Siemens Industrial Units Downsizing to Match Falling Demand

Jan. 29, 2010
Drive Technologies, Industry Solutions face ongoing slump

Siemens AG is planning to downsize two of its Industry Sector business units — Drive Technologies and Industry Solutions — and restructure both organizations. It explained the changes are the result of “an ongoing slump in volume in the key mechanical engineering market.”

In a conference call, a senior executive of the electronics and electrical engineering group’s Industry segment said the organization must adjust to lower volumes of demand from its industrial customers.

In the Drive Technologies division, by the end of 2012, 840 of 2,000 jobs will be eliminated at the Bad Neustadt, Germany, plant and 300 jobs will be discontinued at the Erlangen, Germany, plant. Drive Technologies serves the process machine and machine tool markets.

“As of 2011, we will primarily be offering standard motors in the new energy-efficiency IE2 class and above. By bundling our manufacturing activities in Mohelnice (Czech Republic), we intend to actively promote technological change and to gear our structures to the future,” said Klaus Helmrich, CEO of the Drive Technologies Division.

Siemens said the Bad Neustadt plant would be converted to “an innovation and technology center” for synchronous motors and mechatronic products and solutions.

Siemens will eliminate 850 positions across its Industry Solutions division. Industry Solutions serves industrial and infrastructure customers (e.g., steel, cement and paper), which it sees continuing to decline in the coming years.

“Investment activity in the construction of new systems is still cautious in our markets, especially in Germany. This factor is compounded by weakness in the service and modernization businesses. As a result, we have a total surplus capacity of around 850 positions distributed across several locations in Germany. We’re tackling this challenge at an early stage while also strengthening our local sales activities in order to remain competitive on a long-term basis,” explained Jens Wegmann, CEO of the Industry Solutions Division.