Alstom - Siemens and Alstom join forces to create a European Champion in Mobility
http://www.alstom.com/press-centre/...es-to-create-a-european-champion-in-mobility/
- 2017-09-26
There is an identical post on the Siemens site.
The above suggests that the changes arising from a successful conclusion will become more apparent in 2021/2022.
The EUR 470 mm is quite a large sum to take out of the existing businesses - such cost savings are not normally achieved. The figure implies that the redundancies could be somewhere around 2000 and upwards to start with.
This is the second-best option for Siemens:
- There is a higher degree of over-lap - as stated above,
- Alstom has a large cash pile, a large part of which will be distributed as dividends to existing shareholders, but it's operating margins are very low - at about 5.6%. That implies that there will be a lot of effort needed to get the Alstom operations up to Siemens standards and the projected margin for the new business of 8%. There is no doubt going to be a lot of friction with the unions in the Alstom operations over any re-organisation, rationalisation, and efficiencies besides that coming over the next few days/weeks.
- Very different work cultures; Siemens has a greater degree of similarities with BT.
- Almost certainly politics and statesmanship was a significant factor in this outcome, rather than commercial rational.
- Not sure that it builds the Digital/Signalling side of the business to the extent that would have be achievable via a merger with Bombardier.
- Leaves the French with the control of the vehicle manufacturing business which Siemens was looking to largely contract-out and/or relocate to Poland. This will cause difficulties down the line both political and on product pricing against other manufactures such as Hitachi and the Chinese.
- The senior management are now going to be tied-up with merger issues for about 18 to 24 months for starters, so they will not be fully focused during that time - a common feature of large mergers.