INTERNATIONAL BUSINESS Siemens Boss: US Customers Will Still Buy German

Donald Trump's public comments on protectionism have alarmed many companies, but the head of Germany's industrial giant Siemens is mainly sanguine.
Quelle: Bloomberg
Joe Kaeser is backing Germany.

Siemens chief executive Joe Kaeser says he does not fully understand US President Donald Trump's America First policies but is confident his company, which is heavily invested in the US, will be able to navigate the waters ahead.

In a conversation with Handelsblatt publisher Gabor Steingart at the Hanover Fair, Mr. Kaeser said it was not quite clear how Mr. Trump's policies would play out.

“If it were all about real facts, I would be reassured,” he said. “But there is also the post-factual. In this case it is the demand that one should buy from American companies. The question then arises: Will a company that is manufacturing in the USA, training people there, creating jobs there, also be seen as an American company, even if its headquarters is elsewhere?”

Siemens currently has more than 60 manufacturing facilities and upwards of 50,000 employees in the United States. Mr. Kaeser pointed out the company has invested over $30 billion (€27.5 billion) over the last 15 years. "We are making over $23 billion in sales and exporting from America to all over the world, even to Mexico. We are a good corporate citizen, a responsible citizen of this society.”

Mr. Trump has attacked Germany a few times, for its successful car industry and its trade surplus among other things, but Mr. Kaeser said he believed customer demand for German goods would hold up.

“On the one hand, I am worried that we are hearing sounds from the USA that do not fit our previous perception of this country,” Mr. Kaeser said. “On the other hand, I am very confident. Because everyone is constantly asking, ‘What is Trump doing?’ Or, ‘What is the Trump family doing?’”

What people are forgetting about, according to Mr. Kaeser, is the importance of the customer.

“If an American wants a special car from Germany and suddenly there is an import tax, then he has two options. Either he pays, for example, 20 percent more - or he gets his second choice of car. In either case, the customer is dissatisfied. And the customer is also a voter. And dissatisfied voters are not so good for governments.”

Mr. Kaeser met Mr. Trump and his family as part of the German delegation accompanying Chancellor Angela Merkel to Washington D.C. last month.

“We talked about how we can create new skilled jobs in the US, and above all how we can train young people for professional and skilled jobs,” he said. “Because one thing is clear, the jobs that American companies have moved abroad, for example to Mexico or China, will not return. Today, jobs primarily develop and remain where the markets and customers are.”

While this was likely not what Mr. Trump wanted to hear, Mr. Kaeser said he pressed on.

“Seventy percent of the gross world product comes from manufacturing. Industry is the backbone of any successful economy. Production is crucial - and will be even in the future,” he said.

The two men spoke about creating viable jobs in manufacturing, Mr. Kaeser said, adding that he extolled the value of the two sides of the German education system, vocational and university, to Mr. Trump. “From what I could tell, the president listened with interest,” Mr. Kaeser said.

In the meantime, Mr. Kaeser said, just as important as education is the retraining of millions of people who are unemployed or who have difficulty meeting the demands of the modern, digital world of work. In the United States alone, Siemens has already spent more than $50 million on education and training. Their global investment is nearly $600 million.

How Mr. Trump reacted to these gentle reminders of German economic importance and ingenuity was less important than the dialog itself, Mr. Kaeser said.

“What is important is that we have now spoken to each other - and not over each other,” he said. “I believe Trump wants the best for his country. He wants to make his people great again and bring the glow back into their eyes. And there is nothing wrong with that.”

With all of its investment in the United States, the Siemens CEO said he wouldn’t even consider withdrawing his company from the United States, despite the turbulent political environment.

“We’ve invested billions. We have excellent employees and work closely in partnership with our customers. We are successful and deeply integrated into society,” he said of the United States. “We employ more staff in the US than all of our main American competitors in Germany.”

As the head of a multinational corporation, Mr. Kaeser said he deals with the “new America” with a great deal of respect, tempered with a practiced global view.

“The United States is one of the greatest countries in the world and it is the world's largest economy,” he said. “But with all due respect, there are other countries. China with 1.4 billion people, India with 1.3 billion people, while one billion people live on the African continent. All these are citizens of this earth - and thus potential customers. At Siemens, we have a saying: Siemens was born in Germany, grew up in Europe and is now at home all over the world.”



Gabor Steingart is publisher of Handelsblatt and chairman of the executive board of the Handelsblatt Publishing Group. To contact the author: [email protected]