News
Siemens plans restructuring and capacity adjustments in two divisions
28.01.2010
Layoffs due to operational reasons still to be avoided
Restructuring and capacity adjustments are planned for the near future at two divisions of Siemens’ Industry Sector. In connection with an upcoming change in technology at Low Voltage Motors, plans call for reorganizing the production structure at this business segment of the Drive Technologies Division. Due to an ongoing slump in volume in the key mechanical engineering market, an adjustment of the Division’s production capacity is also planned. As a result, by the end of 2012, a total of roughly 840 jobs at the Division’s location in Bad Neustadt an der Saale (Germany) are to be cut and some 1,200 retained from the location’s current total workforce of slightly more than 2,000. At the Division’s Erlangen (Germany) location, some 300 further jobs are to be eliminated. At the Industry Solutions Division, the workforce in Germany is to be reduced by around 850 due to declining market volume. These plans were presented today to the Committee for Economic Policy of Siemens AG. Consultations with the relevant employee representatives will begin immediately. “We intend to honor our pledge to make workforce-related adjustments as far as possible without layoffs for operational reasons. We’ve achieved this up until now by using a wide variety of measures – even in cases where the adjustments were considerably more extensive. Therefore, I’m convinced that the employee and employer sides will be successful this time as well,” said Siemens’ Chief Human Resources Officer Siegfried Russwurm.
Siemens’ Drive Technologies Division currently manufactures standard low-power low-voltage motors for the European market primarily in Mohelnice (Czech Republic) and, to a much lesser extent, in Bad Neustadt (Germany). The introduction of the next-generation of energy-efficient motors will make it necessary to invest in assembly lines and bundle production at one location. As a result, 640 jobs at the Drive Technologies Division in Bad Neustadt will be eliminated over approximately the next two and a half years due to structural factors. “As of 2011, we will primarily be offering standard motors in the new energy-efficiency IE2 class and above. By bundling our manufacturing activities in Mohelnice, we intend to actively promote technological change and to gear our structures to the future,” said Klaus Helmrich, CEO of the Drive Technologies Division.
In this context, plans call for making the Bad Neustadt location an innovation and technology center, for instance for synchronous motors and mechatronic products and solutions, by building on the development and manufacture of high-grade servo motors and machine tools and production machines already located there. However, this business has also been affected by a massive decline in orders in the mechanical engineering area. As a result, in the medium term, there will be a further surplus capacity of around 200 positions due to cyclical factors. At the partner facility on Frauenauracher Street in Erlangen, where the electronics for the motors are produced, there will likewise be a surplus capacity of some 300 positions due to cyclical factors.
The Industry Solutions Division, which implements projects with partners in the steel, cement and paper industries, among others, expects its capacity utilization to reach its lowest point in 2011. “Investment activity in the construction of new systems is still cautious in our markets, especially in Germany. This factor is compounded by weakness in the service and modernization businesses. As a result, we have a total surplus capacity of around 850 positions distributed across several locations in Germany. We’re tackling this challenge at an early stage while also strengthening our local sales activities in order to remain competitive on a long-term basis. Together with the employee representatives, we will now develop solutions for reducing capacity in the short and medium term,” explained Jens Wegmann, CEO of the Industry Solutions Division.
Siemens intends to minimize the social impact of the planned workforce reductions to the greatest extent possible. As in the past, the company will use all means at its disposal for this purpose. These include the voluntary termination of employment contracts, the expiration of limited-term contracts, the reduction of temporary contracts, the exchange of personnel between locations and reduced working hours.
