BERLIN: When Joe Kaeser took the reins of German engineering giant Siemens last summer after a boardroom coup, he made clear his priority was closing a yawning profitability gap with rivals such as General Electric.
On Wednesday, the 56-year-old Bavarian presents his grand strategy, but it is likely to be overshadowed by something that investors and even some Siemens executives fear could undermine his profit drive: a politically-charged battle with the US group for France’s Alstom.
Kaeser is expected to unveil a major streamlining of the Munich-based company’s structure involving thousands of job cuts plus a series of smaller acquisitions and disposals. Siemens announced last week that it would make a formal offer for Alstom — most likely in the form of a swap of power and rail assets — after being encouraged by the French and German governments to step in. Hours later, Alstom’s board chose to accept a $16.9bn GE bid for the French firm’s energy unit.
How Kaeser reacts — and the signals he sends about his true interest in Alstom — will be as closely watched as the overhaul that he is to present at the firm’s historic Siemensstadt complex.
Siemens already tried to snap up the energy assets of Alstom — chiefly the manufacture of turbines for power stations and electricity transmission equipment — when the French firm required a state bailout a decade ago. But Kaeser has yet to attempt a big deal since he replaced Peter Loescher as chief executive following a string of profit warnings. “It is his first major act, his first big acquisition,” said Christoph Niesel, a fund manager at Union Investment. “If it goes wrong, he won’t be able to blame his predecessor anymore. He will be responsible.”
Siemens shares have risen nearly 17 percent since Kaeser’s arrival. Earlier this year, they poked above €100 for the first time in six years, a sign of confidence in the no-nonsense pragmatist and 34-year veteran of Siemens who had previously been finance chief. Reuters
