Siemens CEO 'We Need to See Calm Restored'

After the recent turbulence at Siemens, the company's new CEO, Joe Kaeser, tells SPIEGEL why the company needs a fresh start.

Siemens is an icon of German industry -- and Joe Kaeser wants it to remain one.
ullstein bild

Siemens is an icon of German industry -- and Joe Kaeser wants it to remain one.

SPIEGEL: Mr. Kaeser, critics have accused you of publically undermining the strategies of your predecessor Peter Löscher, such as his efforts to reach turnover of €100 billion.

Kaeser: All I have done is occasionally point out that such targets need to be backed up with substance. That should be perfectly acceptable, in a company led by an executive board that encourages open debate. A key role is played in this respect by the Chief Financial Officer, because it is his task to inspect allocation of funding. Peter Löscher and I are no doubt very different types, but both of us, and the executive board, have been entrusted to lead Siemens to success.

SPIEGEL: What are the company's biggest problems?

Kaeser: We need to see calm restored, so that we can once again concentrate on our core values. Our brand is our biggest strength. It reflects everything that the company has stood for over the decades -- engineering skill, innovation, quality, reliability and financial stability.

SPIEGEL: But a raft of recent problems -- from offshore North Sea wind parks' missing power lines to delays in the delivery of 16 high-speed trains to the state rail company, Deutsche Bahn -- convey a different impression.

Kaeser: These are exactly the sort of problems that Siemens cannot afford. They need to be tackled at their roots.

SPIEGEL: In the past, you have warned that Siemens needs not just to make cuts, but also to invest in new areas of business. Now you're in charge -- where are you going to start?

Kaeser: A controlled offensive has been somewhat neglected of late. Siemens' core competence is electrification, so we will continue to develop the company's value chain. This has enormous potential, I believe.

SPIEGEL: That's all?

Kaeser: There is more to electrification than power generation, transportation and distribution -- which is challenging enough when you consider the demand for a constant electricity supply to data centers in today's Internet-dominated world. In terms of electrification, methods such as ocean thermal energy conversion and fracking require particular expertise. Electromobility is another segment offering growth potential. When it comes to industrial automation, we will also see a transformation from hardware-led automation to software simulations. We cannot afford to miss any opportunities, as we did with telecommunications technology. We woefully underestimated the Internet. Given our history and the fact that we are a market leader, that was especially painful.

SPIEGEL: So far, the new sector of "Infrastructure and Cities" looks pretty chaotic….

Kaeser: But it isn't, and I will not allow the 100,000-odd employees who work in the sector to be dismissed like that. They work just as hard and take just as much pride in what they do as their colleagues in other departments. There have always been separate strands to the company. Automation and Drive Technologies for mobility infrastructures, for example, is a major focus. In developing countries as well as highly developed ones, there needs to be a reduction in the per capita costs of urban infrastructure. We want to and are able to help with this. Addressing this mega-trend is the right thing to do. We can discuss exactly how it will happen at a later stage.

SPIEGEL: That leaves your flagship sector, Medical Solutions….

Kaeser:…in which software plays an increasingly large part -- for example, in assessing and organizing diagnostics data. In the long run, we will see a paradigm shift from experiential-based to knowledge-based medicine. It will take longer than many believe, but we need to prepare for it. At the same time, diagnostics nowadays are moving toward decoding the human genome. As one of the market leaders in this area, we need to be on the alert.

SPIEGEL: What is your first priority right now?

Kaeser: In the wake of the corruption scandal, Siemens was gripped by a mood of 'something needs to happen." Staff were shocked, but that gave rise to a sense of purpose and new beginning. We need to feel that again -- albeit under more auspicious circumstances. Ultimately, strategy papers don't make or break the future and sustained success of a company. Its corporate culture does.

SPIEGEL: And after 33 years in the company, no one is more familiar with the corporate culture at Siemens than you are. Is a career like yours anachronistic, by today's standards?

Kaeser: The advantage is that it allows you to build up a network and to get to know the team, and vice versa. The disadvantage is that you lack experience of how other companies work and you don't have as many international contacts.

SPIEGEL: After outsider Peter Löscher's attempts to revamp the company, some veterans at Siemens might see you as the company's avenging angel.

Kaeser: It would be a shame if that's what they thought, and it would be wrong. I am proud to be CEO of Siemens. But given the circumstances of my appointment, excessive jubilation would be inappropriate.

SPIEGEL: There has been recent tension not just amongst employees and on the executive board, but also on the supervisory board. Do you feel compromised by the in-fighting?

Kaeser: What ultimately matters to me is that my appointment was unanimous. That shows that the supervisory board is professional and capable of putting aside individual interests for the greater good of the company. In general, I prefer to look to the future. But one thing I have realized is that regardless of what I say or the mistakes I make, things are still no better than they were. As Chief Financial Officer, I was on safe ground. Now that I am CEO, things are different. But I won't be making any easy compromises when I am convinced that something that's in the best interests of the company has to be done. Siemens means too much to me.

SPIEGEL: Even Chancellor Merkel has expressed concern about the company, saying she hopes that it can start to settle down soon. Can you promise her it will?

Kaeser: Can you promise me how the general election in September will turn out? Joking aside, I think it's great that the chancellor made a statement. Siemens is, and will remain one of Germany's industrial icons. I welcomed the attention.

Interview conducted by Dinah Deckstein and Thomas Tuma.


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