Siemens Explained

For other uses see Siemens (disambiguation).

Company Name:Siemens AG
Company Type:Public (AG)
Company Slogan:Global Network of Innovation
Founder:Werner von Siemens
Foundation:1847 in Berlin, Prussia
Location:Berlin and Munich, Germany
Key People:Peter Löscher, President & CEO
Wolfgang Dehen, CEO Energy Sector
Heinrich Hiesinger, CEO Industry Sector
Jim Reid-Anderson, CEO Healthcare Sector
Num Employees:398,000 (2008)[1]
Products:Communication Systems
Power Generation
Medical Equipment
Transportation and Automotive
Trains and Trams
Water Technologies
Building Technologies
Home Appliances
Fire Alarms
IT Services
Services:Business Services
Revenue: $ 110.82 billion (2008)[2]
Divisions:Industry Sector, Energy Sector, Healthcare Sector

Siemens AG is Europe's largest engineering conglomerate.[3] Siemens' international headquarters are located in Berlin and Munich, Germany. The company is a conglomerate of three main business sectors: Industry, Energy and Healthcare with a total of 15 Divisions.

Worldwide, Siemens and its subsidiaries employ approximately 480,000[4] people in nearly 190 countries and reported global revenue of $110.82 billion as of 2008. Siemens AG is listed on the Frankfurt Stock Exchange, and has been listed on the New York Stock Exchange since March 12, 2001.


Siemens was founded by Werner von Siemens on 12 October, 1847. Based on the telegraph, his invention used a needle to point to the sequence of letters, instead of using Morse code. The company  - then called Telegraphen-Bauanstalt von Siemens & Halske  - opened its first workshop on October 12.

In 1848, the company built the first long-distance telegraph line in Europe; 500 km from Berlin to Frankfurt am Main. In 1850 the founder's younger brother, Sir William Siemens (born Carl Wilhelm Siemens), started to represent the company in London. In the 1850s, the company was involved in building long distance telegraph networks in Russia. In 1855, a company branch headed by another brother, Carl von Siemens, opened in St Petersburg, Russia. In 1867, Siemens completed the monumental Indo-European (Calcutta to London) telegraph line.[5]

In 1881, a Siemens AC Alternator driven by a watermill was used to power the world's first electric street lighting in the town of Godalming, United Kingdom. The company continued to grow and diversified into electric trains and light bulbs. In 1890, the founder retired and left the company to his brother Carl and sons Arnold and Wilhelm. Siemens & Halske (S&H) was incorporated in 1897. In 1907 Siemens had 34,324 employees and was the second-largest company in the German empire by number of employees.[6]

In 1919, S&H and two other companies jointly formed the Osram lightbulb company. A Japanese subsidiary was established in 1923.

During the 1920s and 1930s, S&H started to manufacture radios, television sets, and electron microscopes.

Ardnacrusha hydro power station

In the 1930s Siemens constructed the Ardnacrusha Hydro Power station on the River Shannon in the then Irish Free State, and it was a world first for its design. The company is remembered for its desire to raise the wages of its under-paid workers only to be overruled by the Cumann na nGaedhael government.[7]

World War II era

Preceding World War II Siemens was involved in funding the rise of the Nazi Party and the secret rearmament of Germany. During the Second World War, Siemens supported the Hitler regime, contributed to the war effort and participated in the "Nazification" of the economy. Siemens had many factories in and around notorious extermination camps such as Auschwitz and used slave labor from concentration camps to build electric switches for military uses. In one example, almost 100,000 men and women from Auschwitz worked in a Siemens factory inside the camp, supplying the electricity to the camp.[8] .


In the 1950s and from their new base in Bavaria, S&H started to manufacture computers, semiconductor devices, washing machines, and pacemakers. Siemens AG was incorporated in 1966. The company's first digital telephone exchange was produced in 1980. In 1988 Siemens and GEC acquired the UK defense and technology company Plessey. Plessey's holdings were split, and Siemens took over the avionics, radar and traffic control businesses - as Siemens Plessey.

In 1991, Siemens acquired Nixdorf Computer AG and renamed it Siemens Nixdorf Informationssysteme AG.

In 1997 Siemens introduced the first GSM cellular phone with colour display. Also in 1997 Siemens agreed to sell the defense arm of Siemens Plessey to British Aerospace (BAe) and a UK government agency, the Defence Analytical Services Agency (DASA). BAe and DASA acquired the British and German divisions of the operation respectively.

In 1999, Siemens' semiconductor operations were spun off into a new company known as Infineon Technologies. Also, Siemens Nixdorf Informationssysteme AG formed part of Fujitsu Siemens Computers AG in that year. The retail banking technology group became Wincor Nixdorf.

In February 2003, Siemens reopened its office in Kabul.

In 2004, Siemens took over the mantle of official Formula One timekeeper, replacing TAG Heuer.

In November, 2005, Siemens signed a 12 year agreement with the Walt Disney Company to sponsor attractions in its Florida and California parks.

In 2006, Siemens announced the purchase of Bayer Diagnostics, which was incorporated into the Medical Solutions Diagnostics division officially on 1 January 2007.

In March 2007 a Siemens board member was temporarily arrested and accused of illegally financing a business-friendly labour association which competes against the union IG Metall. He has been released on bail. Offices of the labour union and of Siemens have been searched. Siemens denies any wrongdoing.[9]

In April 2007, the Fixed Networks, Mobile Networks and Carrier Services divisions of Siemens merged with Nokia’s Network Business Group in a 50/50 joint venture, creating a fixed and mobile network company called Nokia Siemens Networks. Nokia delayed the merger[10] due to bribery investigations against Siemens.[11]

In October 2007, a court in Munich found that the company had bribed public officials in Libya, Russia, and Nigeria in return for the awarding of contracts; four former Nigerian Ministers of Communications were among those named as recipients of the payments. The company admitted to having paid the bribes and agreed to pay a fine of 201 million euros. In December 2007, the Nigerian government canceled a contract with Siemens due to the bribery findings.[12] [13]

In July 2008, Siemens AG announced a joint venture of the Enterprise Communications business with the Gores Group. The Gores Group holding a majority interest of 51% stake, with Siemens AG holding a minority interest of 49%[14]

In October 2008, Siemens Canada Ltd. was named one of Greater Toronto's Top Employers by Mediacorp Canada Inc., which was announced by the Toronto Star newspaper.[15]

Chief executives

Corporate affairs


Peter Löscher (formerly of Merck) is the current president and the CEO as of July 1, 2007.[16] He succeeded Dr. Klaus Kleinfeld after the scandal charges of bribery against Siemens.Gerhard Cromme is the current chairman of the supervisory board of Siemens AG. He succeeded Dr. Heinrich von Pierer on April 26, 2007.

2007 Price fixing fine

In January 2007 Siemens was fined €396 million by the European Commission for rigging EU electricity markets through a cartel involving 11 companies, among which ABB, Alstom, Fuji, Hitachi Japan, AE Power Systems, Mitsubishi Electric Corp, Schneider, Areva, Toshiba and VA Tech.[17] According to the Commission, "between 1988 and 2004, the companies rigged bids for procurement contracts, fixed prices, allocated projects to each other, shared markets and exchanged commercially important and confidential information."[17] Siemens was given the highest fine of €396 million, more than half of the total, for its alleged leadership role in the incident.

Bribery case

Siemens agreed to pay a record $1.34 billion in fines in December 2008[18] after being investigated for serious bribery, involving Heinz-Joachim Neubürger, former chief financial officer, Karl-Hermann Baumann, another former CFO and exchairman, and Johannes Feldmayer, a former management board member.[19] The investigation found questionable payments of roughly €1.3 billion, or $1.9 billion, from 2002 to 2006 that triggered a broad range of inquiries in Germany, the United States and many other countries.[20]

In May 2007 a German court convicted two former executives of paying about €6 million in bribes from 1999 to 2002 to help Siemens win natural gas turbine supply contracts with Enel, an Italian energy company. The contracts were valued at about €450 million. Siemens was fined €38 million.[21]

Siemens has tightened its internal controls, and implemented strict compliance and anti-corruption measures throughout the company.

Organization structure

Since 1 January 2008, the company is divided into 3 sectors and a total of 15 divisions.[22]

  1. Industry Sector
    1. Drive Technology
    2. Industry Automation
    3. Building Technologies
      1. Fire Safety & Security Products
      2. Security Solutions
      3. Heating & Ventilation Products
      4. Building Automation
    4. Industry Solutions
      1. Water Technologies
    5. Mobility
    6. Osram
    7. Market Specific Solutions
    8. Financial Solutions
    9. IT Solutions and Services
    10. Communication Networks
  2. Energy Sector
    1. Fossil Power Generation
    2. Renewable Energy
    3. Oil & Gas
    4. Service Rotating Equipment
    5. Power Transmission
    6. Power Distribution
    7. Financial Solutions
    8. IT Solutions and Services
  3. Healthcare Sector
    1. Diagnostic Imaging and Therapy
    2. Laboratory Diagnostics
    3. Infrastructure Solutions
    4. Hearing Instruments
    5. Financial Solutions
    6. IT Solutions and Services

Key business areas and subsidiary companies before 2008

Siemens' five operational business areas before 2008 were: Automation & Control (Automation & Drives, Industrial Solutions & Services, Siemens Building Technologies), Power (Power Generation, Power Transmission & Distribution), Transportation (Transportation Systems, Siemens VDO), Medical (Siemens Medical Solutions), Information & Communication (Siemens Communications, Siemens IT Solutions and Services), and Lighting (OSRAM GmbH, OSRAM Sylvania).

The company is also active in Financing (Siemens Financial Services), Real Estate (Siemens Real Estate), Home Appliances (BSH), Water Technologies (SWT), Computers (Fujitsu Siemens Computers), and Business Services.

Recently acquired companies

Major clients

Siemens Foundation

Through an American sub-organisation known as the Siemens Foundation, Siemens also devotes funds to rewarding students and AP teachers. One of its main programs is the Siemens Westinghouse Competition in maths, science, and technology, which annually grants scholarships up to US$100,000 to both individual and team entrants. According to the foundation website, Siemens awards a total of nearly US$2 million in scholarship money every year.





Control Systems




Main competitors of Siemens are:

See also



Further reading

External links

Notes and References

  1. Web site: Company Profile for Siemens AG (SI). 2008-10-03.
  2. Web site: Forbes Global 2000. March. 2008.
  3. Web site: 2008-01-12.
  4. Web site: Siemens AG – Annual Report. January. 2008. HTML. dmy. 25 February 2008.
  5. Web site: Siemens history. 2008-01-12.
  6. Fiedler. Martin. 1999. Die 100 größten Unternehmen in Deutschland - nach der Zahl ihrer Beschäftigten - 1907, 1938, 1973 und 1995. Zeitschrift für Unternehmensgeschichte. Verlag C.H. Beck. Munich. 1. 32 - 66. German.
  7. Ardnacrusha - Dam hard job - Sunday Mirror, August 4,2002
  8. Claude Lanzmann. Shoah. DVD. New Yorker Films. 1985.
  9. Web site: Board member arrested in new blow for Siemens.
  10. [Associated Press]
  11. [International Herald Tribune]
  12. News: Ben. Agande. Miebi Senge. Bribe: FG blacklists Siemens. Vanguard. Vanguard Media. 2007-12-05. 2007-12-07.
  13. News: Juliana. Taiwo. FG Blacklists Siemens, Cancels Contract. Thisday. Leaders & Company. 2007-12-06. 2007-12-07.
  14. Siemens to spin off SEN into JV with Gores Group
  15. Web site: Reasons for Selection, 2009 Greater Toronto's Top Employers Competition.
  17. EU cracks down on electricity-gear cartel
  18. Web site: Siemens to Pay $1.34 Billion in Fines, The New York Times. 2008-12-16.
  21. Web site: The New York Times. 2007-05-15.
  22. Web site: New organizational structure of Siemens AG as of January 1, 2008. 2008-03-08.