Siemens to replace CEO Peter Loescher after fifth forecast cut

MUNICH: Siemens will replace Chief Executive Officer Peter Loescher after Europe’s biggest engineering company repeatedly missed profit targets and charges mounted for failed power and train projects.

On July 31, Siemens’ supervisory board will decide on the “early departure” of Loescher and the “appointment of a member of the managing board as President and CEO,” the company said on Saturday. Chief Financial Officer Joe Kaeser and industry division head Siegfried Russwurm are favourites to take the helm after supervisory board members met to discuss the leadership, according to two people familiar with the talks.

Loescher, appointed in 2007 to clean up after the biggest corruption scandal in German history, this week cut a profit forecast for the fifth time in his six-year tenure. The Austrian native, who joined Siemens from drugmaker Merck & Co as the first CEO hired from outside the company, has presided over a failed push into environmentally friendly energy which led to spiraling costs.

He also had to write down the value of several acquisitions. “It would make sense to pick an internal candidate, since it will be very important that the new CEO knows the company, its culture and peculiarities well already,” Frankfurt-based Commerzbank analyst Ingo-Martin Schachel said by e-mail . “The natural choice, in my view, would be Kaeser.” Kaeser, 56, joined Siemens in 1980, holding a series of administrative and financial jobs in a career that took him to Malaysia and California.