Siemens Taps Merck Executive As New CEO
The supervisory board of German engineering conglomerate Siemens announced Sunday it has tapped Peter Loescher as its new CEO as the company struggles to improve an image tarnished by corruption.
Loescher succeeds Klaus Kleinfeld, who announced in April he would not seek to renew his contract though he was not linked to any of the alleged wrongdoing at the Munich-based company.
"In Peter Loescher, we have found an exceptional individual for the office of president and CEO of Siemens AG," said supervisory board chairman Gerhard Cromme in a statement.
"His upright character, his global background, his outstanding international reputation and his wide-ranging experience in business development and strategy, the financial markets and technology-related issues were the key factors in our decision. I am convinced that Mr. Loescher has what it takes to steer Siemens through its current difficulties and into a better future."
The announcement ends weeks of uncertainty over who would take over leadership of the company amid investigations in Europe and the United States into allegations employees set up secret funds to pay off union leaders and bribe officials to win contracts.
Austria-born Loescher, 49, who is currently president of Global Human Health at New Jersey-based Merck, said his appointment was "a great honor and an extraordinary challenge."
"I look forward to assuming the leadership of Siemens and the overall responsibility for benefiting the company's customers, employees, investors and shareholders," he said in a short statement. He will take over at Siemens on July 1.
Kleinfeld, also 49, had been with Siemens for 20 years and CEO since January 2005. He is to step down June 30, three months before his contract officially ends, Siemens said.
His departure follows that of board chairman Heinrich von Pierer, also a former CEO who is one of Germany's best-known business figures.
Siemens also announced the promotion of Heinrich Hiesinger, the current head of the Siemens Building Technologies unit, to the executive board.
The management changes come as Siemens has been tarnished by a series of scandals involving alleged illegal business practices.
In the first related trial, two former Siemens AG officials were convicted a week ago of bribery and assisting bribery for their involvement in multimillion-dollar payments to officials at an Italian utility.
The Darmstadt state court also ordered Siemens to forfeit 38 million euros in profits from deals with Enel of Italy, though both defendants asserted it had not been Siemens' idea to offer bribes to win contracts.
Siemens -- which makes everything from cell-phone network components to trains and is Europe's biggest engineering company by sales -- has also been subject to separate investigations over money taken from corporate accounts and allegedly used to pay bribes to help land telecommunications deals.
Siemens has confirmed the various investigations and says it is cooperating fully with authorities.
Kleinfeld -- who is not under investigation or linked to the alleged wrongdoing -- announced an internal probe of the claims and hired a law firm to conduct an independent investigation. Von Pierer also has not been named in any of the probes.