said, when he was asked if he would like to stay on. "I like being the captain of the ship." The 60-year rule is claiming another respected member of BMW's management board, Burkhard Göschel, who oversees development and purchasing and is also retiring this year. In 2008, a third board member, Ernst Baumann, who heads human resources, will turn 60. Losing three of the six members of BMW's management board within two years raises an issue of "continuity," Panke said. But Reithofer, who is 50 and the head of production for BMW, has been a board member for six years, working closely with the chief executive from the start of his tenure. For all the respect Panke commands, analysts expressed few qualms about the management change. "BMW wants to be sporty, the brand that anticipates tomorrow's technology today," said Ferdinand Dudenhöffer, director of the Center for Automotive Research in Gelsenkirchen. "To do that, you don't want your key executives to be elder statesmen." He added that no single executive dominates BMW like Carlos Ghosn at Renault or Wendelin Wiedeking at Porsche. BMW's chief financial officer, Stefan Krause, and the head of marketing, Michael Ganal, have strong profiles outside the company, and were viewed as potential successors to Panke. Reithofer's reputation rests on his management of BMW's global production network, which is considered one of the most flexible and efficient in the industry. He ran an assembly plant in South Africa, as well as BMW's plant in Spartanburg, South Carolina. And he oversaw the building of a factory in the eastern German city of Leipzig, which turns out BMW's popular 3-Series. "The production world is fine-tuned at BMW, but they could be more flexible in design," Dudenhöffer of the automotive research center said. "Reithofer can bring more flexibility into designing and engineering the cars." A buttoned-down engineer, Reithofer is a contrast to the ebullient Panke. He turned aside questions about BMW's competitors, and seemed ill at ease when asked about his summer vacation plans. But Reithofer spoke confidently about BMW's goals. The carmaker intends to increase production in the United States - a strategy that would allow it to hedge against the rise in the euro versus the dollar. He said he could envision BMW increasing the capacity of the Spartanburg plant to 200,000 cars a year from 140,000 cars a year, though he did not give a timetable. "We see room for improvement in the U.S. market," Reithofer said. "It's the largest market in the world." -- This is ZESTGlobal. Post articles on international affairs to [email protected] If you got this mail as a forward, subscribe to ZESTGlobal by sending a blank mail to [EMAIL PROTECTED] OR, if you have a Yahoo! ID, by visiting http://groups.yahoo.com/group/ZESTGlobal/join/ Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/ZESTGlobal/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
