German chancellor stresses importance for Siemens to return to 'calm waters' amid CEO storm

  • Article by: DAVID MCHUGH
  • Updated: July 29, 2013 - 6:40 AM

FRANKFURT, Germany — Germany's Chancellor Angela Merkel thinks it's important for Siemens AG to get back to smooth sailing after the German engineering group's announcement that it plans to remove CEO Peter Loescher, a government spokesman said Monday.

"From her point of view, Siemens is a flagship of German business, and so it is important to her that this global company returns to calm waters," spokesman Georg Streiter said, while stressing that removing Loescher was "a company decision."

Munich-based Siemens makes industrial machinery such as power generation and transmission equipment, high-speed trains, and medical diagnostic scanners. It has 370,000 employees, including 56,500 in the United States, and is active in 190 countries.

The company's stock dropped last Thursday after it said it would miss its 2014 goal of 12 percent profit margin, blaming "lower market expectations." On Saturday, Siemens announced its board of directors would decide Wednesday on Loescher's departure and choose another company executive as president and CEO.

News media speculation has focused on chief financial officer Joe Kaeser as the likely replacement.

Company shares traded little changed Monday on the first trading day after Loescher's departure became apparent, up 0.2 percent at 79.86 euros in early afternoon trading in Europe.

Loescher, a company outsider hired in 2007 from drug company Merck & Co., Inc., helped Siemens move past a corruption scandal involving payoffs to win contracts. But the company has lately missed profit targets and has had other slips such as late delivery of trains to Germany's Deutsche Bahn railway and cross-channel railway Eurostar.

The company is worth 70.4 billion euros in market capitalization and had net profit of 4.59 billion euros for its 2011-2012 fiscal year ending Sept. 30. The profit figure was down 27 percent on the previous year. Revenues last year were 78.3 billion euros.

Siemens reports earnings for the latest quarter on Thursday.

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