Siemens Energy’s struggling wind unit eyes $436m in cost cuts
Siemens Gamesa, the struggling wind division of Germany’s Siemens Energy, plans to cut costs by around €400m (£349m) by 2026, the group said during its much-awaited capital markets day today.
The goal was to “simplify organisation and optimise overhead costs” while the Siemens Gamesa’s onshore wind turbine capacity is to be adjusted according to a refined product and market road map, according to presentation slides said.
Measures will include a review of its onshore product offering as well as the markets it is catering to, streamlining its service organisation as well as looking into supply chain partnerships, the company said.
“The turnaround of Siemens Gamesa remains our highest priority and we now have a defined path and action plan to reach break-even for the wind business in fiscal year 2026 and to return to profitability thereafter,” Siemens Energy chief executive Christian Bruch told analysts.
“We will be very strict with capital allocation.”
The comments come less than a week after Siemens Energy disclosed a €4.6bn loss due to Siemens Gamesa, where a mix of product quality issues and ramp-up problems have pushed a much-anticipated break-even out to 2026.
Siemens Energy also recently secured a €15bn guarantee package needed to safeguard its €112bn order book, an agreement that has caused the group’s shares to recover from a recent record low.
Commenting on the state of business at the outset of November, German chancellor Olaf Scholz said: “I am confident that we will find a good solution very soon if everyone fulfils their responsibilities now.”
Government officials have previously said the company is vital to Germany’s transition to green energy.
Siemens Gamesa, which has become a major burden for its parent, will also reduce the number of turbine variants it sells and pause any wind product initiatives in what it says are “adjacent fields”, singling out hydrogen.
Reuters – Danilo Masoni