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BMW's manufacturing arm also produces future leaders

BMW's manufacturing division not only builds great cars -- it also produces the company's future leaders.

With the appointment of Harald Krueger as CEO to succeed Norbert Reithofer, BMW builds on its tradition of appointing manufacturing experts from within the company to the top job.

BMW has also picked a relatively young executive who can steer the automaker for years to come.

Krueger is 49 and with BMW's mandatory retirement age set at 60, he could become the second-longest serving CEO in the company's history, beaten only by the 23-year tenure of Eberhard von Kuenheim from 1970 to 1993.

Reithofer is a former BMW production chief like Krueger. He will step up to BMW supervisory board chairman at the company's annual meeting on May 13, 2015, two weeks before turning 59, after a nine-year term as CEO. He will replace another former manufacturing boss, Joachim Milberg.

Why did BMW decide to make its succession plan known almost 18 months before the company needed to -- in May 2016 when Reithofer will become 60?

Probably to assure a smooth transition. Ten years ago, when then-CEO Helmut Panke was nearing his 60th birthday, he tried to win a contract extension, forcing the supervisory board to reiterate that BMW management board members should retire at 60.

This time the succession plan has been made public well in advance, avoiding any possible distraction from the company’s main goal: to defend -- and possibly strengthen -- its position as the world largest premium automaker.

Reithofer has kept BMW as the world's top-selling premium brand. Krueger's task will be to fight off strong challenges for the title from No. 2 Audi and No. 3 Mercedes-Benz, which was the global luxury leader until BMW passed it in 2005.

Krueger must also raise BMW's profit margin above Audi's. Reithofer has failed on that. Audi's latest published profit margin is 9.7 percent while BMW's is 9.4 percent.

You can reach Luca Ciferri at lciferri@crain.com

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