Green Energy Disaster Sinks Siemens CEO
Siemens, Europe’s largest engineering company, has lost patience with its CEO after Peter Loescher’s expansion into green energy and expensive acquisitions led to a fifth profit-forecast cut. Supervisory board officials have asked for the 55-year-old Austrian native to be ousted.
When in May 2007 Siemens AG, battered by corruption scandals, picked then little-known Merck & Co. executive Peter Loescher as its chief executive officer, investors responded by pushing the stock to a six-year high.
This weekend, they lost patience after Loescher’s expansion into green energy and expensive acquisitions led to a fifth profit-forecast cut. Supervisory board officials have asked for the 55-year-old Austrian native to be ousted at what was a previously scheduled meeting to sign off on results on July 31. [...]
Siemens will probably appoint Kaeser, a 33-year company veteran, as CEO at this Wednesday’s meeting, according to people familiar with the matter.
While other German industrial champions have prospered during the European credit crisis thanks to their strength on export markets, Siemens has floundered.
Since Loescher took over in July 2007, the shares have declined 22 percent. [...]
A key element of Loescher’s growth strategy was the 2009 announcement that he would transform Siemens into a “green infrastructure giant”, heralding a drive into solar technology to promote Siemens as a partner for companies and governments keen to use more renewable energies.
That year he paid $418 million to buy Israel’s Solel Solar Systems and increased the stake in Italian solar thermal specialist Archimede Solar Energy to 45 percent. At the 2010 annual general meeting, the Harvard Business School MBA graduate, who at his first press conference said that Siemens needed to improve its marketing efforts, wore a green tie and called for a “green revolution.”
Yet by this June, with Chinese companies undercutting prices in the solar market and the European sovereign debt crisis stunting infrastructure investment, the company announced it would shutter the solar unit. It had racked up losses of more than 1 billion euros ($1.3 billion). [...]