Siemens AG

ABOUT THIS COMPANY:

Probably best known as one of the world's leading makers of phones and computers, Siemens is an electronics and electrical engineering giant headquartered in Munich, Germany. With operations spanning industry, energy, telecommunications and healthcare, Siemens maintains a presence in more than 190 countries , with its huge range of products and services spanning the construction of industrial plants to state-of-the-art clinical imaging systems for healthcare professionals to visualize the molecular biology of diseases . Such a varied product range requires a large staff, and the company employs just under 400,000 staff, 126,000 of which are based in Germany, with another 106,000 scattered throughout the rest of Europe. The Americas are home to about 91,000 with another 66,000 in Asia, and the final 10,000 work in Africa and the Middle East . In its home country, Siemens has permeated the most Siemens technology generates half the electrical power in Germany, and every second traffic light in the country is made by the company.

Roots in telegraphs and X-rays

Siemens began in 1847, when German engineer Werner von Siemens co-founded a telegraph company that raked up some impressive claims to fame in the 19th century. It installed the first long-distance electrical telegraph line in Europe, and built the world's first electric railway in 1879 and the first electric streetcar in 1881. In the early twentieth century, the company grew rapidly, forming a Japanese subsidiary in 1923, and launching its electrical appliances unit and introducing to the world the first cardiac pacemaker in the 1950s.

All synapses firing

The 1960s saw Munich's first electronically controlled telephone exchange come to life in 1962 and the founding of Siemens AG in 1966. By the 1980s, the company was still ahead of the curve in terms of technological innovation, building the first 64-kbit memory chip in 1981 , and it kept the ball rolling in the 1990s by developing the Synapse 1, the world's fastest neurocomputer, in 1992. In 2001, Siemens was listed on the New York Stock Exchange. The company has fast expanded in the past decade, particularly in the Asia-Pacific region, where, by 1997, it had 45,000 employees, approximately 70 joint ventures and 60 plants.

Siemens: the electrical chameleon

Part of Siemens' growth strategy has long been the diversification of its various industries. In the early 1990s, for example, the largest European company in the computer industry, Siemens-Nixdorf Informationssysteme AG (SNI), was formed, which later, in 1999, became swallowed up into Fujitsu Siemens Computers AG. In the late 1990s, Siemens stretched its wings by buying former US electric and utilities company Westinghouse's fossil power plant activities. This helped Siemens make its mark in the US, leading to its NYSE listing.

Between 1999 and 2008, Siemens kept building through acquisitions and partnerships, but it kept itself streamlined through shedding companies whenever necessary, such as its semiconductor business. In 2001, the group merged its nuclear activities with those of the French company Framatome, which became Areva in 2006, but the nuclear love-in has been problematic recently, since France has wanted to consolidate its nuclear activities domestically, but Siemens still wants a stake of Areva.

More recently, Siemens has undergone some restructuring. As Europe's largest engineering firm, under new boss Peter Loescher, appointed in July 2007, Siemens has scaled down from fourteen unwieldy divisions, turning its focus onto industry, energy and healthcare exclusively. The Financial Times has suggested Loescher's strategy might take a leaf out of one of his previous employers, General Electric's, book, and make Siemens "faster, less complex and more focused" by focusing on its most profitable businesses. The autonomy many of Siemens' businesses enjoy in its 190 countries worldwide may be reined in as Loescher plans on creating a more regional, networked structure. Likely changes also include Siemens' labour force being trimmed, and its power transmission operations being scaled back to be replaced by a greater focus on its more higher-margin products.

Siemens' bribery blues

Scandal hit the company, however, in November 2006, when German prosecutors uncovered bribery operations at the multinational corporation stretching back to the late 1990s.

Despite the fact that Germany outlawed bribery payments in 1999 (up to that point, they could be considered business expenses), the charges contended that Siemens AG continued making payments for security and telecom contracts everywhere from Saudi Arabia to Argentina. The November arrests of six Siemens employees, including a former board member, were bolstered by evidence that the payments had been approved by higher-ups. Siemens itself began an investigation and, after calling in outside auditors, found that 1.3 billion euros worth of suspicious transactions had been conducted since 2000, hidden through multiple levels of encrypted accounting changes and personal payoffs.

Ultimately, the company was fined 201 million euros in October 2007 for its indiscretions. In the wake of the scandal, new Chief Executive Peter Loescher, appointed in July 2007, has emphasized that the group's focus lies in maintaining its good performance as global economic conditions get tougher. Loescher was the first outsider appointed to the top spot in the company's 160 year history.

The geeks have the answers

Siemens funnels much of its annual turnover back into research and development. In 2007, the company invested a total of 3.4 billion euros into research and development, which has 32,500 dedicated employees, of which 17,500 are software engineers, working in150 locations in 30 countries worldwide. The company boasts the top spot for ownership of active patents in Germany, and made 7,900 inventions in 2007.

Siemens is also engaging with some large-scale global issues, such as the population explosion and increasing urbanisation in all countries. Calling these issues "mega-trends", the company aims to use its expertise in infrastructure, healthcare and energy to deal with problems such as future water supply and the fact that global energy demands are likely to increase by more than 40 percent in the next 25 years. Its sectorial experience in industry, energy and healthcare make the company well-positioned to come up with answers to these worldwide problems.

In 2007, already making inroads in using technology to change energy trends, Siemens partnered with MAN AG to pilot a diesel electric hybrid bus in the German city of Nuremberg. The prototype used up to 25 percent less fuel than conventional buses. In 2010, this bus should become the first series-produced hybrid bus in Europe.

Bangalore and so much more

Siemens One was a partner in the construction of Bangalore International Airport which opened 2008 and which will receive 15 million passengers passing through per year by 2015. Siemens' One's contributions to the project were the IT systems, the boarding bridges, the baggage handling system, the airfield lighting, building management and fire detection. Other such global projects include the design and construction of eight sets of 250km/hr high speed trains to go from Moscow to St. Petersburg in conjunction with Russian Railways, and Siemens Healthcare developed products for the detection and treatment of breast cancer, including imaging methods such as ultrasound, mammography, and magnetic resonance tomography (MRT), methods for early detection which are becoming more and more important.