The German Car Industry's CEO Carousel Is Spinning Crazy Fast
It somehow seems less than German to have so much up in the air.
BMW CEO Harald Krüger's contract expires next spring and will not be renewed by the BMW supervisory board, and what is going to happen to the leaders of German-owned foreign brands Adrian Hallmark (Bentley) and Stephan Winkelmann (Bugatti) if their companies are absorbed under the Porsche banner? Speaking of Porsche, how solid is the position of Oliver Blume, who may be urgently needed elsewhere? And Audi CEO Bram Schot may be replaced by BMW's Markus Duesmann if his current employer gets out of the way. In more ways than one, the biggest question mark concerns the fate of EV champion and VW CEO Herbert Diess, which surely depends to a large extent on whether the MEB family of electric cars provides the right products at the right time. At Mercedes, consolidation is the name of the game with Ola Källenius installed as the new CEO, but who knows what will be on Dieter Zetsche's mind when he returns in 2021 as chairman of the supervisory board?
The Quandt family holds a 48 percent majority interest in BW and decided Krüger's fate; as a nice guy, the decision must have be difficult to determine whether he was the best choice for the lean years this industry and BMW in particular are about to face. His chief in-house opponents were CTO Klaus Fröhlich, who will turn 60 next year, and CPO Oliver Zipse. While the middle management eyed Krüger with suspicion because of his soft-spoken and charisma-driven leadership, co-workers describe Fröhlich as a capable yet ruthless hardliner who is fighting his causes with a no-holds-barred approach. Zipse was chief strategist before replacing Krüger on the production front, where he is instrumental in implementing—or blocking—Fröhlich's ambitious goals.
Markus Duesmann may end up twiddling his thumbs for more than a year as he waits to helm Audi, as it's still not clear whether BMW will let their former purchasing czar join the VW Group before the official grace period ends next May. Although Duesmann was originally hired to run Audi, where he would replace Schot, fresh speculation predicts a different outcome. According to this still speculative new game plan, Duesmann would replace Blume at the top of Porsche while Blume would face the challenge of steering Audi away from the brink, shaking up the hierarchy and installing two or three new board members in the process. This game of musical chairs could make a fair bit of sense. After all, Duesmann is a real car enthusiast and motorsports aficionado while Blume needs to collect at least one more medal of honor before being considered qualified for the Group's top position. Again, the die has not yet been cast.
In an even more radical scenario, rumor has it that Audi and Porsche may form a joint holding company with Bentley, Bugatti, and Lamborghini acting as brand group subdivisions. Why put the two biggest cash cows under one roof? Because Audi is currently going exactly nowhere, because Porsche's big bet on EVs has yet to pay off, and because the luxury/sport brands need to create serious synergies. Otherwise they might be cut to size or sold off completely. Gone are the glory days when former VW Group CEO Matthias Müller paved the way for Porsche's future, triggered the pivotal MSB and PPE architectures, and kicked off an initiative for connected, autonomous, shared, and electrified (CASE) products. A smooth operator and shrewd networker, his successor would face an arduous task getting Audi back on track. If the Porsche chairman does relocate to Bavaria, he will need an instant crash course in chaos management, as the masters up north are also proposing to merge the A5 Sportback and the A7, stick the next-generation A8 on the MSB components set, and downgrade the next A5 coupe and cabriolet to MQB bones.
Having absorbed more than €24 billion ($26.8 billion) in punitive damages for ruining the diesel engine's reputation and cheating customers by means of four different defeat devices, VW should now also have the decency to sweeten the early retirement deals for several thousand Audi workers who would lose their jobs in the aforementioned merger scenario. True, the pending electric revolution is about to make the four rings glow in the dark, but there is no money to be made with EVs in the short term, so the brand's fortune still depends to a large extent on conventional architectures and drivetrains. Hurting in this context is the demise of emotional brand-shapers like the TT, which will be replaced by the iconic but pricey interim MQB-based Quattro coupe until the all-electric TTE arrives in 2025. Or the R8, which is doomed even though Lamborghini will go ahead with the Huracán 2.0. And the tentative A9/Q9 high-end moneymakers which would have come handy in the intensifying battle against BMW and Mercedes are also dead. If Porsche can do a seven-seater Cayenne Plus, why can't Audi do an X7/X8 and GLS/Maybach rival?