Deflated - how an exit from mobile phones is rebounding on Siemens

Deflated– how an exit from mobile phones is rebounding on Siemens

Milne R. Financial Times (UK), 18 October 2006, Start page: 13 (1 page)

Purpose - To spotlight the furore over Siemens’ (Germany’s largest engineering group) behaviour and to examine its implications for German managers involved in corporate restructuring initiatives. Design/methodology/approach– Reports on how Siemens’ recent transfer of its workers, who make mobile handsets, to Taiwan’s BenQ, and the subsequent decision by BenQ to put the division into insolvency, has caused an outcry from trade unions and politicians in Germany. Puts forward how Siemens is being held to be still responsible for its former workers and is being urged to pay further compensation; describes how the crisis has focused on the issue of workers’rights versus those of shareholders and has caused further discussion among corporate leaders and investors about the problems caused by the German system of co-determination (workers on supervisory boards). Suggests that the Siemens situation should be regarded as an anomaly caused by the way that the managers have carried out its restructuring exercise, rather than as the rule; provides examples of more successful restructuring exercises carried out by German companies; quotes corporate leaders. Refers to how the job of Klaus Kleinfeld,chief executive of Siemens, may be in jeopardy; highlights how the collateral damage from the affair continues to spread. Originality/value – Homes in on how the situation at Siemens has raised a number of key concerns for German managers.Reference: 35BA581

Keywords: Corporate strategy, Industrial relations, Mobile communication systems, Organizational change, Trade unions