Siemens Industry Sector: Heinrich Hiesinger and the Global Perspective

Dr. Heinrich Hiesinger, CEO of Siemens’ “Industry Sector” business, and member of the Siemens Board of Directors, kicked off the exiderdome tour press conference on Monday, July 21st by providing a mission statement for the new business unit. “We provide solutions to assist our customers with the very real challenges they face,” he said. Siemens created the Industry Sector business earlier this year in a wide-ranging reorganization that produced substantial changes in the way Siemens is run. “We were very much a rules based organization,” Hiesinger said. He said that the reorganization was intended to create a more flexible and productive Siemens, where opportunities, rather than hard and fast rules, drive the company.  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 the approximately 470,000 Siemens global work force. Why did Siemens form the Industry Sector? Hiesinger said that Siemens needed to exploit their leading positions in attractive markets, provide a convincing value proposition for the customers, and make a clear statement of positioning within the competitive landscape. The Industry Sector, according to Hiesinger, allows Siemens to add value to their portfolio by permitting higher market exploitation, utilization of best in class technology, portfolio optimization, cost synergies between businesses, and best use the very strong talent pool that globally exists in these businesses. “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%, 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,” he went on, “so we’ve just announced an expansion to our new plant in Elgin, Ill. Opto-semiconductors will grow by 9%, while PLM software will grow by 8% and traffic solutions like 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 many 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 their 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 US tour kickoff, Hiesinger noted that the Industry Sector’s US operations are key to his strategy. “The US 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 in the United States. Hiesinger reiterated Siemens’ strong commitment to its US presence and US businesses. “The Industrial Sector brings superior customer benefits through trendsetting technologies,” he said.