Count on “US”
Who is driving the restructuring of Europe — its corporate managers or U.S. capital markets?
February 8, 2000
For quite a few years, Siemens — one of Germany’s top industrial conglomerates — struggled to get financial markets to believe it was serious about turning around its sagging business fortunes. But judging by the recent performance of its stock, Siemens’s strategy is finally working. Since the beginning of 1999, its shares have almost doubled on the Deutsche Börse — and tripled on the New York Stock Exchange.
Still, Siemens has a long way to go to catch up to General Electric, its U.S. counterpart. While GE’s Jack Welch earned the nickname “Neutron Jack” by cutting staff, moving operations overseas and cutting whole product lines, Siemens undertook its restructuring at a far more leisurely (and far less painful) pace.
Yet, as GE’s success seems to indicate, the secret behind a restructuring is to focus on U.S. markets. At least that is the impression of many top stock analysts, who believe that Siemens has to strengthen its position in the United States.
Given the title of the company’s latest annual report, it seems more than possible that the company’s managers have taken this advice a little too far. In type that completely dominates the cover, the title screams out “Count on us …”
For half a moment, we thought “us” was “U.S.” — that Siemens was using its annual report to pledge allegiance to U.S. product and capital markets. Only then did we realize that the company probably had something more aspirational in mind. That is, it was really saying “Count on Siemens” — a straightforward attempt to communicate accountability to its shareholders. Whether it intended this double entendre or not, Siemens will probably have to make good on both promises anyway.