MUNICH - The ouster late last week of BMW AG CEO Bernd Pischetsrieder and the resignation of product meister Wolfgang Reitzle blows a gaping hole at the top of a company struggling to come to grips with a bad acquisition and a shifting industry landscape.
Pischetsrieder had been under fire for mounting losses at BMW's Rover Group unit. He had championed the Rover acquisition five years ago, and set the subsidiary on its flawed strategic course.
His ouster came seven hours into a supervisory board meeting called on Friday, Feb. 5, to discuss the Rover restructuring, but which turned into a battle for the company's leadership. Reitzle quit 30 minutes later when he failed to garner support for the top job from worker representatives on the 24-member board.
Soon afterwards the board named Joachim Milberg, 56, BMW's management board member for production, to replace Pischetsrieder.
In a statement, BMW said Pischetsrieder and Reitzle retired.
6 YEARS AT THE HELM
Young, energetic and visionary, the pair had been BMW's twin pillars since May 1993, when Pischetsrieder replaced Eberhard von Kuenheim as chief executive. Reitzle, who was passed over for the top job, became his strong No. 2.
The calm, bearded Pischet-srieder, who turns 51 on Feb. 15, had worked for BMW since leaving college in 1973.
He began in production, and masterminded the Z3 factory in Spartanburg, S.C.
Reitzle, 49, a flamboyant executive who was Pischetsrieder's pal during student days at Munich Technical University, had been management board member in charge of marketing, development and distribution.
He joined BMW in 1976 and later emerged as the company's youthful product development czar, capturing a seat on the management board in 1987.
Milberg joined BMW in 1993 as management board member for production, replacing Pischetsrieder. He spent the previous 12 years as a machine tools professor at Munich Technical Univer-sity. In a board reshuffling a year ago, Milberg added board responsibility for product engineering.
The supervisory board named three new members to the board:
Carl-Peter Forster, 44, head of BMW South Africa, was named head of engineering and production, replacing Milberg.
Wolfgang Ziebart, 49, was named board member for technical development. Ziebart led development of the current 3 series.
Henrich Heitmann, 57, chairman and CEO of BMW (US) Holding Corp., was elevated to the management board.
Despite expectations that Pischetsrieder would be called to account for Rover's failures at Friday's meeting, the topic never came up, a BMW spokesman said. Instead, the supervisory board meeting centered on the company's raging internal politics.
A source close to the Quandt family, which controls 45.6 percent of BMW's stock, said Friday the family would not have insisted that Pischetsrieder step down because of Rover's problems.
However, the source said the family was dissatisfied with the current BMW product range and its future model strategy, and held both Pischetsrieder and Reitzle partly responsible.
'It's about the (future) 7 series and (existing) 3 series,' said the source.
Still, the source said, the family supported Reitzle, the product development genius. But they said that employee members of the supervisory board would not.
It was unclear what impact the shake-up would have on Rover.
Pischetsrieder in December pro-mised to invest more in Rover in exchange for an agreement with British unions to improve productivity at Rover's plant in Longbridge, England. The 14,000 workers at Longbridge agreed to 2,500 job losses and new flexible working hours in exchange for long-term job guarantees and a commitment to invest $660 million to build the new Mini.
'I am bitterly disappointed that Mr. Pischetsrieder is gone,' said Tony Woodley, chief negotiator at Britain's Transport and General trade union. 'But they have clearly they've taken the view that the internal squabbling can't go on.'