Tue, Oct 03, 2006 - Page 11 News List

Siemens to help workers

AID FUND Top company managers will forgo a pay rise; the money will go into a fund to pay for training for employees of the firm's former cellphone unit

AP , BERLIN

Siemens AG will cancel a pay hike for executives and allocate 30 million euros (US$38 million) in order to assist employees of the cellphone business it formerly owned, according to a report citing the company's CEO as a source that was published yesterday.

The German electronics and engineering conglomerate ceded its unprofitable handset business to BenQ Corp (明基) a year ago as part of a restructuring drive under chief executive Klaus Kleinfeld.

However, BenQ unexpectedly pulled the plug last week, saying it could not afford to pump more capital into the business because there was only "a very slim chance" of turning it around. The unit filed for insolvency protection on Friday.

According to a report in the Bild newspaper, Kleinfeld and other top Siemens managers will respond by renouncing a planned 30 percent pay rise that has already drawn allegations of greed.

"We have a new situation now and we want to signal our solidarity with the people" who could lose their jobs, Kleinfeld was quoted as saying. "If BenQ abandons the work force, we want to help them actively and quickly."

The estimated 5 million euros saved by giving up the pay rise will flow into a 30 million euro fund to pay for training to help the 3,000 employees of Siemens' former cellphone unit find new jobs, Bild reported.

Siemens officials did not immediately return calls seeking comment.

Kleinfeld announced at the time of the takeover that he had found a "sustainable" solution for the unit, now called BenQ Mobile. Staff accepted sharp wage cuts and BenQ forecast at the time that the unit could break even this year.

Labor leaders, politicians and media commentators at the weekend accused Siemens as well as BenQ of betrayal and put massive pressure on the Munich-based company to step in to help.

The Bild am Sonntag newspaper ran its coverage of the affair on Sunday under a picture of a grinning Kleinfeld and the headline "The Ruinator."

"I welcome it if Siemens is now doing everything to give as many employees as possible prospects for the future," Bild quoted Chancellor Angela Merkel as saying in yesterday's edition.

Kleinfeld said BenQ's handling of the mobile business was "unacceptable" and reiterated that Siemens could take legal action against the Taipei-based firm.

"We received assurances that the German facilities would be kept running and strengthened. This promise has been broken. We are examining all legal avenues against BenQ," he was quoted as saying.

He rejected suggestions that Siemens knew the mobile unit was doomed.

"Our goal was always to give the Siemens mobile business a solid future. To that end, we made funds, patents and even our brand name available," he said.

Siemens said on Saturday that the deal with BenQ cost it 415 million euros -- less than the 300 million euros it would have taken for Siemens to shutter the unit itself.

It also said it might be able to rehire some BenQ staff to fill vacancies in Germany that currently number more than 2,000.

BenQ, which also produces projectors and digital music players, acquired the German mobile-phone operations in a bid to expand its global market share. It has since booked 600 million euro in losses from those operations.

This story has been viewed 2381 times.
TOP top