CARY — It’s not often that a corporate boardroom putsch in Germany sends aftershocks through the Triangle. But when Munich-based industrial giant Siemens dumped its CEO this summer for repeatedly failing to meet financial targets, there was instant speculation that the 370,000-employee global company had become complacent, bloated and was overdue for major streamlining.
Siemens’ expansion in North Carolina has been held up as an example of this country’s post-recessionary manufacturing turnaround. On Monday, Eric Spiegel, the head of Siemens’ U.S. operations, said the corporate strategy in North Carolina is not expected to change anytime soon.
“We probably have half our divisions represented here in North Carolina,” Spiegel said.
With that much of the global business here, however, some units could come in for close scrutiny. Siemens specializes in industrial equipment, medical imaging and high-speed trains.
The company employs nearly 3,600 people at about a dozen sites in the state, including offices in Cary, Durham and Morrisville. It has added 800-plus jobs at its natural gas turbine factory in Charlotte in the past year and a half, the kind of jobs that just several years ago would have almost certainly gone to India or China. And three years ago Siemens nearly doubled its footprint in Cary with the addition of a 143,000-square-foot office building.
The Morrisville office employs 95 people who specialize in building technology, automation and efficiency, one of Siemens’ poorer performing divisions. The office includes sales executives, project managers, design engineers, service technicians and administrators. The Durham office is a regional sales force for medical imaging equipment that employs 24 people.
Spiegel, in a visit to Siemens’ Cary campus on Monday, didn’t elaborate on the company’s strategy under recently named CEO Joe Kaeser. He said the United States remains Siemens’ biggest market.
“We typically like to locate our manufacturing where there are good research universities,” Spiegel said. “I know that Joe (Kaeser) is very committed to the U.S. business.”
Not every Siemens operation in North Carolina is a core function, said Brian Langenberg, an industrial intelligence analyst in Chicago. He said the Morrisville office is part of an underperforming division.
“These are business where they’ve not made a good profit and the CEO just got fired, which is important to keep in mind,” Langenberg said. “Those businesses, in the big scheme of things, are not doing that well.”
The shakeup at Siemens comes in the wake of the company’s ouster of Peter Löscher as global CEO and installation of Kaeser. Löscher was let go two weeks ago after a series of setbacks, including delays in delivering high-speed trains to the Deutsche Bahn rail company, and cutting profit forecasts five times in his six-year tenure.
The company said it would divest underperforming assets, such as phone gear and lighting, and focus on its core industrial and medical businesses.
“Siemens is working to reduce complexity through out the organisation while centering on core areas of competence within the Energy, Healthcare and Industrial markets,” analyst William Mackie, of the Berenberg firm in London, predicted by email. “The operations within North Carolina are at the core of Siemens U.S. and global operations and Siemens continue to positively invest in North America to support future expected growth.”
Spiegel noted that the company is so dispersed throughout North Carolina that few here seem to know that Siemens is one of this state’s biggest corporate employers. Siemens, which has 60,000 employees nationwide and offices in all 50 states, counts North Carolina as one of its top ten workforce states.
1,200 employed in Cary
With more than 1,200 employees, Cary houses Siemens’ training facility and service call center to support North and South American customers of X-ray, MRI and other medical imaging equipment.
Spiegel, who has headed U.S. operations for the past three and a half years, is based at the company’s U.S. headquarters in Washington.
His tour included a demo of a medical imaging machine operated by a giant robotic arm that can rotate imaging plates 360 degrees around a patient’s bed. The machine is designed so that critically ill patients don’t have to be wheeled back and forth between surgery and imaging, allowing surgeons to study three-dimensional images of patients’ bodies right on the operating table.
At the Cary call center, Siemens officials noted that the company did not offshore its customer support operations at a time that many U.S. companies opted for cheaper labor. Siemens’ customers come to Cary for training and technical support on multimillion-dollar imaging equipment.