Siemens names CFO to lead turnaround after dumping CEO
By Maria Sheahan
FRANKFURT (Reuters) - German engineering group Siemens (SIEGn.DE: Quote) named finance chief Joe Kaeser as its new boss after dumping Chief Executive Peter Loescher four years before the end of his contract following a second profit warning this year.
Loescher had promised that Siemens, whose products range from gas turbines to fast trains and ultrasound machines, would grow faster than rivals such as ABB ABBN.VX, General Electric (GE.N: Quote) and Philips (PHG.AS: Quote), but profitability was held back by bungled acquisitions, charges for project delays and a focus on sales growth.
Last week, Siemens abruptly abandoned its target of boosting its core operating profit margin to at least 12 percent from 9.5 percent by 2014, which turned out to be the final straw for supervisory board members, most of whom voted for his dismissal at a meeting on Wednesday.
Kaeser, 56, will start on Friday his new task of turning around Germany's second-biggest company by market value and a symbol of its industrial backbone.
He has earned a reputation as a hands-on pragmatist during his 33 years at Siemens, seven of them as CFO, and analysts say he has an understanding of its business and culture that they judged was lacking in Loescher, an Austrian who was the first external candidate ever to get the top job.
"Joe Kaeser is in our opinion the best choice in this situation," Christoph Niesel, a fund manager at Union Investment, which holds about 1 percent of Siemens shares.
"His most urgent task will be to convince Siemens' workers, even more than in the past, that radical and sustainably profitable restructuring is necessary," he added.
Loescher will remain on hand to help handle some ongoing issues until September 30. Continued...