Siemens Unveils Restructuring Plan to Boost Profitability through Integrated Automation
Siemens AG is embarking on a major restructuring effort to boost profitability by integrating its digital and real-world products. The German industrial giant's CEO, Roland Busch, wants to create a single touchpoint for manufacturing clients like Boeing Co. and Volkswagen AG to bundle different needs.
The revamp involves combining four units within the top division, Digital Industries, into a single automation business starting October 1. This move aims to extract more value from software and AI layered onto Siemens hardware.
Siemens' push into industrial AI has made it one of Germany's most valuable corporations, but its margins still trail European competitors. To close the gap, Busch is investing in software firms Altair and Dotmatics and building an AI hub in Seattle led by former Amazon Web Services executive Vasi Philomin.
The effort to simplify Siemens' structure has already changed how investors view the company. Analyst Andre Kukhnin estimates that the valuation discount investors once applied due to its tangled structure has shrunk from 50% to 10-15%.