Siemens Under Fire
October 1, 2006
BenQ, the Taiwanese group which acquired the Siemens mobile phone subsidiary last year, said on Thursday it was pulling the plug because of deepening losses, plunging 3,000 jobs into jeopardy.
That came just days after Siemens announced it was awarding 30-percent pay rises to its top managers.
"Under the leadership of Klaus Kleinfeld, the giant is lurching," the Munich-based Sueddeutsche Zeitung said on Friday of the 48-year-old who took over the reins at Siemens last year. Kleinfeld "has not had the magic touch so far," the paper added.
Over the past fortnight, unions, politicians and even a bishop have hardly had a good word to say about one of Germany's industrial jewels, which last year had revenues of 75 billion euros (95 billion dollars) with two billion euros net income.
Even the conservative leader of the powerful state of Bavaria, Edmund Stoiber, stepped into the row, describing the pay hikes at the Munich-based firm as "extremely regrettable".
Soccer analogy backfires on chairman
Heinrich von Pierer, Siemens' supervisory board chairman, tried to justify the move with a reference to Germany's top football team. "At Siemens, we are playing in the Champions League, not in the Bavarian local league. And like Bayern Munich, we will only attract the top staff if we pay the right sort of money," he said last week.
It was not an argument that went down well with workers.
In the telecommunications division Com, 1,000 people are about to lose their jobs, hot on the heels of the 1,500 cut last year. Another 5,400 jobs are set to be slashed in the SBS information technology subsidiary, including 2,400 in Germany.
Rumours are flying that either one or both units might be shut down.
Employees flood intranet with concerns
"When you tell someone where you work, the first question is 'When are you going to be fired'," said one disgruntled employee in response to Kleinfeld's blog, which employees can access on the company's internal intranet.
Another entry said: "A lot of bosses have passed through Siemens' doors. Is one of them now going to destroy everything and, what's more, get rewarded for it?"
Against this tense backdrop, BenQ's decision to shut down its mobile phone manufacturing in Germany inflicted further harm to Siemens' image.
Siemens offloaded the mobile phone operations to the Taiwanese firm last year, even paying to have it taken off its hands, observers recalled on Friday.
Unions urge wronged workers to rise up
Unions have told BenQ Mobile's employees in Munich and sites in western Germany to vent their anger at Siemens. "They have been wronged twice," said the head of the IG Metall union, Jürgen Peters.
The general opinion seems to be that Siemens raised unrealistic expectations that the loss-making unit could be saved and then left someone else to do the dirty work.
"From an economic point of view, Kleinfeld has perhaps acted in the correct manner, but his reputation as someone who can turn around companies in a tough but always fair way has been lost," said an editorial in Friday's Financial Times Deutschland.
Even Kleinfeld's attempts at introducing an American-style motivational slogan in an email to staff have been mocked -- "work hard, win big, have fun" has been twisted into "live hard, never rest, die young", according to Der Spiegel magazine.