SPIEGEL Interview with Siemens CEO Peter Löscher 'The Management Culture Failed'
Peter Löscher, the new CEO at German engineering giant Siemens, discusses his predecessors' mistakes, persistent problems with corruption, the excessive salaries of some executives and the company's global opportunities.
Siemens CEO Peter Löscher: "Every Siemens employee knows that rules and laws must be observed."
Löscher: I leave my hotel as quickly as possible and just head out into the streets, preferably on foot.
SPIEGEL: And how have you gotten to know Siemens since you became CEO this summer? It is, after all, a company with 400,000 employees in 190 countries.
Löscher: Once again, I just headed out the door. In this case, of course, I needed a jet. It was important to me to get to know the Siemens universe firsthand, and not just from the perspective of an executive in Munich. I visited the divisions immediately, in Erlangen and Nürnberg, as well as in Switzerland. Then I took a look at the United States business. I also traveled to Austria, China, Japan, India and Russia. During the first 100 days in my new position, my goal was to listen and gather impressions.
SPIEGEL: In the company's 160-year history, you are the first CEO who was not promoted from within. Who is helping you get your bearings?
SPIEGEL: How could you be sure that they weren't just putting on a show for you during these trips?
Löscher: Take the discussions with young executives, for example. Their openness and enthusiasm are fantastic. One quickly discovers what's going well and what isn't in a company.
SPIEGEL: How much time did you take to think about it when Supervisory Board Chairman Gerhard Cromme offered you the job in May?
A New Hierarchy at Siemens.
SPIEGEL: Siemens has been shaken by what has probably been the biggest corruption scandal ever made public. Were you truly aware of what you were getting yourself into?
Löscher: To be honest, I underestimated the scope of the problem. The sum of questionable payments has now increased to 1.3 billion ($1.9 billion). In the summer, the charges centered on the Com division, that is, the communications business. But it's now clear that other parts of the company were clearly infected, as well.
SPIEGEL: The company has already incurred costs of 1.5 billion in penalties, back taxes and legal and consultants' fees.
Löscher: And the investigation is still underway.
SPIEGEL: Have you at least reached the bottom of this swamp?
Löscher: As far as I'm concerned, I have my two feet firmly on the ground. We want the investigation to be swift and comprehensive, and we will clearly draw the necessary consequences. We are pushing forward, and there are no ifs, ands or buts. But it will take time.
Despite the company's legal woes, business is booming at Siemens.
Löscher: Because these are all current investigations, I cannot comment on them. It is clear, however, that we all support an absolutely clean business in the future. Anyone who doesn't accept this can't work for Siemens.
SPIEGEL: Your predecessors, Heinrich von Pierer and Klaus Kleinfeld, repeated a similar mantra over and over again. But corruption was always treated on a case-by-case basis -- if it was addressed at all.
Löscher: What I have discovered here goes well beyond isolated cases. That's already borne out by the sheer magnitude of the questionable payments.
- Part 1: 'The Management Culture Failed'
- Part 2: 'Managers Broke the Law'