MUNICH - BMW AG faces a difficult future with an aging management team depleted by two boardroom upheavals.
Even the company's independence is in jeopardy, some analysts say, now that its attempt to become a global, multibrand competitor is in ruins.
Three talented management board members resigned last week after the company jettisoned the troubled Rover Group. BMW sold Rover Cars and MG to a London-based venture capital group called Alchemy Partners. Ford Motor Co. bought Land Rover.
The three departed members had risen in prominence since the Feb. 5, 1999, boardroom debacle in which former Chairman Bernd Pischetsrieder was dismissed and second-in-command Wolfgang Reitzle resigned.
Gone from the board are:
Carl-Peter Forster, 45, BMW production chief and one-time heir apparent to BMW Chairman Joachim Milberg
Wolfgang Ziebart, 50, who was in charge of research and development
Henrich Heitmann, 58, the company's marketing chief.
Sources say the three were fired, but BMW officials declined comment, and Chairman Joachim Milberg, 57, failed to even mention them in a Friday, March 17 press conference here.
The retreat leaves the company in an exposed position weakened by the two successive depletions in management ranks, said Garel Rhys, director of the Center for Automotive Industry Research at Cardiff University in Wales.
'You're left with a very old board floundering around in the bourgeois provinces of Bavaria,' he said. 'They are no more an international company than the man in the moon.'
Rhys said the deal left BMW vulnerable to takeover from someone hungry for a prime luxury brand, such as General Motors.
'BMW's Midas touch is gone,' he said. 'You'll never resurrect it. They're vulnerable. They're the smallest player. Management has lost the plot.'
He added: 'The BMW board is in total disarray. It all smacks of panic by people who are conservative in mind and in action. If this company wants to retreat to its exclusive heartland (its premium identity),' selling Land Rover makes no sense.
Said one former BMW official: 'When you look at the last five or six years who has left the top levels of this company, there has been a big loss. There is not the competence or the personnel BMW needs in this situation. It is not a good story.'
Norbert Reithofer, 44, replaced Forster, and Burkhard Goschel, 56, replaced Ziebart on the management board.
BMW sold off its British empire in pieces, keeping some parts for itself. Ford Motor Co. will buy Land Rover for $2.9 billion and will get the Solihull factory and Gaydon technical center in the bargain.
A London-based venture capital firm called Alchemy Partners (see story on this page) will acquire Rover's huge Longbridge plant debt free along with the Rover and MG brands. BMW will record a $3.05 billion extraordinary charge on its disposal of Rover in its 1999 financial results.
BMW will keep its Oxford, England, factory, where it will make the Rover 75 sedan under contract to Alchemy. BMW now will move the production line it has been building for the new Mini at Longbridge to the Oxford factory, which has ample vacant space.
BMW also keeps the stamping plant in Swindon, England, for the time being.
BMW also kept for itself the designs for the R30, still on the drawing boards and the car that was to have been the successor to the Rover 25 and 45, Rover's small cars. Analysts expected that car to come out in late 2002 or early 2003.
BMW officials said they would be evaluating which portions of the R30 could be used in its own newly announced small car, probably to be called the BMW 2 series. BMW has not decided where that car will be made nor officially what it will be called.
'We have decided to develop an all-new model series under the BMW brand for the upper end of the lower midrange segment,' Milberg said.