After the bailout, the cuts. The wind turbine manufacturer Siemens Gamesa, a subsidiary of Siemens Energy, will apply a cut of 436 million dollars (400 million euros) between now and 2026 to be able to return to profits that year after a long journey in the desert. This was announced by the company this Tuesday in Hamburg (Germany), where it held its investor day less than a week after the German State unveiled its financial support plan to keep the company afloat.
The objective of the cuts – of which the company has not clarified to what extent they will affect employment – is to “simplify and optimize the structure” of Gamesa, which they fully integrated into Siemens Energy less than a year ago through a takeover bid. The plans are, above all, to tackle the problems in onshore wind, where they are suffering the most problems. Also in traditional businesses (gas turbine manufacturing, networks and industrial transformation), which make money and in which margins, far from falling, continue to grow.
“The change of direction of Siemens Gamesa remains our top priority and we now have a defined path and an action plan,” underlined the company’s CEO, Christian Bruch. In the last fiscal year (from October to October), Siemens Energy lost almost 4.6 billion euros, six times more than in the same period in 2022. The bulk of that figure came from the Spanish wind turbine manufacturer, according to figures revealed to the market last Wednesday. A drain that, according to its financial director, Maria Ferraro, this Tuesday, it is “imperative” to close.
At the meeting with analysts, Siemens Energy has described as “serious setbacks” the problems that have arisen in Gamesa’s production lines, which have led to its rescue with 7.5 billion in public guarantees, and is confident of “profitable growth” from 2026. when it should reach the breakeven point. The company claims to have already “identified” the “deficiencies” in the turbines and is preparing “corrective measures.”
From now on, as revealed by the head of Siemens Gamesa, Jochen Eickholt, the company will focus on the most attractive market niches, avoiding any risk and betting on those in which the regulatory framework is more stable. They will also simplify your catalog as much as possible. And they will look for savings throughout the component supply chain, being particularly “selective” in their decisions and avoiding – unlike what has happened in the past – being “generous” with provisions that could end up taking their toll in the long run. Something that, in fact, has already happened. “In many cases, the standard approach to manufacturing was to do everything in-house, and I think there are times when that doesn’t make sense,” Eickholt added.
Navarre Warning
The Government of Navarra, together with the Basque Country, the autonomous community that has the most jobs in suspense, has stated through its Minister of Industry and Ecological Transition that “it will not accept the loss of a single job”, although without specifying how it will do it. “The company talks about the future, but, on the other hand, and despite the above, Siemens Gamesa announces a plan to reduce structural costs of 400 million euros, without giving more details about it,” complained the head of the company. portfolio, Mikel Irujo.
The concern among the company’s workers in Spain is important. Also in the Spanish Government, which when last week announced its willingness to participate in the rescue of Siemens Gamesa, stated that the future of the company is “a priority.” “It is a key company,” a spokesperson for the Ministry of Industry said at the time. “We are in continuous contact with the unions with the aim of protecting employment and the productive capacities of the different plants.” Then, cost cuts were feared. Today, they are already a fact.
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