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The Spun Bearing: On Playing Musical Chairs With the Board of Directors

Featured Posts, Interesting | March 9th, 2012 by 5
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Announced today is a ‘strategic realignment’ of the BMW board of directors effective April 1, 2012. Quoting the press release, “Board of Management members Dr.-Ing. …

Announced today is a ‘strategic realignment’ of the BMW board of directors effective April 1, 2012.

Quoting the press release, “Board of Management members Dr.-Ing. Klaus Draeger, previously responsible for the R&D Division, and Dr.-Ing. Herbert Diess, previously responsible for the Purchasing and Supplier Network, will switch roles: Diess will assume responsibility for the R&D Division within the Board of Management, and Draeger for the Purchasing Division.

Ian Robertson will be responsible for Marketing and Sales for the BMW brand and its BMW M and BMW i sub-brands, as well as the BMW Group distribution channels.

Harald Krüger will remain the Board of Management member responsible for Human Resources and continue his role as labour relations director until June 30, 2012. In addition, he will manage a newly-formed division with responsibility for MINI, Rolls-Royce and BMW Motorrad, including the product lines and marketing and sales for each area. He will also be in charge of expanding the BMW Group’s aftersales business, which is a key focus of the company’s Strategy Number ONE.

Effective 1 July 2012, Milagros Caiña-Andree will assume responsibility for the BMW Group Human Resources Division and take on the role as labour relations director. She is currently Head of Human Resources in the Transport and Logistics division of the Deutsche Bahn Group and the board member responsible for Human Resources at Schenker AG.”

So let’s start with the appointment of Milagros Caiña-Andree to the board. She comes from a great company, Deutsche Bahn. As head of HR for DB she oversaw a big operation, roughly 229,000 employees as of 2006. So she has the experience and with a comparably sized workforce. DB, of course, is a state owned enterprise, but having had the pleasure of using the passenger service of DB, it’s been (so far) a good customer experience.

The current head of HR moves, eventually, to the division responsible for the product lines, marketing, sales, and aftersales business for BMW Motorrad, MINI, and Rolls-Royce. This frees up Ian Roberston to focus on BMW cars, M, and the i sub-brand. The message to me is, i is BIG.

But why are they switching Dr. Draeger’s and Dr. Diess’ roles? Merely to offer each exposure to another segment of the business? Possibly. Is one (or both) being groomed for the CEO slot? Well, Dr. Deiss is 53 and Dr. Draeger is 55. BMW has a retirement age of 60 for the CEO’s position. (There goes my shot at the job.) So realistically – knowing that Dr. Reithoffer’s contract as CEO was extended until 2016 – it’s doubtful that either Dr. Deiss or Dr. Draeger would be worried about that possibility.

But, again, I’m reminded that i is big. BMW research and development isn’t pure science, it’s applied science, applied to the goal of producing motor vehicles. BMW is about to unleash a string of new vehicles over the next four to five years using processes and technology that are new. Their existing supplier base will be there for a lot of parts associated with the new product they’re developing, however new suppliers will be coming on board.

With the advent of the i sub-brand new suppliers, suppliers of batteries, carbon fiber cloth, aluminum extrusions, and the like, will need to perform flawlessly at production volumes. And the parts and processes to make the i sub-brand work have all been worked out at the research and development beforehand under the supervision of Dr. Draeger. From my perspective, it makes sense to have him see these into production.

As always, I may be reading the tea leaves at too fine a level and this may be just normal job rotation, but . . .

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