Norbert Reithofer chose a good moment to step down as BMW's CEO. When Reithofer made way for Harald Krueger in May 2015, the U.S. Environmental Protection Agency had not yet publicly accused Volkswagen Group of cheating on diesel emissions, which would imperil an entire technology. That same year Donald Trump announced his candidacy for the White House, setting him on a path that would ignite a global trade war with German automakers as a favorite whipping boy.
And in 2015, the then British Prime Minister David Cameron won a parliamentary majority, meaning he had to deliver on a promise to hold a referendum on the UK's membership of the European Union -- a matter of utmost importance for BMW, which builds Mini and Rolls-Royce cars in Britain. Plus, BMW was still earning bumper profits thanks to China's insatiable appetite for premium vehicles.
Four years later, Krueger's time as BMW chief hangs in the balance. Some supervisory board members are said to be questioning whether he is the right person to lead the automaker.
There is no doubt that BMW's profits have deteriorated under Krueger and the share price has performed abysmally. His cautious leadership style also appears to have unsettled some people at the company. There is a healthy debate to be had, though, about whether anyone else would do much better in his situation. I'm inclined to think the answer is no.
What qualities should we seek in an automaker's CEO anyway? Carlos Ghosn's fall from grace at Renault-Nissan suggests an autocratic leadership style is a dangerous thing.
At Volkswagen, the forceful Herbert Diess (who was passed over for the top job at BMW) has made some bold moves, including an all-in bet on electric vehicles. Yet his pugnacious approach has riled the trade unions and he has failed to get some of the basics right: The new Golf launch was delayed, and VW was slow to get vehicles certified in time, something the more sedate Krueger accomplished at BMW without any trouble.
How about a visionary? For a while, Elon Musk's whirlwind approach made German automakers look flatfooted. With Tesla's sales and share price cratering, the "shouldn't we be more like Elon?" brigade has gone quiet though. At Ford Motor Co., Jim Hackett's Silicon Valley buzzwords have jarred when profits are declining, and he is now busy cutting jobs.
I wonder then whether Krueger's pragmatic, cautious style isn't actually a good thing at a time of unprecedented technological and regulatory upheaval in the industry. At BMW's shareholder meeting last week, Krueger told investors that putting all the company's "eggs in one basket" on electric vehicles was the wrong approach. It is instead pursuing a mixture of electric, hybrid and fuel cell cars.
To critics this doubtless sounds like a lack of conviction, and it reinforces their fear that BMW has surrendered an early lead in electric vehicles to Mercedes and Audi. People also complain that BMW is not making enough money. Under Krueger, the autos unit has fallen short of its 8-10 percent operating margin target, something it achieved with uncanny regularity under Reithofer. But building electric cars is typically a loss-making exercise (BMW lost plenty with the i3). The critics cannot have it both ways.
It's hardly Krueger's fault that BMW was forced to book a 1.4 billion-euro ($1.6 billion) provision for possible antitrust violations. Nor can he do anything about the European Commission's stringent carbon dioxide emission targets, which are forcing automakers to spend heavily to avoid big fines.