Author: Jules Gray
15 Aug 2013
The first senior executive to be externally appointed at German conglomerate Siemens in its 160-year history, Peter Löscher joined the company in 2007. However, after a series of disagreements with the board, Löscher was relieved of his duties in July, to be replaced by Joe Kaeser. Löscher took on a role at a company engulfed in scandal, but was criticised for his overly ambitious plans for the firm.
The Austrian-born executive studied at Gymnasium Villach in his homeland in 1978, before completing a master’s degree at the Vienna University of Economics and Business Administration. He went on to briefly study at the Chinese University of Hong Kong and undertook the Advanced Management Program at Harvard University. His extensive studies across the globe have been enhanced by his considerable language skills – he is fluent in German, English, Spanish, French and Japanese.
In 1988, Löscher joined German pharmaceutical firm Hoechst, where he worked across many of the company’s operations in Spain, the UK, the US and Japan. A brief period at UK firm Amersham in 2002 led to the company being bought by General Electric, before he was appointed to the executive board of US pharmaceutical giant Merck in 2006.
Löscher was brought in in 2006, replacing outgoing CEO Klaus Kleinfeld. Described by Siemens chairmen Gerhard Cromme as “an exceptional individual for the office of president and CEO”.
He agreed to a series of pay-outs to regulators for a set of scandals the firm had become entwined in, including $1.34bn to regulators over the bribery allegations, while it was fined €396m by the European Commission for price fixing in 2007. Löscher was praised for his decisive action in dealing with the scandals, and eagerness to steer the company away from them. He fostered a better relationship with the unions than his predecessor, while he decided to invest heavily in new technologies. He also set the company a €100bn revenue target for the middle of the decade, which some thought was unrealistic given that 2012 saw €78.3bn.
However, the company’s fortunes have failed to improve in recent years, with a number of profit warnings leading to criticism of Löscher’s strategy over the last six years. During his tenure, Löscher cut profit forecasts five times, while he recently said it would be unlikely to meet a 12 percent profit margin. Heavily investing in solar technology under Löscher, the company is thought to have lost as much as €1bn after the solar division was closed. He was also strongly criticised for paying €7bn for medical diagnostics firm Dade Behring, which observers said was vastly overpriced.
This all came to a head in late July, when he was sacked through a press release, after a board meeting. Just a few days before, Löscher had spoken of his expectation that he would remain in charge, telling German newspaper Sueddeutsche Zeitung: “I have a contract until 2017 and Siemens more than ever needs a captain.” Despite his fall from grace, Löscher is expected to receive a $100m pay off for the remainder of his contract, which ran until 2017.