Tension in the highest ranks of German
engineering giant Siemens had been
brewing for months when top managers
gathered late last month to review the
state of the business, Reuters reported
The 166-year-old titan of German industry
was having a horrible year, its image
tarnished by pricey delays to offshore
wind and high-speed train projects, and
the closure of its solar thermal business,
which had lost one billion euros.
But few of those present could have
guessed, as they entered the sleek white
Siemens Forum building in Munich, that
long-running resentments and rivalries
were about to boil over with dramatic
effect.
The nine members of the management
board, led by Chief Executive Peter
Loescher, had come together on a
Thursday in the midst of a German heat
wave, one week before Siemens was to
publish its third quarter results.
With some executives taking part by
phone, the discussion took a gloomy turn,
sources familiar with the talks said, as the
heads of the company's big divisions -
industry, energy, healthcare and
infrastructure - warned about
disappointing orders and a deteriorating
economic environment.
Some argued that Loescher's goal,
announced less than nine months before,
to boost the firm's operating profit margin
to 12 per cent by 2014, looked unrealistic.
Joe Kaeser, the finance chief who had long
viewed that goal with skepticism, agreed.
Loescher pushed back, but to no avail. The
fateful decision was taken: Siemens should
abandon the profit goal.
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