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Norbert Reithofer

BMW boss Dr Norbert Reithofer has to make the


ultimate driving machine greener, more profitable
while staying well ahead in the fast lane.
Profitability though is his number one priority. Can
he pull it off?
Dr Norbert Reithofer, 53, is an echt Bavarian Motor Works
(BMW) man. Hes travelled the distance from factory hand road
planner to chief exec. He has never strayed to rival makes such
as Audi or Mercedes. Hes a Munich boy through and through.
But does such unswerving loyalty to perhaps Germanys most
iconic car brand suggest a dull though powerful plodder? Or
does his track record reveal massive talent with the vision to

steer Germanys most successful luxury and performance car


group not just out of a global recession but also to help
consolidate its environmental credentials in an era where green
credentials are as equally important as raw speed and
superlative driving dynamics? Oh, and his job description also
includes keeping BMW hip and cool as well as well as
technologically ahead of the fast-improving Asian competition
(check out Hyundais latest Genesis model as an example of
how the Asian car industry is fast catching up). A formidable
brief. Reithofers track record however suggests hes got the
moxy to pull it off.
Ruthless when necessary
Reithofer joined BMW in 1987 and has worked from
maintenance planning to R&D to production. In September
2006 he took over from Helmut Panke as chairman and CEO.
Over his career he has managed to slash production time of
new models significantly without compromising build quality. He
is a ruthless rationaliser and willing to axe jobs last year he
slashed more than 8,000 at a stroke while depriving existing
workers of paid breaks and overtime bonuses. He recently cut
boardroom pay by 40 percent and many exec salaries by 30
percent. Reithofers salary is 600,000 but the overall package
is or was worth 3.75 million; that sum has been knocked
back substantially as earnings and sales have come under
pressure. Meanwhile, BMWs financial performance, in truly

terrible trading conditions, continues to surprise analysts. In


view of the difficult conditions still prevailing on the financial
markets, we remain focused in our efforts to improve our
liquidity position, said Reithofer in a terse statement recently.
The company generated free cashflow of 220 million in the
first quarter of 2009, a better result than many had been
expecting and Reithofer even expects conditions to improve
later this year.
Co-operation across the board
What has been truly extraordinary under Reithofers
stewardship though has been the amount of union support for
the tough decisions hes had to force through. German unions
are notoriously tough forces to keep onside, especially when
jobs are under threat. Much of this success is partly down to
Reithofers vision that any car maker wanting a future in the
21st century needs success that self-sustains and being able
to communicate that hard message to multiple audiences. Its
difficult, in the face of it, to argue with the numbers: total sales
of BMW, Mini and Rolls-Royce brand slumped 21 percent in
2009s first quarter year at 277,264 cars compared to 351,787
vehicles in the first quarter last year. So most at BMW appear
willing to pay the price necessary for the moment. Reithofer is
also prepared to shed some pride to pragmatism. Both BMW
and its arch adversary Daimler AG (and its subsidiary Mercedes)
could, it appears, co-develop some future models together in

an effort to slash costs. It looks increasingly likely that the


underpinning of the next generation Mini could be shared with
Mercedes next-gen A and B-Class cars. Questioned about the
proposed BMW/Daimler technical tie-up recently at the Geneva
show, BMW technical director Klaus Draeger told Autocar that
BMW was always looking for savings and efficiencies. Its not
the most conclusive statement of intent, but the fact Draeger
could utter such an acknowledgement speaks volumes for the
cost predicament these age-old rivals are locked in. The
German newspaper Der Spiegel has already suggested that the
two rivals could take a seven percent holding in each other.
Whether Reithofer will want to go that far remains to be seen.
Some suggest such a deal could be the thin edge of the wedge,
at least as far as Daimler is concerned. How convenient it would
be for Daimler to swallow BMW whole so it can get on with
fighting Porsche/Audi/VW and Lexus undistracted. But this is a
mega-merger too far, counter industry insiders, carrying
massive risk of brand dilution.
Hybrid hassle
Another pressure is powertrains: how far will Reithofer go down
the hybrid avenue a route synonymous with eco-friendliness
despite often supplying disappointing real-world fuel economy
especially as diesel and petrol engine technology continues to
improve, radically in some cases. Electric vehicle technology is
developing particularly for lighter sports cars and City cars

but BMWs Five and Seven Series range are also a long way
from being lightweights. We will be launching, Reithofer said
recently, the first megacity vehicle with a fully electric drive or
an ultra-efficient combustion engine by the first half of the next
decade. This vehicle will be part of a new family of extremely
low-emission vehicles. Of course, the idea of an electric RollsRoyce remains hugely attractive and not to be discounted in
the medium-term.
So, Reithofer has wide-ranging distractions ahead of him.
Getting a handle on what the economy needs remains tough. A
lack of visibility about earnings in the current climate makes it
difficult to anticipate future production pressures. Balancing the
costs of research and development costs in an effort to cut CO2
emissions is a finely judged decision, especially when profits
are concerned. Analysts still say BMW which at one point was
more profitable than Ford, VW and Renault combined now
struggles to earn profits proportionate to development costs.
Reithofer though, is well aware that returning BMW to real
shareholder profitability is his biggest challenge. Growing the
successful Mini brand into ever more variants is not the answer.
Nor are the Chinese or Indian markets on their own. Profits for
its premium priced cars is everything. Even in hair-shirt times
like 2009.
Three new important models en route

The long awaited Baby Roller the Rolls Royce Ghost with a
BMW-developed 6.6-litre turbocharged V12 engine. Likely to be
on sale by the end of the year. Prices are expected at about the
180,000 mark.
New Mini Colorado SUV with engine power ranging from
120bhp to 175bhp. Arriving 2010.
New BMW 1-series Cabrio plus next-generation 7-Series,
possibly hauling a hybrid powertrain.
Norbert Reithofer CV
Born: 29 May 1956 in Penzberg, Germany.
Education: University of Munich, Mechanical Engineering /
Marketing and Management plus a doctorate from the dame
university with Joachim Milberg.
Career: 1987 BMW: Head of Maintenance Planning, 1991
Director of the Body in White Production Division, 1994
Technical Director, BMW South Africa, 1997 President BMW
Manufacturing Corporation, 2006 Chairman of the Board and
CEO.
Notable Quote: Managers have to be role models and work
together.
After finishing his University he graduated in Mechanical Engineering at the Munich University of
Applied Sciences in Munich. He then moved on to the Technical University Munich to
study Production Engineering and Business Administration.

After graduation he became Research Assistant at the university at the Institute for Machine Tools
and Business Administration of Joachim Milberg, under whom he gained his Doctorate.
In 1987 he joined BMW as head of maintenance planning. From 1991 to 1994 he was Director of
the Body in White Production Division. From 1994 to 1997 Reithofer then became Technical Director
of BMW South Africa. From 1997 to 2000, Reithofer was President BMW Manufacturing Corporation
(USA), based in Spartanburg, South Carolina.
In March 2000 he returned to Munich to join the BMW Board of Management, responsible for
production.
In 2002, Reithofer and Development Chief Burkhard Goeschel halved the standard BMW time it took
to reach full production of the new generation E90 3 Series, from six months to three.
On 1 September 2006 he succeeded Helmut Panke as chairman of the board and CEO of BMW

BMW announced this morning that its current CEO, Dr. Norbert Reithofer, will step down on May 13,
2015, after the companys annual general meeting. Reithofer, who will be replaced by BMW insider
Harald Krueger, will remain with the company as chairman of the supervisory board pending the outcome
of a vote at the general meeting.
Reithofer, 58, joined BMW in 1987, serving as technical director for BMW South Africa and president of
BMW Manufacturing in South Carolina before ascending to the companys top post in 2006. Most
recently, Reithofer gave final approval of BMWs Project i, the high-tech skunkworks that developed the
lightweight, low-cost carbon-fiber composites and electric drivetrains that appear in the BMW i3 electric
runabout and i8 hybrid supercar.

As of today, Dr. Norbert Reithofer steps down as the BMW Group CEO and
becomes the Chairman of the Supervisory Board of BMW AG. Under
Reithofer, BMW Group has become the most successful manufacturer of
premium cars in the world and significantly expanded its lead over the chasing
automakers from Stuttgart and Ingolstadt.
In the almost nine years, from September 1, 2006 to May, 13 2015, the BMW
Group increased its worldwide sales from less than 1.4 to more than 2.1

million units. The companys sales grew in the same period from less than 50
to over 75 billion euros. In 2006, BMW had 15 different body styles, and in
2015 there will be no less than 27 models. MINI diversity increased from 2 to
8 variants, Rolls-Royce multiplied the body diversity from 2 to 5 variants.

The new i-models sales are symbolic for the BMW Group in 2015, but future
models and large-scale use of carbon fiber will be rolled out in the next few
years leading to new significant revenue streams for the brand.
Reithofer preferred to take a methodical, analytical approach, but he often
took risky decisions, one that comes to mind is the BMW cut production back
in 2009 before recession hit worldwide.

Reithofer, already the youngest CEO of a German car


manufacturer, has led BMW to record sales and earnings since taking
the top post in 2006.

He will remain known as one of the most successful CEOs BMW


has ever employed.

Dr. Ing. Norbert Reithofer (born 29 May 1956 in Penzberg, Germany) is a German businessman
and current CEO of BMW AG as well as Chairman of the Board of Management.
After graduating Abitur at the professional school in Munich, he started to study Mechanical Engineering
at the University of Munich, but changed to Marketing and Management. After graduation he became a
scientific co-worker at the university with fellow student Joachim Milberg, under whom he gained his
Doctorate.
In 1987 he joined BMW as head of maintenance planning. From 1991 to 1994 he was Director of the
Body in White Production Division, an internal department of BMW's R&D department. From 1994 to
1997 Reithofer then became Technical Director of BMW South Africa. From 1997 to 2000, Reithofer was
President BMW Manufacturing Corporation (USA), based in Spartanburg, South Carolina.
In March 2000 he returned to Munich to join the BMW Board of Management, responsible for production.

In 2002, Reithofer and Development Chief Burkhard Goeschel halved the standard BMW time it took to
reach full production of the new generation E90 3 Series, from six months to three.