Wind

Siemens Energy sacked engineers of troubled onshore wind turbine: chairman

Joe Kaeser also points to industry-wide quality issues but says orders both in gas and wind energy are very good

Christian Bruch, Siemens Energy CEO
Christian Bruch, Siemens Energy CEOFoto: Siemens Energy

Siemens Energy CEO Christian Bruch has laid off the engineers of wind turbine unit Siemens Gamesa’s troubled 4MW and 5MW machines, the company’s chairman Joe Kaeser said.

“Mr Bruch laid off those who designed these machines for us and who also constructed the 4.X and 5.X.,” Kaeser said in an interview in Davos to German newspaper and broadcaster Welt.
When contacted by Recharge about the time of the layoffs and how many engineers had been dismissed, Siemens Gamesa had no further comment.
Quality issues at Siemens Gamesa’s 4 and 5MW onshore wind platform had prompted the parent company to earmark €1.6bn ($1.74bn) for fixing those problems, with the main part of the repair costs coming this year and next. The onshore wind technology malaise has also pushed losses for Siemens Energy higher in its fiscal year of 2023.

Kaeser acknowledged the quality issues, but also pointed to industry-wide problems.

“The issue we have is that long-term qualities are required that we cannot promise for ten, 20, [or] 30 years,” he said in the broadcast interview.

“We did that and realised that we also had an issue here in terms of quality, like the entire industry. We are making huge losses in the industry. Also at Siemens Energy. That needs to change.

“Now it's time to look forward, understand these quality deficiencies well, correct them and then enable growth again.”

In comments made at the Reuters Global Markets Forum, also at the World Economic Forum in Davos, Kaeser reportedly said that the “worst is over” for Siemens Gamesa as no further problems had been detected with its latest onshore wind models since the company’s last update last year.
On a more upbeat note, Kaeser told Welt that Siemens Energy is actually having “incredibly good times, because we can hardly save ourselves from orders anymore” due to very good business in conventional energy such as grids or gas services.

“There is no order problem in wind either,” he said.

The chairman reckoned Siemens Energy shares to be currently undervalued as its market capitalisation stands at around €12bn, while the gas service and grids business alone would be worth €20 to 22bn in his opinion.

In consequence, “at the moment, Siemens Gamesa is valued at minus €10bn. If they fix [the quality issues], then at least it'll be zero.

“I bought shares in any case,” Kaeser said.

Siemens Energy stocks rose 4.94% to €11.89 a share in mid-afternoon trading Thursday at the Frankfurt stock exchange.

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Published 18 January 2024, 14:48Updated 19 January 2024, 08:05
EuropeGermanySiemens EnergySiemens GamesaJoe Kaeser