MUNICH/FRANKFURT (Reuters) - Weekend news of 15,000 job cuts at Germany's Siemens has put the German engineering group's new chief executive, Joe Kaeser, on a collision course with workers' representatives only two months after he took the helm.
"We oppose a margin-driven job-cutting program. Siemens needs a sustainable and future-oriented program that focuses on people and not just on margins," works council chief Lothar Adler said on Monday.
Siemens, Germany's second-biggest company by market value, aims to save 6 billion euros ($8.1 billion) to close the gap with more profitable rivals such as U.S.-based General Electric and Switzerland's ABB.
It had so far declined to say how many jobs would go as part of the program, announced under former CEO Peter Loescher, who was ousted and replaced by Kaeser following a fierce boardroom battle two months ago.
On Sunday, a company spokesman told Reuters that Siemens would shed an overall 15,000 jobs, or about 4 percent of its overall workforce, half of which were already gone.
A third of the job cuts are in Siemens' German home market. Of those, 2,000 are to be at the industrial products business, and 1,400 jobs each in the energy and infrastructure businesses.
Kaeser faces the challenge of whipping into shape a lumbering conglomerate with almost 370,000 workers, 78 billion euros of annual sales and products ranging from gas turbines to high-speed trains and ultrasound machines, as well as regaining investor confidence.
When he took office, he said he would continue his predecessor's savings program, but also vowed to put Siemens back on an "even keel", end years of continual restructuring and do away with a focus on short-sighted margin targets.
Under Loescher, Siemens announced the massive savings program and said it aimed to push up the margin on its core operating profit to at least 12 percent from 9.5 percent by 2014. It was forced to abandon that target in June as its main markets remained weaker than expected.
"This (savings) program neither reached the target of increasing Siemens' margin in the short term nor does it appear that the goal of improving complicated processes has seriously been tackled," deputy works council chief Birgit Steinborn said.
In the first nine months of its financial year, which ends on Monday, Siemens' profit margin shrank to 5.7 percent due to project charges and weak demand for industrial products such as automation and drive technologies.
Kepler Cheuvreux analyst Hans-Joachim Heimbuerger affirmed his "buy" recommendation on Siemens stock and said the headcount reduction would help the company improve its operating profit per employee compared with rivals.
In its last quarter, Siemens' operating profit per employee stood at 2,728 euros, about 13 percent below ABB and 70 percent below GE.
($1 = 0.7385 euros)
Reporting by Jens Hack and Maria Sheahan; Editing by Kevin Liffey