Sector CEO Hiesinger Shares Siemens’ Global Perspective

Industry Sector Is A Performance Platform for the Future!

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“We provide solutions to assist our customers with the very real challenges they face,” began Dr. Heinrich Hiesinger, CEO of Siemens’ Industry Sector business and member of the Siemens Board of Directors.

Hiesinger was in Chicago July 21 for the U.S. debut of exiderdome, Siemens’ traveling technology expo. On display in conjunction with the Siemens Automation Summit and Users Conference, exiderdome this week begins a nine-city tour of industrial centers across the United States. (See exiderdome.com.)

The Industry Sector business, which Hiesinger leads, is a product of a wide-ranging reorganization earlier this year that produced substantial changes in the way Siemens is run. “We were very much a rules-based organization,” Hiesinger said. The new structure was intended to create a more flexible and productive Siemens, where opportunities rather than hard and fast rules, drive the company, Hiesinger added.

Hiesinger
“We believe the Industry Sector can grow at 2x GDP.” Heinrich Hiesinger, CEO of Siemens’ Industry Sector, is bullish on his unit’s ability to grow at twice the rate of the overall global economy.
The Industry Sector is made up of six core Siemens businesses that account for more than 50% of Siemens’ total global annual revenue: Industrial Automation, Building Technologies, Drive Technologies, Industry Solutions, Mobility and Osram/Silvania. The Industry Sector produces €40 billion in revenue and employs 210,000 of Siemens' 400,00-strong global work force. Key strategic priorities for the unit include exploiting leading positions in attractive markets, providing a convincing value proposition for its customers and making a clear statement of positioning within the competitive landscape.

The Industry Sector, according to Hiesinger, allows Siemens to add value to its portfolio by permitting higher market exploitation, use of best-in-class technology, portfolio optimization, cost synergies between businesses and best use of the very strong talent pool that globally exists in these businesses. “The Industry Sector is a performance platform for the future!” Hiesinger declared.

Hiesinger discounted much of the effect of the current “recession.” He said, “It isn’t whether or not we will have growth, but how much.” Depending on whether we see worst case, best case or something in between, Hiesinger predicted growth of between 1.9% and 3% over the next several years, rather than the typical negative growth of a true recession. “Industry trends buck reductions in capex spending,” he said. Those trends include resource scarcity, environmental issues and greening, energy demand, productivity growth and urbanization. He pointed out that the six businesses that make up the Industry Sector are designed to meet those trends head on. “Metals will continue to grow, up approximately 5% until 2012,” he said. “Drives for wind power will be up by 20%, limited only by capacity.” Opto-semiconductors will grow by 9%, Hiesinger continued, while PLM software will grow by 8%, and traffic solutions, such as light rail, will grow by 11%. Hiesinger noted that Siemens is currently number one in the metals and mining, water treatment, wind gearboxes, building automation and fire safety markets.

Like other Europe-based industrial giants, Siemens is very focused on green markets. Hiesinger said that he believed that “green” would grow by at least 10% per year and showed some data indicating that Siemens has a better environmental portfolio than its competitors. “Our environmentally friendly portfolio,” he noted, “is approximately 23% of revenue, growing at 10% per annum and expected to be 25% of revenue by FY2011.”

In honor of the exiderdome’s U.S. tour kickoff, Hiesinger reiterated Siemens’ strong commitment to its U.S. operations. “The U.S. is home to game-changing investments,” he said. He pointed out that acquisitions like US Filter, which made Siemens the largest water treatment company in the world, have also strengthened Siemens position here.

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