BMW Chief Questions Mandatory Retirement at 60

Helmut Panke of BMW is one of the most successful auto chief executives in Europe. As of Sept. 1, he will be a retired chief executive - the date clearly not of his choosing.

　　On Monday, as Mr. Panke introduced his successor, Norbert Reithofer, to a group of journalists here, he suggested that BMW's mandatory retirement age of 60 for senior executives had become outmoded.

　　"The German mentality used to be that we should lower the retirement age to open up jobs," Mr. Panke said. "The political discussion has begun about raising the retirement age. This will inevitably enter the corporate sector. It will raise the question of whether the 60-year rule makes sense."

　　Mr. Panke said he did not contest the rule because it applied throughout BMW to people in nonmanufacturing jobs. Other executives said he had not lobbied for a contract extension. Even if he had, industry executives say, the Quandt family, which controls this stylish carmaker, would not have agreed.

　　But Mr. Panke, who will turn 60 on Aug. 31, is raising an issue that resonates beyond the privileged corridors of corporate Germany. The German government plans to lift the age at which people are eligible for retirement benefits to 67 from 65 - to draw more people into the work force and to reduce costs of social programs.

　　Bertelsmann, the media conglomerate, waived its retirement age of 60 for Gunter Thielen, who was 59 in July 2002, when he succeeded Thomas Middelhoff. Mr. Thielen is expected to retire next year.

　　In BMW's case, Mr. Panke has been at the helm for only four years - a period in which the company, which is based in Munich, expanded into China, diversified with its hip Mini brand, earned record profits, and overtook Mercedes-Benz as the world's largest maker of luxury cars in terms of volume.

　　"It's fun for me," Mr. Panke said, when asked if he would like to stay on. "I like being the captain of the ship."

　　The 60-year rule is claiming another respected member of BMW's management board, Burkhard G？schel , who oversees development and purchasing and is also retiring this year. In 2008, a third board member, Ernst Baumann, who heads human resources, will turn 60.

　　Losing three of the six members of BMW's management board within two years raises an issue of "continuity," Mr. Panke said. Still, Mr. Reithofer, who is 50 and the head of production for BMW, has been a board member for six years, working closely with the chief executive from the start of his tenure.

　　For all the respect Mr. Panke commands, analysts expressed few qualms about the management change.

　　"BMW wants to be sporty, the brand that anticipates tomorrow's technology today," said Ferdinand Dudenh？ffer , director of the Center for Automotive Research in Gelsenkirchen. "To do that, you don't want your key executives to be elder statesmen."

　　He added that no single executive dominates BMW like Carlos Ghosn at Renault or Wendelin Wiedeking at Porsche. BMW's chief financial officer, Stefan Krause, and the head of marketing, Michael Ganal, have strong profiles outside the company, and were viewed as potential successors to Mr. Panke.

　　Mr. Reithofer's reputation rests on his management of BMW's global production network, which is considered one of the most flexible and efficient in the industry. He ran an assembly plant in South Africa, as well as BMW's plant in Spartanburg, S.C. And he oversaw the building of a factory in the Eastern German city of Leipzig, which turns out BMW's popular 3 series.

　　"The production world is fine-tuned at BMW, but they could be more flexible in design," Mr. Dudenh？ffer said. "Reithofer can bring more flexibility into designing and engineering the cars."

　　A buttoned-down engineer, Mr. Reithofer is a contrast to the ebullient Mr. Panke. He turned aside questions about BMW's competitors and seemed ill at ease when asked about his summer vacation plans.

　　But Mr. Reithofer spoke confidently about BMW's goals. The company intends to increase production in the United States - a strategy that would allow it to hedge against the rise in the euro versus the dollar. Mr. Reithofer said he could envision BMW increasing the capacity of the Spartanburg plant from 140,000 cars a year to 200,000 cars a year, though he did not give a timetable.

　　"We see room for improvement in the U.S. market," he said. "It's the largest market in the world."