Your point is well taken, and the best management does not necessarily produce the best product. It does the best job of managing the entire business, including finance, marketing, product development and so forth. BWM does have some difficulty, but going bankrupt does not necessarily spell its death. Time will tell.
As for ride quality, I hate to say this (since I am on my second Benz), but I think BMWs are better. My girlfriend/fiance has one, and I have to say that the inside is better, and the outside looks more 'aggressive' if you know what I mean. If you compare class by class, the new 3 looks better than the new C (although the new C is such a major improvement over the older generations), the 5 looks better than the E, and the SUVs are better than the Benz analogues. The only place where Benz has an outright winner is when it comes to the S-Class (still better than even the new 7-series), as well as the sportier versions (e.g. the SL is just plain better than the M6). Also, anything from AMG or Brabus will win against anything from M or AC Snitcher.
However, for the lower range that I am currently in, I have to (very reluctantly) say that a Bimmer 3 and 5 is better than a Benz C or E.