Why Panke was replaced - rumours

[EnI]

Why Did Helmut Go?

Speculation abound as Panke is replaced as CEO of BMW

By AUTOMOTIVE NEWS

AutoWeek | Published 07/25/06, 4:55 pm et

Why is BMW replacing Helmut Panke, the company's CEO since 2002, with soft-spoken manufacturing whiz Norbert Reithofer?

Officially, because Panke turns 60 on Aug. 31, reaching the company's mandatory retirement age. But BMW has bent that rule before, notably for longtime boss Eberhard von Kuenheim.

Here is what German analysts and newspapers say are the reasons Panke will be replaced Sept. 1:

Although he has boosted sales and revenues, BMW's operating profit has not grown proportionately.

BMW's supervisory board wants an engineer as CEO, to focus on improving quality and introducing more niche models. Panke is BMW's former CFO.

Panke has angered members of BMW's controlling Quandt family by publicly lobbying to keep his job beyond the retirement age.

BMW's handling of Panke's pending exit upset Munich's daily newspaper. "Panke did not deserve such a hasty farewell," the Sueddeutsche Zeitung wrote last week.

The company is indeed the world's third-most-profitable carmaker. Earnings as a percentage of revenue in 2005, before interest and taxes, were 8.1 percent. That compares with Porsche's 17.3 percent and Toyota's 8.9 percent, according to HypoVereinsbank of Munich.

But critics say that's not good enough. They also say Panke didn't move fast enough to expand the product lineup. New cars introduced in recent years -- such as the X3 and the 1 and 6 series -- were all developed under a previous regime.

Panke had hoped to stay longer.

"I would stay," he told reporters in April. "But the decision is up to the supervisory board."

Panke noted that von Kuenheim served until he was 63. In today's world, Panke said, "60 is not old."

Complete article: AutoWeek

 

[Imhotep Evil]

I think most of this is just BS.

 

[Giannis]

This might be pure BS, or the truth behind Panke's replacement. The only problem is that we will never know what happend unless Eni has some real good info. Anyway, i did a small search about von Kuenheim:

Eberhard von Kuenheim, 75, turned BMW from a small Bavarian manufacturer into a global player.

BMW had 23,000 employees when he became CEO in 1970. The number had risen to 71,000 when he stepped down in 1993. The luxury German automaker employs about 100,000 people today. BMW's annual revenue rose during von Kuenheim's 23-year tenure to E15 billion from E880 million.

In the 1950s and 1960s, BMW produced vehicles in very diverse segments, from the tiny 250cc one-door Isetta to the high-end V-8 507 sports car.

Von Kuenheim redirected BMW's focus toward building only high-quality products.

"We did not even know the term ‘premium' back then, but it describes our approach," von Kuenheim says. "We needed to grow without becoming a mass producer. And we wanted to be among the best."

A vehicle that showcases that dedication was the BMW 750iL, which arrived on the market in 1987.

"We prompted the comeback of the 12-cylinder engine in the industry," von Kuenheim says. "It was a strategic highlight."

Once when asked if BMW needed to form strategic partnerships, von Kuenheim famously said: "At great altitude, the eagle prefers to fly alone."

Born in 1928 to Prussian nobility, von Kuenheim is a veteran of World War II. He studied engineering in Stuttgart after the war.

In 1965, he joined the Quandt Gruppe, BMW's largest shareholder since 1959. He was named CEO of BMW five years later at age 41.

"I was never promoted after I joined the company," he jokes.

Von Kuenheim is reluctant to call himself or any other auto executive a great visionary.

"Strategic decisions are never one man's decision," he says. "There is a chain of decisions, and the strategy is the sum of them. The important thing is to get up and act a bit earlier than others."

Von Kuenheim also advises that even as a CEO, one must pay attention to day-to-day activities. "You have to know what is going on in the company." He brought a spirit of emotional attachment and dedication to the company.

After leaving his CEO post, von Kuenheim guided BMW's supervisory board until 1999. Today he leads the Eberhard von Kuenheim Foundation, which promotes entrepreneurial thinking and awareness.

His former employer provides him with a personal BMW. His favorite? "I enjoy the 530d," he said. "It's a real dream car."

 

[EnI]

This might be pure BS, or the truth behind Panke's replacement. The only problem is that we will never know what happend unless Eni has some real good info.

No, I have no additional info. There are no internal rumours - except Herr Krause is still a Quandt's favourite for the (next) CEO (he will turn 53 when Reithofer turns 60).

Still ...

I'm eager to see whether Panke will be offered a seat in a Supervisory board - as a reward. If not that could mean his replacement was a "punishment". Both - von Kuhnheim & Milberg - were offered a Supervisory board after ending CEO function.

Why Reithofer? One of the key factors for BMW success is a flexible manufacturing. And Reithofer is a "father" of the BMW manufacturing system. And just before another product expansion (2er, X6, V5, Z8, V3, possible Z2, X4, 4dr coupe etc) and further market / manufacturing expansion (mainly Asia) the Supervisory board wants a CEO who has expertise in manufacturing: to get all the future deals right. Panke was for of an financial "engineer", than a manufacturing or development one - so he mostly pay attention to financial & marketing aspects. Now the new CEO will bring engineering point of view again: even better cars built at less costs (parts sharing, flexible production, innovative materials), while Krause & Ganal will steer the financial & marketing operations as they have done before.

What is more important - 2 new BoD members are coming: Herr Arndt (Dingolfing plant boss) & Herr Draeger (big vehicle line development boss). What that means? Even more emphasize on technological advances, hi-tech, innovative solutions, progressive design etc.

But one Panke's rule will stay there: "BMW will never produce a boring car again!"


Regarding von Kuenheim: in his case the "rule 60" was broken: he left the CEO position at age 63! Also under his lead the plan BMW to become worlds biggest premium car maker has emerged. But the plan how to realize that was the point of arguing: the line under Reitzle (and later Pischetsrieder) wanted to acquire Porsche, Land Rover, MINI, Rolls-Royce & Bentley, while von Kuenheim wanted BMW to grow organically (based on BMW brand only). It appeared Porsche was to expensive to buy (also Piech opposed very much), Rolls-Royce talks were long and complicated (in the end VAG outbid BMW AG), to get LR & MINI BMW AG had to buy all Rover Group: a cardinal mistake! Because of that mistake a majority of BoD had to go: including CEO Pischetsrieder & development boss Reitzle).

 

[EnI]

Another aspect - which is definitely an important factor - we are forgetting:

The Quandt's do not like too cocky personalities who take advantage of the company to promote their own egos. And the wings of Herr Panke have grown a bit too large in the last years.

It's not the first time time the Quandt's fired top managers in their companies (they own several companies beside BMW) due to vanity.

It is well known they like low-profile managers. Something like a CEO in an ad for BMW (Zetche for DCX!!!) will never happen.

The most respected CEOs were definitely Herr von Kuenheim & Prof. Milberg - and they were rewarded with a seat in Supervisory board. Panke will definitely won't be offered one - I'm sure.

Poor Herr Goeschel I guess was a scape goat here - his contract wasn't extended because Panke had to go. It would be suspicious that Goeschel's contract would be extended, while Panke's wouldn't. So they both are gone.

Riethofer is definitely low profile manager, and we all can hope he will stay so - if he wants to keep the CEO position. But there are though times for BMW ahead: competition is getting stronger. MB is recovering quickly, Audi is speeding with speed of light, Lexus is getting stronger, new competition coming to traditional markets (Lexus, Infiniti). Also the costs are the problem - so raising the efficiency will be the main target. More parts sharing, more modular approach, more flexible production, etc. But we will definitely see a continuity in BMW business policy. New models are still on agenda but now the profitability will come first - not the sales numbers.

Time will tell what will happen ...

 

[Imhotep Evil]

Another aspect - which is definitely an important factor - we are forgetting:

The Quandt's do not like too cocky personalities who take advantage of the company to promote their own egos. And the wings of Herr Panke have grown a bit too large in the last years.

It's not the first time time the Quandt's fired top managers in their companies (they own several companies beside BMW) due to vanity.

It is well known they like low-profile managers. Something like a CEO in an ad for BMW (Zetche for DCX!!!) will never happen.

The most respected CEOs were definitely Herr von Kuenheim & Prof. Milberg - and they were rewarded with a seat in Supervisory board. Panke will definitely won't be offered one - I'm sure.

Poor Herr Goeschel I guess was a scape goat here - his contract wasn't extended because Panke had to go. It would be suspicious that Goeschel's contract would be extended, while Panke's wouldn't. So they both are gone.

Riethofer is definitely low profile manager, and we all can hope he will stay so - if he wants to keep the CEO position. But there are though times for BMW ahead: competition is getting stronger. MB is recovering quickly, Audi is speeding with speed of light, Lexus is getting stronger, new competition coming to traditional markets (Lexus, Infiniti). Also the costs are the problem - so raising the efficiency will be the main target. More parts sharing, more modular approach, more flexible production, etc. But we will definitely see a continuity in BMW business policy. New models are still on agenda but now the profitability will come first - not the sales numbers.

Time will tell what will happen ...

Jesus. this looks like twilight zone, I mean Dr. Panke to cocky !?!?!