German Minister of Economics and Energy Brigitte Zypries on Friday urged Siemens AG to rethink planned job cuts and said that job losses, particularly in economically weaker areas of former East Germany, could spur an increase in right-wing populism.
Siemens might cut thousands of jobs as part of plans to overhaul its power and gas business, which is struggling with lower worldwide demand for large electricity generating turbines, a person familiar with the plans said last week.
Up to 11 work sites could be shut down.
Zypries told Siemens CEO Joe Kaeser in a letter published by the Bild newspaper that job losses in the former Communist east could have negative consequences.
“It is particularly critical when locations in structurally weak regions — for instance in eastern Germany — are up for discussion,” she told Kaeser. “It can fuel discontentment and doubts, and could have political fallout as we saw in the parliamentary election.”
The government has no legal authority to prevent private companies from carrying out layoffs, but it has other ways to pressure firms, including through corporate policies and reviews of export licenses.
In the case of Siemens, Berlin is currently examining how two Siemens gas turbines sold for use in Russia turned up in Crimea, a region subject to EU sanctions on energy technology.
Siemens management on Thursday met with labor bosses to discuss its power turbine business, but union IG Metall said that no new information was provided.
Juergen Kerner, a senior IG Metall official and member of the Siemens’ supervisory board, said reports that the company could close up to 11 of 23 facilities in the power turbine division had spooked workers and hundreds had already staged protests at sites in Erfurt, Goerlitz, Leipzig and Erlangen.
“Management is worried about margins, not people, and we cannot accept that,” Kerner told the Sueddeutsche Zeitung. “But we are ready for a longer fight.”
Siemens management reportedly plans to submit a restructuring plan to the company’s supervisory board on Nov. 8, the day before the group is due to publish quarterly financial results.
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