Factory strategist Oliver Zipse offers BMW a bold way forward

OXFORD, England — This month, before Oliver Zipse knew that he would be named CEO of BMW Group, he gave an impassioned talk here to the media about the best way forward into electric vehicles and automotive mass production.

Zipse, 55 and a 28-year veteran of the German luxury automaker, was speaking to the automotive press, but he could have been talking to BMW’s board as it seeks direction for the disruptive decade ahead.

The independent family-controlled auto- maker faces a challenge: It is known for the agile, sporty performance characteristics of its cars and crossovers, but it must electrify its powertrains without losing its high-end racy street cred — and it must do that with only a handful of busy manufacturing plants around the world.

Zipse’s focus on answering that challenge earned him the CEO post last week. BMW’s supervisory board, while meeting at the company’s biggest assembly plant, in Spartanburg, S.C., said Zipse will take the role on Aug. 16, replacing Harald Krüger, who will step down in August.

Zipse, who started at BMW as a trainee, was said to be in a race for the CEO job with another strong contender, Klaus Fröhlich, BMW’s 59-year-old board member for research. Zipse has a few years before he reaches BMW’s unofficial CEO retirement age of 60. But he also has a zeal for the intricacies of flexible manufacturing — something the company must master to juggle development and production of electric and internal combustion vehicles.

“Flexibility is key,” Zipse told journalists here during an event at the Mini assembly plant, which he once ran. Forecasting demand for EVs in the years ahead will not be as easy for BMW as forecasting its traditional products, he said.

“If we predict the success of 3 series, we can be pretty much spot on,” he said. “To predict electromobility is much more difficult. If you are not flexible either way, it’s very difficult for you to succeed in the market. Succeeding is staying profitable.”

Zipse delivered a 40-minute talk at the Oxford plant, half of it devoted to why BMW shouldn’t go down the same path as Volkswagen and others in creating vehicle platforms that are uniquely electric. Instead, he said, BMW must have platforms that can go either way.

That has been a topic of strategic debate inside BMW in recent years, complicated by the company’s relatively limited global production capacity.

BMW in June said it will introduce 25 electrified models by 2023. Zipse was at the plant in southern England to present Mini’s first electric car, the Cooper SE. It is built on the same platform as combustion-engine cars that are moving down the same assembly line. He said the cost to adapt the plant was minimal and did not require a big effort.

Zipse, a mechanical engineer who once studied computer science at the University of Utah in Salt Lake City, has been vocal for years about making BMW’s factory network more efficient and flexible. As board director with responsibility for production, he led the company to expand in Hungary, China and the U.S., while bolstering the company’s industry-leading profit margins.

“We have a 72-second cycle in our plants,” he said, referring to the industry measurement of how much time each factory work station requires. “In our German plants, we are partially below 60 seconds. To integrate different drivetrains in a plant without losing efficiency — that’s the secret.

“Either you can do that or you cannot. And we can do it, we can do it.”