Are you sure?

Siemens sees technology unit in „promising position”

Siemens AG said its new technology services unit, which started today, is in a „promising position” as the division will benefit from a presence in low-wage countries and access to Siemens customers.

Siemens AG, Europe's largest engineering company, said in October it will combine its unprofitable computer-services operations, called SBS, with the software units to form a new division called Siemens IT Solutions and Services, or SIS. „The new group is in a very promising position,” Siemens said in an e-mailed statement today. „No other IT provider has such close links with a global industrial corporation like Siemens and benefits from access to its customers.”

The SBS division was CEO Klaus Kleinfeld's biggest obstacle in his quest to bring all 11 main divisions within the profitability ranges he set for coming April. SBS, which burnt through three division heads since 2001, amassed €690 million ($893 million) in losses in 2005, forcing Kleinfeld to accelerate a turnaround and cut 5,400 jobs at the unit. The new SIS division, with clients including Deutsche Bank AG and the British Broadcasting Corp, will have annual sales of about €5 billion and employ about 43,000 people. Because of the integration of the company's software units with operations in Eastern Europe, Asia and India, the new unit will have a „significant presence in low-wage locations,” Siemens said.

Michael Schulz-Drost, the former Finance Chief of SBS, will hold the same position at SIS, Siemens said today. The company said in October that former SBS chief Christoph Kollatz will also head the new division. In the coming weeks, the management team will be working „flat out” to integrate the five previously separate units and their portfolios, Siemens said. From the fiscal Q3, starting April 1, the new unit's financial figures will be reported in Siemens's financial reports, the company said. (Bloomberg)