Siemens' Shuffles Management in Bid to Expand its Software Capabilities
02 December 2016 - 1:13AM
Dow Jones News
By Christopher Alessi
MUNICH-- Siemens AG said it would reshuffle management and hire
a Cisco Systems Inc. executive as part of an effort to expand its
software capabilities.
The changes, announced late Wednesday, mark the latest attempt
by Chief Executive Joe Kaeser to centralize control and reshape the
German industrial giant around digitization.
Siemens said it had recruited Cedrik Neike from U.S. technology
group Cisco to join its management board to "strengthen digital
expertise" at the top of the company. Siemens also appointed
current managing board member Roland Busch to be the group's new
chief technology officer.
The changes create a "very stable basis in management" and
underscore that the company has finally turned the page on a
"difficult time" that included years of lagging profitability and
corruption scandals, said a person familiar with management
deliberations.
Since taking over the top job three years ago in a boardroom
coup, Mr. Kaeser has presided over a comprehensive restructuring
that has included strict cost saving measures and thousands of job
cuts. He has also moved to streamline the company's former wide
range of businesses around the areas of electrification,
digitization and automation.
As part of that effort, Siemens last month announced a planned
agreement to acquire automation- and industrial-software provider
Mentor Graphics Corp. in a deal that gives the U.S. firm an equity
value of around $4 billion.
The acquisition is meant to give Siemens an edge in mechanical
and electrical simulation over rivals such as Zurich-based ABB
Group, according to the person close to the management board.
The deal, which the company expects to close in the second
quarter of next year, is likely to be Siemens' final major
acquisition in its effort to erect a "digital house" around the
"new Siemens," this person said.
Earlier this year, Siemens acquired U.S.-based simulation
software provider CD-adapco, in a deal valued at roughly $1
billion.
Mr. Kaeser has argued that Siemens' competitive advantage is its
ability to apply its software and automation capabilities to its
own industrial business areas such as oil and gas, while also
digitizing the production processes of its diverse customer
base.
Siemens has been a leader in the so-called Industrial Internet,
a global effort to marry manufacturing with the Internet of Things.
The endeavor aims to increase production efficiency by developing
smart factories in which robotic machines share data over the web,
while also enabling greater product customization on the shop
floor.
Siemens and competitors, including General Electric Co. and
Robert Bosch GmbH, have been working on digitizing their own
manufacturing processes and developing software platforms and
automation tools to sell to other industrial players.
The company also announced the appointment of E.ON SE Chief
Financial Officer Michael Sen to the managing board. Mr. Sen will
be responsible for the company's lucrative health care division,
which Mr. Kaeser has said he plans to spin off.
American, Lisa Davis, who currently sits on the management board
and runs Siemens's energy operations out of Houston, has been
appointed CEO of the company's entire U.S. operations, Siemens
said.
Write to Christopher Alessi at christopher.alessi@wsj.com
(END) Dow Jones Newswires
December 01, 2016 08:58 ET (13:58 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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