firm friends

Siemens CEO Makes a Deal with Mexico

Siemens AG Holds Press Conference with Economy Minister Ildefonso Guajardo
Hello, Mexico. Source: Bloomberg

Siemens Chief Executive Joe Kaeser traveled to Mexico on Tuesday in a show of support amid U.S. President Donald Trump’s hostility towards the country. Mr. Kaeser signed an agreement with Mexico’s economics minister, underpinning shared projects, and affirmed his friendship with the country.

“In challenging times like these, it’s always good to have friends,” Mr. Kaeser said of the meeting at Siemens’ regional headquarters in the Mexican capital.

Mexico is Siemens’ fifth-fastest growing market. New orders surged in the past two years by 41 percent and 32 percent to $1.5 billion by the end of 2016. Mr. Kaeser and Ildefonso Guajardo signed a declaration of intent to develop infrastructure and industrial projects worth up to $36 billion over the next 10 years. Siemens hopes to have $2 billion per year by 2020.

Mr. Guarjardo is hoping to use the deal to jumpstart an “Alliance for Mexico.” The visit comes as the new president of the United States has threatened to tax companies who produce goods in Mexico for the U.S. market and called on Mexico to pay for a wall he plans to build between the two countries.

The visit was somewhat controversial even within Siemens, which still considers the United States its most important market. But then, the Trump administration can’t really argue with the Siemens’ U.S. commitment. The company employs nearly 60,000 people in the United States in more than 60 plants and generated sales of nearly €17 billion there last year – more than 1.5 times what it generated in its home market of Germany.

Some of the traffic even goes the other way: An order for gas turbines in Mexico is being built in the United States and delived south of the border.

Mexico, too, is considered an old and important market, especially in the energy sector. After all, its first contract in the country was back in 1894 – a deal to light the boulevards of Mexico City.

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