Trump Factor

Siemens Looks Across the Pond

Erlanger Siemens-Campus
Siemens CEO Joe Kaser isn't known to shy away from a political debate. Source: David Ebener/DPA

For German industrial heavyweight Siemens, recent threats by U.S. President-elect Donald Trump to crack down on big business do not spell trouble. At least that’s what a confident Siemens chief executive told German politicians on Friday.

Public concern over potential job cuts on the group’s home front make for a less comfortable ride in Germany, however.

Siemens Chief Executive Joe Kaeser isn’t known to shy away from a political debate. He’s come under fire in Germany in recent months after the company axed some 2,500 jobs at its industrial division, the majority at its heartland in Germany’s southern state of Bavaria.

But the debate at Friday’s party gathering of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel’s CDU, evolved around another issue: With U.S. President-elect Donald Trump lashing out at big corporations in several Twitter rants over the last weeks, many wonder what his presidency might spell for global business.

Siemens focused on localizing its production early on, making the company less vulnerable to threats by Trump.

But Mr. Kaeser showed little signs of concern. “We are effectively a very well-established part of the United States,“ Reuters quoted the head of the engineering group at the party gathering in the town of Seeon. Around 60,000 of Siemens’ currently roughly 348,000 workers are employed in the U.S. and following the successful completion of its takeover of U.S. software company Mentor Graphics, that number will rise to 70,000.

Siemens focused on localizing its production early on, Mr. Kaeser said according to Reuters, making the group less vulnerable to threats by Mr. Trump to punish companies shifting their production to cheaper sites abroad. “So we’ve effectively done what has just been tweeted about,” he said.

Mr. Trump in a tweet on Thursday attacked automaker Toyota for its plans to establish a new plant in Mexico, telling the group to build the site in the U.S. “or pay [a] big border tax” – an attempt to keep manufacturing jobs at home and make due on his campaign promises to put “America First.”

While debates over job cuts are traditionally much more subdued in Germany, CSU politicians were not happy over the recent round of job cuts at Siemens, which have hit employees in Bavaria, where nearly half of all 60,000 German employees are stationed, the hardest.

Given the Munich-based company’s ambitions for a turnaround from a traditional engineering group to an innovative driver in the internet of things age, many Bavarian officials are wondering whether Siemens will remain a reliable employer in the region.

“When someone invests that much in local real estate, he intends to stay,“ Kaeser said, trying to calm worries at the party gathering.

A closer look at Siemens’ global employment figures actually reveals that the group added some 3,000 jobs in the last fiscal year. During that same period its Germany-based workforce slightly declined, however, suggesting the public debate over workforce relocation will not end soon on either side of the Atlantic.

 

Daniel Delhaes is a Berlin-based Handelsblatt correspondent, reporting on politics, transport and airlines. Tina Bellon is an editor for Handelsblatt Global. To contact the authors: delhaes@handelsblatt.comgastautor@handelsblatt.com

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