With a third of BMW's employees projected to be above 50 years of age in five years, Harald Kruger, head of human relations (HR) management, sees it as an opportunity. The challenge is different in India, where the workforce is younger but the number one position in luxury cars has been lost to rival Mercedes Benz. Kruger, who will be 45 next month, tells Sharmistha Mukherjee that all will be well if the passion, emotion and intention are right. Edited excerpts:
You had rationalised your workforce during the downturn. How will things change with the recession on the wane?
We are increasing production volumes, running additional shifts. At some plants in Germany, we are cutting the holiday period to deliver more volumes. Worldwide, we employ 95,000 people, slightly less than last year but still the same, more or less. But in some markets, we are adding more people. In India, we are recruiting people in the sales and marketing areas, at our plant in Chennai, in services, after-sales, people responsible for developing dealerships, in the financial services area, as we now have an NBFC (non-banking finance company) licence for financial support of our car business. The business is going up. We are the number one brand in the market. We were number one in terms of sales volumes last year. We would like to retain that.
But Mercedes is back as number one in the first seven months of the year.
We respect the message. We are trying to get back the volumes. I am optimistic. Our new 5 Series has been received well. It would be fully available in the market in the second half of the year. We have new products like X1 coming into the Indian market. This product, for example, doesn't have any competitor in India. I am confident that we will gain back and retain the number one slot in the luxury car segment.
Is the human resource (HR) model different in India from that elsewhere in the world?
The difference is maybe that the processes in Indian manufacturing are more manual due to the volumes. Another plant in the world may have more automated processes because the volume is much more. But the manual processes sometimes require more skills. We have worldwide standards of quality; everyone needs to meet that. So, we invest everywhere in the required training because our customer expectations have to be met. This is also valid in case of service areas.
With wages on the rise and labour unrest rearing its head in China, do you see India as a more attractive manufacturing base?
We can't compare these two markets, really. They are different. The Indian market is at an early stage. China was the largest automotive market last year. But the Indian market has a lot of potential for us. There are a lot of people in this country. The financial sector and economic growth are doing well.
Do you see HR taking centrestage in manufacturing companies? Do you see many HR professionals rising to become chief executives?
HR is a core issue. In BMW's history, HR has added great value. The core of our success is our people, our culture. If the passion is right, the emotion is right, the intention to detail is right, you ought to be financially successful. There was a survey in 2009 in which 12 countries participated. It was carried out among 200,000 students. BMW emerged as the number one attractive employer in the automotive industry. With people working in business administration, financial services, sales and marketing, engineering -- we have been the most successful company in these three or four areas. We will try and continue to remain in that position in the future.
There is another study which raises concern about every third employee in BMW being over 50 years of age by 2015…
This is a specific German problem. In Germany, also in Austria, the demographics are like that. The scene in the US is completely different, as in India, South Africa. We have an ageing society in Germany. About 20 per cent of our work force in Germany is over 50 and this figure will increase in 10 years. This is because of German demographics, but this is not a worldwide BMW situation. The average age profile worldwide for BMW is much younger. The situation from country to country is very different. In India, for example, we have a very young team.
In Germany, the challenge is having an older community. We are countering it by offering programmes that hold that age is not a problem, that age has a chance. I personally believe that when you are older, you have more experience. There is a big chance for the company to use it to train younger people. We have projects in place which will help us to head in a direction where the ageing work profile, social profile will not be a problem for us. I don't see it as a problem; I see it as an opportunity.
Globally, do you see a rise in demand for educated personnel? Are more graduates joining?
Yes, and therefore, I believe that in the longer term, we may see engineers from India going to other parts of the world. Technically, things are more demanding now. We need efficient dynamics, technological leadership. This is more complex now. The markets require more skills. We see demand for educated workers in the auto industry globally. Today, cars have more electronics applications, so the worker at the assembly line needs more skills to handle these things, much more than in the past. That is for everyone. Never stop learning.