Siemens Is Said to Mull Revamp of Historic Berlin Plant

24 August 2017

Siemens AG is considering a major revamp of a historic Berlin factory that’s manufactured gas turbines for more than 100 years yet is now suffering a dearth of orders, according to people familiar with the matter.

Europe’s largest engineering company is in talks with factory workers, said the people, who asked not to be identified because talks are private. No final decision on potential cost-cuts at the plant has been taken, and an announcement may be made in the next weeks, they said.

The site, one of Siemens’ oldest, employs around 3,700 people and produces gas turbines for the Siemens Power and Gas division, which weighed on earnings and order volumes in the fiscal third quarter. The company also manufactures the turbines in another facility in Charlotte, North Carolina, which Siemens Chief Executive Joe Kaeser has pledged to U.S President Donald Trump to not close. That facility may also see some cost-cutting and restructuring, one of the people said.

A proposal to shut down the Berlin site had initially been brought before the supervisory board a few months ago, but was later withdrawn amid widespread criticism from workers’ representatives, according to one of the people. Siemens, in a statement, said any speculation about its closure was unfounded.

"On the occasion of the presentation of the figures for the third quarter, Mr. Kaeser said that further cost-cutting measures and capacity adjustments will be necessary,” Siemens said. “We will not participate in speculation about the nature and scope of the planned measures."

Under an internal accord signed with unions in 2010, Siemens agreed not to close or relocate any site without the backing of its labor force.