Newspaper article International Herald Tribune

Siemens Ousts Chief over String of Setbacks ; after Profit Warning, Board to Name Insider to Replace Loscher

Newspaper article International Herald Tribune

Siemens Ousts Chief over String of Setbacks ; after Profit Warning, Board to Name Insider to Replace Loscher

Article excerpt

Peter Loscher, head of the engineering giant since 2007, is taking the blame for a series of missteps that have plagued Siemens during the past year.

The supervisory board of Siemens, one of Germany's largest companies, said that it will fire the chief executive at a meeting Wednesday and replace him with an insider following a string of problems that led last week to a profit warning.

Peter Loscher, an Austrian who has been chief executive of the electronics and engineering giant since 2007, is taking the blame for a series of missteps that have plagued the company during the past year, including late delivery of high-speed trains for the German national railroad and delays in completing offshore wind turbine projects.

The German news media reported that Joe Kaeser, Siemens's chief financial officer, would be named to replace Mr. Loscher, but a company spokesman said Sunday that he could not confirm the reports. In a statement Saturday, Siemens, based in Munich, said the supervisory board would name another member of the company's executive board as chief executive, but did not say who.

Siemens's fortunes have consequences for the German economy as a whole because it is one of the country's largest employers, with 120,000 domestic staff, and because it is something of a bellwether for the country's industrial sector.

Along with automobiles, the German economy is based on production of high-priced goods sold to governments and corporations. Siemens's broad array of products includes gear for power generation, trains and other transportation equipment, and medical devices like X-ray scanners. Problems at Siemens are potentially a bad omen for the country.

On Thursday, Siemens shares plunged 6 percent after the company said it would not meet its profit goals for the fiscal year that begins Oct. 1. Siemens did not give a detailed explanation for the expected shortfall, attributing it to "lower market expectations." But it appeared to reflect a combination of weaker-than-expected economic growth in key markets as well as management mistakes. …

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