Siemens' CEO says it's 'regretful' that the UK has chosen to leave the EU

Siemens' CEO says it's 'regretful' that the UK has chosen to leave the EU
Siemens' CEO says it's 'regretful' that the UK has chosen to leave the EU

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Hind Al Soulia - Riyadh - Britain's exit from the European Union, by end of the month, is unlikely to have a "direct impact" on Siemens' operations in the UK, according to its chief executive, who said it was regretful that the continent's third-largest economy will no longer be part of the bloc.

The industrial company, one of the largest in Europe, maintains a staff of 14,000 over 14 manufacturing sites with much of the production largely serving the local market.

"We are very localised in the UK...so I'm assuming there's not going to be a big direct impact," Joe Kaeser told The National in an interview in Abu Dhabi.

"Should Brexit lead to a slowdown in the British economy, we may be affected indirectly because not as many people are trading any more or not as many people need power anymore. Although I very much regret for Europe that the third-largest economy will not be part of it anymore," he added.

The United Kingdom will formally leave the EU on January 31 in accordance with a 2016 referendum in which the British public chose to leave the 28-member single-market bloc. The International Monetary Fund warned that Britain could be plunged into a two-year recession in the event of a no-deal Brexit, which refers to the country's departure from the bloc without a withdrawal agreement.

In November, Siemens advised its customers in the UK that steps were being undertaken to "ensure business continuity" should there be a more disruptive outcome from the country's withdrawal process.

The company's UK head Juergen Maier said in an open letter, published in Politico in April, that he could no longer defend the actions of Britain's parliamentarians to his board, "making it hard to win support for finely balanced investment decisions".

Siemens' Kaeser also remains neutral on the outcome of the US Presidential elections this year, saying, "We deal with every democratically elected president no matter who it is."

The US is the biggest market for Siemens with "more than $20bn in revenues", followed by China and Germany.

"The White House is important but in terms of dealing and selling products, it's more about the direct customer relationships, which is very well established in the US," said Mr Kaeser.

"We'll see how it goes, we're not particularly worried about either situation - a prolongation of the current leadership or change," he added.

The company, which was criticised by climate activists for pursuing a $30 million deal with India's Adani Group in the Carmichael coal mine in Australia, will commit to a "significant" volume of investment in renewables, said Mr Kaeser, declining to specify a figure.

Siemens will pump more investment in innovation, particularly in "low wind technology", which allows for power generation even when wind currents are not high.

Flexible floating platforms are another segment within renewables that Siemens will look to specialise.

"[This] means that we not only put offshore wind farms into the ground, we have flexible floating which helps us to also access good wind conditions where the sea is very deep," said Mr Kaeser.

"We definitely will come out with a 10-12 megawatts machine any time soon and it's innovation at the end that's changing the game because we need to bring the cost for renewable energy down," he added.

He also responded to rumours that the company would increase its stake in Siemens Gamesa - a wind power entity - through the acquisition of Spanish firm Iberdrola's 8 per cent stake as "more of a clean-up of shareholder structure..... should there be anything in that area."

Mr Kaeser weighed in on the prospects for growth in the world economy, noting that geopolitical uncertainty could hamper investment decisions in 2020.

"If you're uncertain you would not invest, you would wait until the dust settles and you'll see bit more from the future, so if the tensions continue over a long period of time, this could negatively affect the global economy but for now it's too early to tell what that could look like or should look like," he added.

Updated: January 15, 2020 05:55 PM

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