Siemens names CFO to lead turnaround after dumping CEO

Wed Jul 31, 2013 12:19pm EDT
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By Maria Sheahan

FRANKFURT (Reuters) - German engineering giant Siemens (SIEGn.DE: Quote) named finance chief Joe Kaeser, a 33-year company veteran, as its new boss after dumping Chief Executive Peter Loescher four years before the end of his contract following a series of profit warnings.

Kaeser, 56, faces the challenge of whipping into shape a lumbering conglomerate with 78 billion euros ($104 billion) of annual sales and products ranging from gas turbines to high-speed trains and ultrasound machines.

Years of breakneck expansion and forays into new businesses, including an ill-fated detour into solar energy which led to a billion-euro loss, have left Siemens in disarray and lagging rivals such as General Electric (GE.N: Quote) in terms of profitability.

Just as a downturn in the global economy hurts demand for its bread-and-butter industrial products, the Munich-based group has been hit by big charges due to delays in offshore wind power and high-speed train projects.

Kaeser must now formulate a long-term strategy for Siemens, shed non-core units like those making hearing aids or healthcare software, and return control of the firm's far-flung businesses to top management.

He has earned a reputation as a hands-on pragmatist during more than three decades at Siemens, seven of them as CFO, and analysts say he has an understanding of its business and culture that was lacking in Loescher, an Austrian who was the first external recruit ever to run the company.

Loescher was ousted in a boardroom battle after the company issued its second profit warning of the year last week.

"His most urgent task will be to convince Siemens' workers, even more than in the past, that radical and sustainably profitable restructuring is necessary," said Christoph Niesel, a fund manager at Union Investment, which holds about 1 percent of Siemens shares.   Continued...

Newly elected Siemens CEO Joe Kaeser arrives for a news conference in Germany's Siemens AG headquarter in Munich July 31, 2013. REUTERS/Michaela Rehle