Siemens CEO promises workers an end to restructuring

Reuters

MUNICH, Oct 1 (Reuters) - Germany's Siemens hasno plans for further restructuring measures after theengineering group's massive 6 billion euro ($8.1 billion)savings programme ends next year, its new Chief Executive JoeKaeser said.

In a letter sent to Siemens employees on Tuesday, Kaesersought to reassure workers following news that the savingsprogramme would cost 15,000 jobs.

"All measures have been discussed with the affected units.Beyond that, there are no further plans or measures," Kaesersaid in the letter, which was obtained by Reuters.

His comments come two months after he took the helm atSiemens, Germany's second-biggest company by market value, andvowed to put the company back on an "even keel" and end years ofcontinual restructuring.

He replaced Peter Loescher, who was ousted in a fierceboardroom battle following a string of profit warnings and astruggle to close the gap with more profitable rivals such asU.S.-based General Electric and Switzerland's ABB.

Since Kaeser was named CEO, Siemens stock has gained 12.5percent in value but it still trades at a discount to GE, ABB,French engineering group Schneider Electric and Dutchrival Philips.

"We have to face the realities of global competition andsecure our company's ability to compete," Kaeser said in hisletter, adding the savings programme would help bring thestrength of Siemens' earnings closer to the level of its rivals.

In its fiscal third quarter through June, Siemens posted acore operating profit margin of 5.2 percent. By comparison, GEand ABB posted operating margins of 15.3 percent and 15.2percent, respectively.

Under Loescher, Siemens had set itself a goal of pushing upits margin to at least 12 percent by next year, but stubbornlyweak demand forced it to abandon that target in July. It willpublish results for its year ended on Monday on Nov. 7.

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