Siemens CEO shakes up company to raise profits

Staff Writer
Columbus CEO

FRANKFURT, Germany (AP) — German industrial equipment maker Siemens AG is launching a sweeping restructuring to raise profits and better compete with peers such as General Electric.

CEO Joe Kaeser is eliminating the Munich-based company's four broad sectors overseeing its businesses, and will trim those business divisions from 16 to nine. Each division will get a profit margin target as Siemens aims to focus on fields where it can grow and earn the most.

Cutting out the sector level of management will reduce bureaucracy, cut costs and speed up decisions, the company says. Kaeser took over last year after previous CEO Peter Loescher missed several profit targets.

The revamp comes as Siemens is considering making an offer for the power generating business of France's Alstom, which has already received an offer from General Electric.

Kaeser was to lay out details Wednesday at a news conference.

The restructuring announcement comes along with the release of what the company called a mixed earnings performance in the first three months of the year, the company's fiscal second quarter. Net profit rose 12 percent to 1.153 billion euros ($1.61 billion). But revenues fell 2 percent to 17.78 billion euros, and new orders slipped 13 percent to 18.43 billion euros. New orders are key to the company's future profits as it delivers large projects with long lead times.

Siemens makes heavy machinery such as gas- and wind-powered turbines, trains, and medical imaging devices. Other businesses include factory automation and security equipment.