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| Joe Kaeser, left, will replace Peter Löscher as CEO of the struggling Siemens.--Courtesy of Siemens |
Despite reports he planned to kick, scream and break a thing or two, Siemens ($SI) CEO Peter Löscher has agreed to peacefully step down from the German giant, leaving CFO Joe Kaeser to clean up months of lagging sales and alarming stock performances.
Earlier this week, German newspapers reported that Löscher had no intention of going quietly, citing unnamed sources who said the CEO would only step down if Siemens Chairman Gerhard Cromme, who recruited him back in 2007, did the same. That turned out not to be true, and Löscher, Cromme and Kaeser all joined forces for a de rigueur succession statement in which each participant tries to be the most humble.
Said Löscher: "It would be fatal for the future of Siemens and its employees if the successful course we've adopted in order to reorient the company, the clarification of past errors, the return to profitable growth and the establishment of a new company culture were called into question by a loss of mutual trust. The interests of individuals--including my own--must take second place to the well-being of Siemens as a whole."
As for Siemens as a whole, revenue slipped another 2% last quarter to $25.6 billion as declining sales dragged net income down 13% to about $1.3 billion. Healthcare, long a lone growth contributor, rode a rise in imaging sales to $4.5 billion in revenue, 1% growth over the previous year.
The company is in the midst of "Siemens 2014," a deep-reaching plan to slash jobs, cut costs and reposition the company for growth. That program racked up about $578.8 million in charges last quarter, and Siemens Healthcare, which got started trimming fat a year earlier, ate $18.6 million of that.
And that's just the start of it, Kaeser said. Once he takes the reins Thursday, the new CEO plans to "put Siemens back on an even keel and create a high-performance team," which likely means more cuts and a hard look at the company's energy business, which has long struggled to compete.
"Our company is certainly not in crisis, nor is it in need of major restructuring," Kaeser said in a statement. "However, we've been too preoccupied with ourselves lately and have lost some of our profit momentum vis-à-vis our competitors. … By the fall, the Siemens team will provide information on the further refinement of our company program and address the medium-term prospects and our vision for the company. You'll see: There'll also be a Siemens after 2014."
All told, it's been a brisk fall for Löscher, who, back in May, averred that despite economic troubles across Europe, Siemens would deliver a 12% profit margin for 2013. On Friday, the CEO went back on that promise, and by Saturday night, his board had made up its mind to replace him.
- read the joint statement
- here's Löscher's personal note
- check out the full quarterly results (PDF)
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