CEO's Ouster Threatens Siemens' Turnaround by Matthew Curtin and Joon Knapen
Summary: Heinrich von Pierer recently stepped down as Chairman of electricity and electronics giant Siemens (SI) amid a corruption scandal that erupted during his reign. Now the man who replaced him and turned the company around, Klaus Kleinfeld, is leaving too. Although he's untouched by the scandal, which has prompted both an internal probe and formal inquiries by the SEC and the Justice Department, the board will not renew his contract -- a last ditch attempt at salvaging its reputation. Union pressures are also at work against a CEO who believed in job-cutting and return-improving measures. Shares have risen about 45% in Kleinfeld's 2-year reign, and the company released better-than-expected earnings last week. With no replacement lined up, ousting the present CEO may prove to have been a hasty decision. Barron's says Siemens "needs less of a new strategic vision and more of a nitty-gritty determination to get its parts to work more efficiently through better cost-control and working-capital management," which may prove difficult if Kleinfeld's departure signals workers have gained the upper hand.
Related: Siemens Now Looking to Replace CEO • Siemens Seems Secure, Despite Bribery Suspicions - Barron's • Siemens CEO says bribery affair has no negative impact on current business [Forbes] • Siemens' Troubles Tarnish Proud Past [Hartford Courant]
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