November 23, 2017 / 1:45 PM / in 24 days

Labor union warns Siemens over power restructuring

BERLIN/LONDON (Reuters) - A restructuring of Siemens’ (SIEGn.DE) declining turbines business could trigger labor unrest across the German industrial group, trade union IG Metall warned on Thursday as workers rallied in Berlin in protest over planned job cuts.

Siemens said last week it would cut 6,900 jobs, or close to 2 percent of its global workforce, mainly at its power and gas division that has been hit by the rapid growth in renewable energy.

The issue has leapt up the national agenda in the face of potential fresh elections after Chancellor Angela Merkel’s efforts to forge a three-way coalition with two smaller parties collapsed last weekend.

“This could have company-wide consequences,” IG Metall treasurer and Siemens supervisory board member Juergen Kerner told Reuters by telephone from Berlin, where about 2,500 workers were demonstrating outside a meeting of Siemens’ works councils that was being addressed by human resources chief Janina Kugel.

“If a new culture is coming at Siemens, we are quite prepared to drag things out. Siemens would be well-advised to pay attention.”

Siemens has traditionally had a consensual style of job cutting as it has slimmed down and changed over the years, with labor representatives involved at an early stage and ways found for workers to be re-employed or retire early.

But labor bosses say this time the announcement came out of the blue.

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The plan has sparked government criticism that it could encourage right-wing populism in economically weak areas of the former East Germany, where two plants slated for closure are located.

Martin Schulz, the leader of the Social Democrats (SPD), who were asked to join coalition talks this week and are historically allied to organized labor, told Siemens workers he saw their employer’s actions as “antisocial”.

    Siemens HR chief Kugel expressed understanding for the protesters but pressed for talks to resolve the conflict, adding Siemens wanted to rule out compulsory redundancies as far as possible.

    “Protests are always a way to express anger and frustration,” she said in an interview with Reuters Television and other TV news outlets. “We can only find proposals for a solution through dialogue.”

    Financial analysts have, however, welcomed news of job cuts, saying they were needed to help the industrial conglomerate focus on business lines that will earn money in the future.

    Jefferies analyst Peter Reilly praised Siemens management for taking politically unpopular decisions and showing it would run the company “as a business, not a social fund”.

    The last full-scale strikes at Siemens were during the 1990s. The company, a German household name, has not imposed compulsory redundancies for about a decade.

    Reporting by Georgina Prodhan in London and Reuters TV in Berlin; Editing by Mark Potter

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