Siemens AG, the huge German electronics group, yesterday outlined how it will shake up its loss-making activities. Out of all the company’s units, semiconductors was the biggest drain on company resources. But Siemens says it is prepared to bear another year of losses from its semiconductor activities while it prepares to float the operation off. A breakdown of group figures show it recorded pre-tax losses at the equivalent of $718.9m in its semiconductor operations though sales rose 14% to $4bn. While both Siemens’ Dresden plant and its White Oak joint venture with Motorola near Richmond, Virginia appear safe, question marks hang over two other Siemens’ chip operations. However, the company has temporarily halted the shutdown of its semiconductor plant in the north-east of England after an unnamed company from mainland China expressed an interest in buying a 49% stake in the operation. UK Prime Minister Tony Blair is expected to announce a deal next week at a conference on Sino-British relationships. Siemens is also engaged in talks with IBM Corp over its 16MB DRAM joint venture in Corbeil-Essones, France, the largest semiconductor manufacturing unit in Europe (CI No 3,548). Figures for the year to September 30 show that Siemens Nixdorf Informationssysteme, SNI recorded a 35.2% fall in pre-tax profits to $40.7m on revenues 10.3% higher at $10.2bn. The plan is to spin out the profitable point of sale and banking systems business during the current financial year with a possible IPO under consideration. Options for the remainder of the business are still under consideration. Siemens still has to find a buyer for its PC production plant after it failed to agree terms to sell the operation to Taiwanese manufacturer Acer Inc in September (CI No 3,491). On the telecommunications equipment side, Siemens put in a strong performance with an 18% increase in sales to $10.26bn and profits up 5.7% to $505.5m. While private communication systems showed a 16% rise in revenues to $7.68bn profits slid 75.6% to $67.1m. Over-priced mobile phones took much of the blame for this set-back. Siemens is also hoping to shake up its 500 top managers by paying only 40% of their wages as a fixed sum, with the remainder to be paid only if they reach targets. Siemens is stepping up its search for new products by investing in start-ups, particularly in Silicon Valley and has allocated another $90m to the $84m originally set aside for its venture capital arm. Figures converted at one mark to $0.60.
