Joe Kaeser

Siemens' Political Animal

Merkel trifft Trump
Joe Kaeser, front left, sits in on a White House meeting between Donald Trump and Angela Merkel in March. Source: dpa

At the Hanover Trade Fair last year, Siemens CEO Joe Kaeser presented Chancellor Angela Merkel with a 3D-printed figurine of herself. A great PR opportunity reflecting the industrial giant’s technological prowess was immortalized in a picture of the moment.

“This is the most important photo of the year for Siemens,” one of the Munich-based company’s managers said at the time.

The picture was actually more than that. It portrayed Ms. Merkel as very close to Mr. Kaeser, one of Germany’s most influential executives, and a trusted courtier of the chancellor.

The 60-year-old bears no official credentials and would balk at the notion of having any direct influence over the chancellor, but Ms. Merkel appreciates his counsel and often brings him along on international trips as part of business delegations. Their rapport has helped shape German economic policies and the way Europe’s largest economy projects itself to the world.

What sets Mr. Kaeser apart from his peers is his adroitness at combining business with politics and financial statements with political ones.

Just this week, Mr. Kaeser met with Chinese President Xi Jinping under the auspices of an official state visit to Berlin. Along with managers from Airbus, Daimler and machine-maker Voith, he was there to sign lucrative cooperation agreements involving the “Internet of Things.” Mr. Kaeser was personally introduced to the Chinese leader by Ms. Merkel.

Mixing geopolitics and business is a skill that the head of one of Germany’s largest employers has finely tuned during his tenure as president and CEO. In the past 12 months, he has been to the US 11 times, to the Arabian Peninsula six times, China four times and India three times. In the first half of the year, Mr. Kaeser tagged along on three of Ms. Merkel’s most important international trips, including to the White House. In return, Ms. Merkel graces Siemens with her presence on important occasions for the company. The pair are now a well-established duo.

Maintaining sound relations with the government in Germany and other countries is good for business. But in the current political environment, the leaders of large international corporations must inevitably become political actors themselves.

Mr. Kaeser has consistently taken on this role with a mixture of professional discipline, curiosity and dedication to his mission. Within the German economics ministry, officials jokingly refer to him as the “foreign minister of the German economy.” But when it comes to choosing executives to join foreign business delegations, advisors to Ms. Merkel say no seats are reserved for specific companies.

Mr. Kaeser’s many trips abroad have presented ample opportunity for him to take a stance on important issues. After Russia invaded and annexed Crimea in 2013, for instance, he failed to cancel planned visits like many other company bosses and instead met with Russian President Vladimir Putin in Moscow. The message was clear: In good times and bad, Siemens stands by its customers.

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Similarly, while many corporate bosses were lining up to pay tribute to US President Donald Trump after his inauguration in January, Mr. Kaeser hotfooted it to Mexico where Siemens has a large and growing presence. He would have been fully aware that the country was lambasted by Mr. Trump for failing to stop migrants and “killing” American jobs, but didn’t seem worried.

The Mexican economy minister, Ildefonso Guajardo Villarreal, was overjoyed. “We are very grateful for this visit in these trying times,” he said. Mr. Kaeser was once again in his element.

Of course Mr. Kaeser’s primary motivation for such excursions is business. Siemens cashes in on billions of euros worth of sales to Mexico, for example. But what sets Mr. Kaeser, an ardent proponent of globalization, apart from his peers is his adroitness at combining business with politics and financial statements with political ones.

“Many CEOs of large companies are hesitant to comment on political issues,” he said at Handelsblatt’s Pathfinder conference in May. “But we have a duty to speak for the shareholders whom we represent.”

To that end, he is constantly looking for new political contacts, most recently last month. During a visit to Washington, Mr. Kaeser and his entire board made their case to congressmen and other government officials for more free trade and investment projects – basically the exact opposite of what Mr. Trump has been espousing. The president’s criticism of Germany’s trade imbalance with the US was “a wayward interpretation of competitiveness,” Mr. Kaeser said.

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At the same time, he lauded the Trump administration’s “pragmatic approach” in Washington. After all, Siemens has a lot to lose in the US so it can’t afford to be too caustic. Nearly 60,000 employees and almost $24 billion (€21.2 billion) in sales make the US Siemens’ largest single market. Even the lamps that illuminate the Washington Monument at night were made by the German industrial giant.

Back at home, Mr. Kaeser prefers not go into detail about his conversations with Ms. Merkel. All he would say was that “we have a good understanding of trust and are able to closely and jointly represent the best interests of the country.”

In such an influential relationship, there is no alternative to discretion.

 

Axel Höpner is head of the Handelsblatt office in Munich, focusing on Bavarian companies, including Allianz and Siemens. Hans-Jürgen Jakobs is a senior editor at Handelsblatt and a former co-editor in chief. Dana Heide and Thomas Sigmund also contributed to this article. To contact the authors: hoepner@handelsblatt.com, jakobs@handelsblatt.com

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