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SPIEGEL Interview with Gerhard Cromme

'We Must Guide Siemens Back to Calmer Waters'

Siemens Supervisory Board Chairman Gerhard Cromme discusses the company's unusual search for a new CEO, the no less unusual reasons for the departure of its last chief executive and the future consequences of the corruption scandal that has deeply shaken the global company.

SPIEGEL: Mr. Cromme, how did you, in your search for a new Siemens CEO, decide on Peter Löscher, a largely unknown executive at Merck?

Cromme: When you are searching for a new chief executive officer for Siemens, one of Germany's and Europe's best-known companies, you must, of course, carefully consider the sort of profile you want to have. You set up something like a wish list, which you then use as a basis for assessing the candidates. A Siemens CEO has to have industry and international experience, he must have a high affinity for technology and the sciences, and he must be capable of dealing with the international financial markets. If he also has experience with the US Securities and Exchange Commission (SEC) and the Department of Justice, this becomes extremely helpful in a concrete situation.

SPIEGEL: But shouldn't this wish list also include an understanding of the many fields in which Siemens operates?

Cromme: That's part of industrial experience. Mr. Löscher worked at General Electric, Siemens' main competitor, before he was recently made a member of the executive board at the US pharmaceutical company Merck.

SPIEGEL: But he has never run a corporation.

Cromme: And in Siemens' 160-year history, there has never been a chief executive who ran a company like Siemens before taking the position ...

SPIEGEL: ... because there has never been one who came from outside the company…

Cromme: ... neither Klaus Kleinfeld, Heinrich von Pierer nor Karlheinz Kaske. There has rarely been anyone who has been such a good match for the requirements I just listed. He was a member of the executive board at GE. What senior executive at Siemens has ever acquired experience working for our main competitor? And he is the undisputed second-in-command at Merck and had already been promised the top job.

SPIEGEL: So the first thing you had was a wish list. But how exactly did you happen upon Peter Löscher?

Cromme: In early May, Professor Walter Kröll, a member of the Siemens supervisory board, asked me whether I knew Mr. Löscher. He gave me his resume, and it was immediately obvious to me that it was an exact match of my wish list. I then met with Mr. Löscher, and after two or three hours I was convinced that he was the man we were looking for. No one else is as predestined to assume this task as he is. The entire supervisory board now agrees with me on this. This is why I am so overjoyed that he is able to start on July 1.

SPIEGEL: How could this happen so quickly if he is such an important man at Merck?

Cromme: Because there are different periods of notice in the United States. He could have left on June 1, but he prefers to wrap up his duties at Merck first. It's a stroke of luck for us that he can start so soon, because this eliminates all speculation ...

SPIEGEL: ... that you, for example, have your eye on the chief executive position.

Cromme: That's complete nonsense! I was in talks with Peter Löscher beginning in early May, which made it all the more amusing to me to read all the canards the press, even serious publications, were selling the public as the latest developments.

SPIEGEL: But it is a fact that you discussed the Siemens CEO position with Linde chief Wolfgang Reitzle.

Cromme: He was the only one with whom Josef Ackermann, the chairman of Deutsche Bank, and I discussed the position. All other names are pure fiction.

SPIEGEL: Did they put their own names in the hat?

Cromme: That seems to have happened, too. I put that down to altruism.

SPIEGEL: What would you have done if Löscher had turned down the offer?

Cromme: Then we would have had to rethink the issue. But we didn't have to. We have a wonderful solution. Mr. Löscher accepted right away. It's an enormous task, but also an honor. He is also a dedicated European and wants to return to Europe. That was why he acted so quickly and courageously.

SPIEGEL: So now you have a new chief executive. But why did the old one have to go in the first place? After all, Klaus Kleinfeld did deliver outstanding numbers.

Cromme: Prior to the last supervisory board meeting, the shareholders met twice to discuss how to proceed. Mr. Kleinfeld is undoubtedly a very competent manager, and Debevoise ...

SPIEGEL: ... the American law firm Siemens has hired to analyze, for the SEC, the corruption scandal that has shaken the company for the past few months ...

Cromme: ... found no evidence of "smoking guns" to suggest that he acted illegally. However, the penalties Siemens could face in America are very severe. We know from experience that those responsible would be well advised not to irritate the American authorities. This is why we have coordinated every step with the American attorneys.

SPIEGEL: And they advised you to sacrifice Kleinfeld?

Cromme: No. But they urged us not to extend Klaus Kleinfeld's contract, which expires on September 30, at the supervisory board meeting in late April. Mr. Kleinfeld had already been chief executive for two years when evidence of the corruption scandal first emerged. There is absolutely nothing to suggest that he knew something or did anything wrong. But no one knows what else could come to light in the coming months. That was why they advised us to put off extending the contract for as long as possible ...

SPIEGEL: ... which Kleinfeld perceived as an offence. He drew the consequences.

Cromme: Of course, the indiscretion relating to Reitzle also played a part in that. Mr. Kleinfeld believed that in this situation, he could not wait any longer without losing face. That was why he told us, and the employees, on April 24, that he was no longer interested in extending his contract.

SPIEGEL: And you and Ackermann were more or less disgraced.

Cromme: I see this in a completely different light, even if that was the way it was portrayed in the press. Why should we have felt disgraced?