According to representatives of German technology giant Siemens, the concern no longer plans to produce energy equipment. In this regard, the company will have to eliminate part of the jobs. However, experts warn that this could have a detrimental impact on the unemployment rate.
The management of Siemens has announced the closure of its power division. Notably, the company has branches all over the world with about 90,000 employees currently. Its annual sales reach 29 billion euros. Still, this division is considered to be money-losing. In the spring of 2020, the factories producing wind turbines as well as turbines for coal and gas power plants were taken over by Siemens Energy, a subsidiary of Siemens.
The Munich electrical giant intends to phase out the production of turbines, which is its traditional business line. Siemens management credits its decision to the lack of prospects. The company focuses on the decarbonization of the global economy, refusing fossil fuels. Siemens believes that this trend will prevail in the coming decades. In Europe, many companies have already stopped constructing new coal-fired power stations. Siemens Energy has also chosen this path. The firm is going to produce equipment for renewable energy.
Along with the phase-out of turbine production, Siemens plans to cease the production of wind turbines. The concern is likely to give up its 67% stake in Siemens Gamesa Renewable Energy, a German-Spanish joint venture. Interestingly, SGRE has been producing and maintaining wind turbines for 40 years. However, the company is currently suffering losses.
Experts note that 55% of the energy unit has been in free float on the stock exchange since September 28. The holders of shares in the new company can keep or sell them. At the moment, the parent concern owns 35% of the shares, while the Siemens Pension-Trust - 10%. Both companies are expected to reduce their holdings in the near future. After the listing, the Munich-based headquarters is set to keep a blocking stake of 25%.
