Why successful BMW boss has quit

THE GERMAN automobile industry has been rocked by the impending resignation of BMW chairman Joachim Milberg - the man who axed Rover and oversaw massive profitability during a volatile year.

Speculation is rife about the reason for his departure, ranging from an unspecified back ailment to wanting to get out while the going is good. There have also been rumours that things have been tough lately in dealing with the Quandt family, the secretive and all-powerful ruling dynasty of the company.

Milberg has announced that he will step down next May at the shareholders' meeting of the Bavarian carmaker and will be replaced by Helmut Panke who, at 55, is four years younger.

The former university professor and trained engineer is known to have been uncomfortable with the public attention that his tough managerial stance attracted, particularly the axeing of The English Patient, as German media christened Rover.

Although the supervisory board insisted he would be welcome to stay on, company insiders say he was tired of 'fractious' meetings with the Quandts, whose hands-on approach has infuriated executives at all levels of the company.

Whatever the true reasons for his departure there was a united front from BMW. The Quandt family said: 'We have nothing but praise for his achievements because he laid the foundations for BMW's future success.'

Milberg, chairman since 1999, earned the laurels of his peers in the industry for putting BMW back on the road to recovery so quickly after the Rover debacle. Indeed, the profits for this year are expected to be among the best in the firm's history. He took over at a time of Quandt-fuelled strife at the company when Bernd Pischetsrieder and Wolfgang Reitzle were forced to leave after a supervisory board meeting. He was in charge of production, and his elevation to the top job surprised many.

He made sceptics reverse their opinion of him with his March 2000 decision to axe Rover, and several top executives who disagreed - although BMW retained the new Mini. Under his stewardship, the firm has remained independent and is no longer seeking partnerships such as the one Mercedes formed with Chrysler. Although BMW will sell only 900,000 cars this year, it is enormously profitable.

A company spokesman said it was Milberg who nominated his successor - a move rubber stamped by the board. Panke will carry on the philosophy of independence, forswearing the mergers that other carmakers have seen as their salvation in hard times.

How he will fare in dealing with the Quandts remains to be seen. Milberg is a soft-spoken, reserved man while his successor is far more extrovert and dogged in his opinions. He spent three years in the US in the 1990s overseeing BMW operations there, and is said by company insiders to be a man 'not afraid of speaking his mind'.

The Quandts have been known in the past to shoot the messenger when they did not like the message. But if the good times continue to roll, especially with the launch of a new flagship 7-series car next year, he should keep his executive seat for some time to come.