Siemens Energy’s Spanish Plans Are Meeting Union Pushback

Article content

(Bloomberg) — Siemens Energy AG has been gradually dismantling its embattled  Spanish wind turbine maker, while giving no assurances about its commitment to the firm and safeguarding jobs, according to unions.

The German firm has already closed down three Siemens Gamesa Renewable Energy SA plants in Spain and moved the production of turbine blades to Portugal in its quest to lower labor costs, according a document from Spanish unions filed with market regulators on Thursday. The firm is now also weighing the sale of two component units that employ around 1,400 staff, they said.

Article content

Siemens Energy has demonstrated “no commitment whatsoever to maintain an industrial structure in Spain” or the jobs dependent on it, according to the document.

The broadside from unions comes as the German firm presses ahead with its €4 billion ($4.1 billion) bid to buy the outstanding 33% of shares that it doesn’t already own in Siemens Gamesa. Supply chain snarl-ups and rising commodity prices coupled with cost overruns in its onshore business tipped the unit into a third year of losses when it reported earnings earlier this month.

A spokesperson for Siemens Energy declined to comment when contacted by Bloomberg.

The unions claim management hasn’t met pledges made when Siemens AG bought a controlling stake in Gamesa and wrapped it and its own wind power unit in a new Spanish-listed company in 2016. Spain’s securities regulator CNMV had exempted Siemens from launching a full takeover bid on the grounds that it had an “industrial or corporate” goal for the business.

Article content

“Maybe I didn’t look deeply enough [into structural problems], that’s something I would do differently today,” Siemens Energy Chief Executive Officer Christian Bruch said Wednesday during the company’s earnings call, referring to when he started in the role in 2019. “The current structure with our 67% share makes decisions extraordinarily complicated and slow in a market where you need to react quickly.”

The union document was filed at the same time as Siemens Energy announced that its bid for Siemens Gamesa drew support from management of its loss-making Spanish unit. It also announced that Bruch will become non-executive chairman of Siemens Gamesa.

Siemens Gamesa has already said it intends to cut almost 3,000 jobs globally, while also weighing divestments of non-strategic assets in Spain and relocating production centers while making more job cuts. That means pledges to safeguard employment contained in the bid prospectus are non-existent, according to the unions.

(Updates with bid details, new chairman in sixth paragraph)