tushar_16784
Tushar T
© Siemens Archives 2004
Company history
Beginnings and early development (1847 – 1865)
Werner Siemens – known as Werner von Siemens from 1888 when he was raised to the
nobility – was born in 1816 in Lenthe, near Hanover, Germany. As his family lacked the
resources to pay for a university education, he joined the Prussian army in 1835, where
he spent three years studying mathematics, physics, chemistry and ballistics at the
Artillery and Engineering Academy in Berlin.
Werner von Siemens was awarded his first Prussian patent in 1842 – for an electrolytic
method of gold and silver plating. His younger brother Wilhelm later marketed this
invention successfully in Britain.
In 1846, Werner von Siemens hit upon an idea for improving the Wheatstone telegraph.
Using just simple means – cigar boxes, tinplate, pieces of iron, and some insulated
copper wire – he designed his own pointer telegraph. He entrusted the apparatus‘
construction to a mechanical engineer, Johann Georg Halske, who was won over by its
simplicity and reliability. In Berlin in October 1847, the two men formed their own
company, Telegraphen-Bauanstalt von Siemens & Halske, and set up a small workshop
in a back building at 19 Schöneberger Strasse. A week after the company was founded,
the design of the pointer telegraph was awarded a patent in Prussia.
In 1847, Werner von Siemens developed a gutta percha press that made it possible to
create seamless insulation for copper wire. This and the pointer telegraph marked two
key advances on the road toward modern telecommunications. A year later, the
company received a government contract to install a telegraph line between Berlin and
Frankfurt/Main – the company’s first major success – and Siemens managed to
complete the line in time for the Prussian monarch’s election as Germany’s hereditary
emperor.
The lack of follow-up contracts from the Prussian state plunged the company into a crisis
during the early 1850s, but its fortunes turned when it received new orders from Russia
and Britain. In 1853, Siemens & Halske began building a telegraph network in Russia,
which stretched from Finland to the Crimea, covering a distance of around 10,000
kilometers. The company was also contracted by the Russian government to provide
maintenance services. In 1855, Werner von Siemens set up a subsidiary in St.
Petersburg, headed by his brother Carl.
At this time, business in Britain was gradually expanding under the management of
Werner’s brother Wilhelm, who later made England his home and changed his name to
Charles William Siemens. In 1858, the subsidiary Siemens, Halske & Co. (renamed
Siemens Brothers in 1865) was set up in Britain. The subsidiary’s operations centered
on the production and laying of submarine cables, which it began manufacturing at its
own cable plant at Woolwich on the River Thames in 1863.
Company welfare policy and international projects (1865 – 1890)
Werner von Siemens discovered the dynamo-electric principle in 1866. With the advent
of the dynamo, it became possible to generate and distribute electrical energy cost©
Siemens Archives 2004
2
effectively and in large quantities. Unlike others working in the same field at this time,
Werner von Siemens was quick to appreciate the economic significance of his
discovery. In 1867, Siemens secured the necessary patents in Germany and Britain to
enable the company to capitalize on its invention and then announced it to the world.
In the late 1870s, power engineering began to develop at breathtaking pace. In 1879,
the first electric railway was presented at the Berlin Trade Fair, and the first electric
street lighting was installed in Berlin; the first electric elevator was built in Mannheim in
1880; and the world’s first electric tramway went into service in Berlin-Lichterfelde in
1881.
Siemens & Halske’s activities in telegraphy entered a new phase of expansion in 1866.
Werner von Siemens had had a revolutionary idea to construct a telegraph line
reaching all the way from London to Calcutta. Dispatches would be transmitted by
means of induced current, fully automatically, and continuously. The company was
contracted to build large sections of the 11,000-kilometer line. On April 12, 1870, the
sensation was complete: In London, William Siemens demonstrated that it was
possible to exchange telegrams with Calcutta within the space of an hour. The laying of
ocean cables across the Atlantic, joining Europe and North America, by the Faraday, a
purpose-built cabling ship, marked a supreme technical accomplishment. The
continents were now joined by cables.
To bind qualified workers to the company and to secure a reliable employee base,
Siemens was quick to institute a variety of welfare measures. One of the most
prominent was the so-called stock-taking bonus, introduced to enable wage employees
to share in the company’s profits. In 1872, Werner von Siemens set up a pension fund
that included benefits for widows and orphans. In 1873, the company introduced the
nine-hour working day; this was subsequently shortened to an eight-and-a-half-hour
day in 1891. That same year, the company introduced apprentice training programs for
specific trades. These were followed in 1893 by programs focused on workers’ onward
training.
With time, Austria emerged as an important source of business alongside Russia and
Britain. In 1879, Siemens & Halske set up a subsidiary in the city of Vienna to develop
trade with countries in the southeast of Europe. Parallel efforts to gain a foothold in the
U.S. market, however, proved unsuccessful, and a U.S. subsidiary formed in 1892 had
to be closed down within a few years. Even so, Siemens & Halske’s foreign business
had reached such a volume that the company began setting up foreign agencies in all
its key markets during the 1870s.
The second generation (1890 – 1918)
Werner von Siemens retired from active management of the company in 1890. He was
succeeded by his sons Wilhelm and Arnold, who took over the leadership with their
uncle Carl. The company was re-formed as a stock corporation in 1897. This marked a
key step toward covering the company’s growing capital requirements.
In 1903, Siemens & Halske acquired the company Elektrizitäts-Aktiengesellschaft
vorm. Schuckert & Co., merging it with its own power engineering unit to form
Siemens-Schuckertwerke GmbH. Advances in electrical engineering over the years
had spawned new areas of activity parallel to the two parent companies’ traditional
© Siemens Archives 2004
3
power engineering and communications engineering businesses, and the purpose of
the new company was to cover all areas of electrical engineering.
Also in 1903, Siemens and AEG co-founded Gesellschaft für drahtlose Telegraphie
System Telefunken, which specialized in developing the new field of radio.
Siemens’ expansion eventually necessitated concentrating manufacturing and
administration at a single, large-scale location. The company therefore purchased the
Nonnenwiesen, a green-field site in the northwest of Berlin, in 1897. By 1899, the
Westend cable factory was in operation, and by 1913 all company activities had been
relocated to the new campus known as Siemensstadt.
One interesting innovation to emerge in connection with the creation of the new
industrial park was the parallel development of an area of workers’ housing, complete
with the requisite infrastructure. By 1914, Siemensstadt’s population had reached
7,000. This and the fact that more than 20,000 people worked there made the provision
of public transport essential.
The company also recorded several notable technological achievements in the field of
rail transport. In Budapest, it built continental Europe’s first underground rail line, which
took just two years to complete and opened in May 1896. In 1903, a high-speed
locomotive developed by Siemens set a new world speed record of 210 km/h. The
most prominent achievement in telecommunications engineering during this era came
with the commissioning of the first metropolitan automatic telephone exchange, which
was built in Munich’s Schwabing district in 1909 and had a capacity of 2,500 line units.
By fiscal 1914, Siemens had a worldwide workforce of 82,000 employees, of whom a
quarter worked outside Germany, and the company had become one of the world’s
foremost players in its industry. The outbreak of World War I caught Germany’s
electrical industry entirely unprepared and had a substantial and lasting impact on its
global standing. Siemens’ markets collapsed, and the majority of its foreign
subsidiaries were expropriated.
A period of transition (1918 – 1933)
Carl Friedrich von Siemens, Werner von Siemens’ youngest son, took over as “Head of
the House” following the deaths of his brothers Arnold and Wilhelm in 1918 and 1919,
respectively. He continued to head the company until his death in 1941.
Through World War I, Siemens had lost 40 percent of its capital. Most of its foreign
assets and almost all of its patent rights had been expropriated. The most urgent tasks
in the immediate postwar years were to reorganize the company’s expanding
manufacturing operations and to revitalize foreign business.
One of Carl Friedrich von Siemens’ policies was to service the whole of the field of
electrical engineering but to assign individual areas of business to specialized
subsidiaries and related companies.
For example, Siemens, AEG and Auer-Gesellschaft merged their incandescent lamp
businesses in a joint venture, Osram GmbH; Siemens-Elektrowärme GmbH specialized
in the manufacture of household appliances and heaters; Siemens & Halske AG’s
Electrical Railways Division became Siemens Bauunion; and Siemens-Reiniger-Werke
© Siemens Archives 2004
4
AG was responsible for producing electrical medical equipment. The formation of
Siemens Planiawerke AG led to the creation of Europe’s largest factory for the
manufacture of carbon electrodes.
Each of the spun-off and newly formed companies maintained recognizable ties with
their corporate parent. One important factor here was a consistent corporate identity
that helped underscore their common origins. In the 1930s, Hans Domizlaff established
a unified approach to advertising and consistent company-wide branding.
Partly under the influence of Carl Köttgen, manufacturing was reorganized around
assembly lines. This tapped considerable potential for rationalization and ensured that
production remained cost-efficient.
In the 1920s, Siemens-Schuckertwerke GmbH received the largest foreign contract
awarded to any German company since the turn of the century when it was hired to
build a power plant on the Shannon River. The power generated by the facility was
used to electrify the whole of Irish Free State. In 1923, Siemens-Schuckertwerke
GmbH and Japan’s Furukawa group launched a joint venture, Fusi Denki Seizo KK, to
manufacture electrical products in Japan.
When the state and employers began officially to recognize trade unions, it paved the
way for a new company welfare policy. The primary focus of policy was on the
provision of retirement benefits, an issue that Werner von Siemens had originally
addressed in 1872 with the formation of a pension fund. Besides reintroducing a yearend
annual bonus in 1927, the company also implemented a corporate housing
initiative, began offering rest and recovery programs in company-owned facilities, and
provided support for employees’ leisure activities.
The National Socialist war economy (1933 – 1945)
From 1933, National Socialist economic policy pursued two primary goals: combating
unemployment and “militarization of the German economy.” With these objectives in
mind, a four-year plan was instituted in 1936 to ready the economy and the armed
forces for war within the space of a few years. Like other sectors, the electrical industry
received an increasing number of orders from public offices and was drawn into the
program of war preparations. This marked the onset of a phase of rapid growth that
continued through to the end of World War II.
Following its invasion of Poland in 1939, Germany embarked on a gradual transition to
a war economy. The state restricted and even prohibited the production of certain
civilian goods and requisites, and military conscription led to a widening shortage of
labor.
Increasingly, foreign civilians – men and women – were employed in manufacturing.
Initially, they chose to work of their own free will. Later, though, many were forced into
labor. They worked throughout German industry – in the manufacturing sector, in public
services, and in agriculture. By the winter of 1941-42, the German economy had
become entirely dependent on forced labor.
In late 1944, at the height of World War II, Siemens’ total workforce of 244,000
included some 50,000 people who had been put to work against their will. The overall
© Siemens Archives 2004
5
number of men and women who served as forced labor at Siemens during the war
years was, however, higher.
During the final years of the war, numerous plants and factories in Berlin and other
major cities were destroyed by Allied air raids. Manufacturing was therefore moved to
alternative places and regions not affected by the air war. The goal was to secure
continued production of important war-related and everyday goods. According to
records, Siemens was operating almost 400 alternative or relocated manufacturing
plants at the end of 1944 and in early 1945.
Germany’s political, military and economic collapse led to the closure of Siemens’
plants in Berlin on April 20, 1945. By the time the war came to an end, the greater part
of Siemens’ buildings and industrial installations had been completely destroyed. The
company’s overall losses resulting from World War II amounted 2.58 billion
reichsmarks – four-fifths of its total assets.
Postwar reconstruction and emergence as a global player (1945 – 1966)
In the aftermath of the war’s destruction and the dismantling of industrial installations,
Siemens’ postwar reconstruction began in earnest in 1946 with initial manufacturing
programs for public services and utilities, such as the rail network, the postal service,
and power generation. Siemens’ workforce had already grown to around 40,000 by the
end of 1945. Besides cleanup and reconstruction tasks, Siemens’ employees were
assigned to the makeshift manufacture of daily-use objects, such as coal shovels,
cooking pots, and stoves.
During the final months of the war, Siemens had set up so-called Group Directorates in
the south and the west of Germany. Acting more or less independently of company
headquarters in Berlin, these directorates began rebuilding the company. Siemens &
Halske in Munich and Siemens-Schuckertwerke, based in Hof initially and later
headquartered in Erlangen and Mülheim/Ruhr, took care of the company’s interests.
Due the uncertainty of the political situation in Berlin, it was decided in April 1949 to
relocate the Siemens companies’ headquarters. Siemens & Halske moved to Munich,
and Siemens-Schuckertwerke moved to Erlangen. In both cases, secondary company
headquarters were retained in Berlin.
Although domestic business gradually began to recover, sales outside Germany
remained negligible. This situation only began to change in 1955, once the company
had succeeded in reacquiring its expropriated foreign companies and the rights of
ownership to its patents and trademarks. The company was then able to set up a new
sales and marketing system and to begin forming new companies.
Prominent examples of Siemens’ expanding export business include the 300MW San
Nicolás power plant in Argentina, completed in 1956, and the installation of a
nationwide telecommunication network in Saudi Arabia. The company also reestablished
its ties with Fusi Denki Seizo KK in Japan and with Westinghouse in the
United States. By the mid-1960s, Siemens had succeeded in regaining its former
standing in world markets.
Having already succeeded in producing high-purity silicon, a crucial material in the
manufacture of microelectronics, in 1953, Siemens in 1965 presented Europe’s first
© Siemens Archives 2004
6
mass-produced integrated circuit – a key technology in many areas of modern
engineering and a major driver of innovation.
Housing construction became an important focus of company welfare policy. Traunreut,
an entirely new town, was created in 1951. Just a few years later, Siemens built the first
three high-rise residential buildings in Bavaria on the company housing estate in Munich.
Also during the 1950s, the company began setting up its own apprentice workshops and
vocational schools offering a core instruction program, plus master courses. These were
complemented through the addition of company training centers from 1971 onwards.
United under a single roof (1966 – 1989)
One of the most important milestones in the company’s history came in 1966, when
Siemens & Halske AG, Siemens-Schuckertwerke AG and Siemens-Reiniger-Werke AG
pooled their activities and merged to form Siemens AG. Prompted by the growing
convergence of the power engineering and communications engineering sectors, the
move helped to build a stronger position for Siemens in the global marketplace.
At the same time, the newly formed company was structured specifically to meet the
requirements of the technology sector and its target markets. In 1969 the technical
business units were consolidated into six operating groups: Components, Data
Systems, Power Engineering, Electrical Installations, Medical Engineering, and
Telecommunications. At the time the company had over 270,000 employees worldwide
and annual sales of more than DM10 billion.
A number of company units were managed as independent legal units, including
Bosch-Siemens Hausgeräte GmbH, formed in 1967, and Kraftwerk Union AG (KWU),
set up as a subsidiary of Siemens and AEG in 1969 to pool the two companies’ power
plant construction activities (Siemens later took over KWU completely in 1977).
Siemens also engaged in numerous business partnerships with foreign companies,
including Allis-Chalmers Corporation in 1978.
In 1969, Siemens for the first time made shares available to company employees at a
preferential price. These were common shares, subject to a legally prescribed lockup
period of five years.
A keen sponsor of cultural activities, Siemens supports art projects through a number
of foundations and through the Siemens Arts Program, launched in 1987. The latter
focuses mainly on promoting projects that advance contemporary art and on bringing
art to a wider audience within the company.
Stepping into the third millennium (1989 – 2003)
The organizational structure established in 1969 remained in place for 20 years and
governed how the company operated until the beginning of fiscal 1990, when Siemens
was comprehensively reorganized. The primary objective of the new round of
restructuring was to divide the company’s large business units into smaller entities that
would be better equipped to operate successfully in what was becoming an
increasingly complex global marketplace.
© Siemens Archives 2004
7
Siemens also continued to adjust its portfolio: 1990 saw the creation of the largest
European company in the computer industry, Siemens-Nixdorf Informationssysteme
AG (SNI), which in 1999 formed part of Fujitsu Siemens Computers AG. Siemens was
able to further enhance its standing as an IT world market leader through the
acquisition of Plessey in Britain in 1991 and Rolm in the United States in 1992.
In the U.S., Siemens also acquired Westinghouse’s fossil power plant activities in 1998
with the goal of boosting earnings in the power generation sector through an increased
business volume and extensive synergy benefits. In an effort to build a stronger
position in the U.S., the world’s largest market for electrical and electronic products,
Siemens successfully obtained a listing on the New York stock exchange in 2001.
The opening of Central and Eastern Europe created the right conditions for a further
push to expand Siemens’ business activities. This began with industrial and building
systems and medical equipment, but gradually expanded to encompass other
segments, above all telecommunications, environmental protection, and transportation
systems. Asia-Pacific, too, which today is experiencing a period of exceptionally
dynamic growth, became a key market for Siemens. All of the company’s operating
groups are active in the region.
In recent years, Siemens has taken targeted steps to optimize its business portfolio
through disinvestments, acquisitions, the formation of new companies, and the
founding of joint ventures. Besides the deconsolidation of Epcos AG in 1999, these
steps included the acquisition of a majority stake in Atecs Mannesmann AG, and the
merging of Siemens’ nuclear activities with Framatome’s, both in 2001.
To raise employee qualification and motivation levels through greater empowerment
and involvement in business processes, Siemens in 1993 launched its time optimized
processes initiative, better known as top. In 1998, top was upgraded through the
addition of specific management instruments to create top+.
The SiemensForums at a number of Siemens locations provide a valuable interface
through which the company communicates with society. In keeping with their motto,
“Talk to each other,” the Forums seek actively to promote a dialogue with the public on
a range of issues of relevance for society.
Siemens’ history of more than 155 years reveals how visions can become reality. Since
its founder years under Werner von Siemens, a visionary inventor and entrepreneur
who made an enormous contribution to technological progress in the nineteenth
century, the company has grown into a GLOBAL NETWORK OF INNOVATION uniting more
than 400,000 people in over 190 of the world’s countries.
Company history
Beginnings and early development (1847 – 1865)
Werner Siemens – known as Werner von Siemens from 1888 when he was raised to the
nobility – was born in 1816 in Lenthe, near Hanover, Germany. As his family lacked the
resources to pay for a university education, he joined the Prussian army in 1835, where
he spent three years studying mathematics, physics, chemistry and ballistics at the
Artillery and Engineering Academy in Berlin.
Werner von Siemens was awarded his first Prussian patent in 1842 – for an electrolytic
method of gold and silver plating. His younger brother Wilhelm later marketed this
invention successfully in Britain.
In 1846, Werner von Siemens hit upon an idea for improving the Wheatstone telegraph.
Using just simple means – cigar boxes, tinplate, pieces of iron, and some insulated
copper wire – he designed his own pointer telegraph. He entrusted the apparatus‘
construction to a mechanical engineer, Johann Georg Halske, who was won over by its
simplicity and reliability. In Berlin in October 1847, the two men formed their own
company, Telegraphen-Bauanstalt von Siemens & Halske, and set up a small workshop
in a back building at 19 Schöneberger Strasse. A week after the company was founded,
the design of the pointer telegraph was awarded a patent in Prussia.
In 1847, Werner von Siemens developed a gutta percha press that made it possible to
create seamless insulation for copper wire. This and the pointer telegraph marked two
key advances on the road toward modern telecommunications. A year later, the
company received a government contract to install a telegraph line between Berlin and
Frankfurt/Main – the company’s first major success – and Siemens managed to
complete the line in time for the Prussian monarch’s election as Germany’s hereditary
emperor.
The lack of follow-up contracts from the Prussian state plunged the company into a crisis
during the early 1850s, but its fortunes turned when it received new orders from Russia
and Britain. In 1853, Siemens & Halske began building a telegraph network in Russia,
which stretched from Finland to the Crimea, covering a distance of around 10,000
kilometers. The company was also contracted by the Russian government to provide
maintenance services. In 1855, Werner von Siemens set up a subsidiary in St.
Petersburg, headed by his brother Carl.
At this time, business in Britain was gradually expanding under the management of
Werner’s brother Wilhelm, who later made England his home and changed his name to
Charles William Siemens. In 1858, the subsidiary Siemens, Halske & Co. (renamed
Siemens Brothers in 1865) was set up in Britain. The subsidiary’s operations centered
on the production and laying of submarine cables, which it began manufacturing at its
own cable plant at Woolwich on the River Thames in 1863.
Company welfare policy and international projects (1865 – 1890)
Werner von Siemens discovered the dynamo-electric principle in 1866. With the advent
of the dynamo, it became possible to generate and distribute electrical energy cost©
Siemens Archives 2004
2
effectively and in large quantities. Unlike others working in the same field at this time,
Werner von Siemens was quick to appreciate the economic significance of his
discovery. In 1867, Siemens secured the necessary patents in Germany and Britain to
enable the company to capitalize on its invention and then announced it to the world.
In the late 1870s, power engineering began to develop at breathtaking pace. In 1879,
the first electric railway was presented at the Berlin Trade Fair, and the first electric
street lighting was installed in Berlin; the first electric elevator was built in Mannheim in
1880; and the world’s first electric tramway went into service in Berlin-Lichterfelde in
1881.
Siemens & Halske’s activities in telegraphy entered a new phase of expansion in 1866.
Werner von Siemens had had a revolutionary idea to construct a telegraph line
reaching all the way from London to Calcutta. Dispatches would be transmitted by
means of induced current, fully automatically, and continuously. The company was
contracted to build large sections of the 11,000-kilometer line. On April 12, 1870, the
sensation was complete: In London, William Siemens demonstrated that it was
possible to exchange telegrams with Calcutta within the space of an hour. The laying of
ocean cables across the Atlantic, joining Europe and North America, by the Faraday, a
purpose-built cabling ship, marked a supreme technical accomplishment. The
continents were now joined by cables.
To bind qualified workers to the company and to secure a reliable employee base,
Siemens was quick to institute a variety of welfare measures. One of the most
prominent was the so-called stock-taking bonus, introduced to enable wage employees
to share in the company’s profits. In 1872, Werner von Siemens set up a pension fund
that included benefits for widows and orphans. In 1873, the company introduced the
nine-hour working day; this was subsequently shortened to an eight-and-a-half-hour
day in 1891. That same year, the company introduced apprentice training programs for
specific trades. These were followed in 1893 by programs focused on workers’ onward
training.
With time, Austria emerged as an important source of business alongside Russia and
Britain. In 1879, Siemens & Halske set up a subsidiary in the city of Vienna to develop
trade with countries in the southeast of Europe. Parallel efforts to gain a foothold in the
U.S. market, however, proved unsuccessful, and a U.S. subsidiary formed in 1892 had
to be closed down within a few years. Even so, Siemens & Halske’s foreign business
had reached such a volume that the company began setting up foreign agencies in all
its key markets during the 1870s.
The second generation (1890 – 1918)
Werner von Siemens retired from active management of the company in 1890. He was
succeeded by his sons Wilhelm and Arnold, who took over the leadership with their
uncle Carl. The company was re-formed as a stock corporation in 1897. This marked a
key step toward covering the company’s growing capital requirements.
In 1903, Siemens & Halske acquired the company Elektrizitäts-Aktiengesellschaft
vorm. Schuckert & Co., merging it with its own power engineering unit to form
Siemens-Schuckertwerke GmbH. Advances in electrical engineering over the years
had spawned new areas of activity parallel to the two parent companies’ traditional
© Siemens Archives 2004
3
power engineering and communications engineering businesses, and the purpose of
the new company was to cover all areas of electrical engineering.
Also in 1903, Siemens and AEG co-founded Gesellschaft für drahtlose Telegraphie
System Telefunken, which specialized in developing the new field of radio.
Siemens’ expansion eventually necessitated concentrating manufacturing and
administration at a single, large-scale location. The company therefore purchased the
Nonnenwiesen, a green-field site in the northwest of Berlin, in 1897. By 1899, the
Westend cable factory was in operation, and by 1913 all company activities had been
relocated to the new campus known as Siemensstadt.
One interesting innovation to emerge in connection with the creation of the new
industrial park was the parallel development of an area of workers’ housing, complete
with the requisite infrastructure. By 1914, Siemensstadt’s population had reached
7,000. This and the fact that more than 20,000 people worked there made the provision
of public transport essential.
The company also recorded several notable technological achievements in the field of
rail transport. In Budapest, it built continental Europe’s first underground rail line, which
took just two years to complete and opened in May 1896. In 1903, a high-speed
locomotive developed by Siemens set a new world speed record of 210 km/h. The
most prominent achievement in telecommunications engineering during this era came
with the commissioning of the first metropolitan automatic telephone exchange, which
was built in Munich’s Schwabing district in 1909 and had a capacity of 2,500 line units.
By fiscal 1914, Siemens had a worldwide workforce of 82,000 employees, of whom a
quarter worked outside Germany, and the company had become one of the world’s
foremost players in its industry. The outbreak of World War I caught Germany’s
electrical industry entirely unprepared and had a substantial and lasting impact on its
global standing. Siemens’ markets collapsed, and the majority of its foreign
subsidiaries were expropriated.
A period of transition (1918 – 1933)
Carl Friedrich von Siemens, Werner von Siemens’ youngest son, took over as “Head of
the House” following the deaths of his brothers Arnold and Wilhelm in 1918 and 1919,
respectively. He continued to head the company until his death in 1941.
Through World War I, Siemens had lost 40 percent of its capital. Most of its foreign
assets and almost all of its patent rights had been expropriated. The most urgent tasks
in the immediate postwar years were to reorganize the company’s expanding
manufacturing operations and to revitalize foreign business.
One of Carl Friedrich von Siemens’ policies was to service the whole of the field of
electrical engineering but to assign individual areas of business to specialized
subsidiaries and related companies.
For example, Siemens, AEG and Auer-Gesellschaft merged their incandescent lamp
businesses in a joint venture, Osram GmbH; Siemens-Elektrowärme GmbH specialized
in the manufacture of household appliances and heaters; Siemens & Halske AG’s
Electrical Railways Division became Siemens Bauunion; and Siemens-Reiniger-Werke
© Siemens Archives 2004
4
AG was responsible for producing electrical medical equipment. The formation of
Siemens Planiawerke AG led to the creation of Europe’s largest factory for the
manufacture of carbon electrodes.
Each of the spun-off and newly formed companies maintained recognizable ties with
their corporate parent. One important factor here was a consistent corporate identity
that helped underscore their common origins. In the 1930s, Hans Domizlaff established
a unified approach to advertising and consistent company-wide branding.
Partly under the influence of Carl Köttgen, manufacturing was reorganized around
assembly lines. This tapped considerable potential for rationalization and ensured that
production remained cost-efficient.
In the 1920s, Siemens-Schuckertwerke GmbH received the largest foreign contract
awarded to any German company since the turn of the century when it was hired to
build a power plant on the Shannon River. The power generated by the facility was
used to electrify the whole of Irish Free State. In 1923, Siemens-Schuckertwerke
GmbH and Japan’s Furukawa group launched a joint venture, Fusi Denki Seizo KK, to
manufacture electrical products in Japan.
When the state and employers began officially to recognize trade unions, it paved the
way for a new company welfare policy. The primary focus of policy was on the
provision of retirement benefits, an issue that Werner von Siemens had originally
addressed in 1872 with the formation of a pension fund. Besides reintroducing a yearend
annual bonus in 1927, the company also implemented a corporate housing
initiative, began offering rest and recovery programs in company-owned facilities, and
provided support for employees’ leisure activities.
The National Socialist war economy (1933 – 1945)
From 1933, National Socialist economic policy pursued two primary goals: combating
unemployment and “militarization of the German economy.” With these objectives in
mind, a four-year plan was instituted in 1936 to ready the economy and the armed
forces for war within the space of a few years. Like other sectors, the electrical industry
received an increasing number of orders from public offices and was drawn into the
program of war preparations. This marked the onset of a phase of rapid growth that
continued through to the end of World War II.
Following its invasion of Poland in 1939, Germany embarked on a gradual transition to
a war economy. The state restricted and even prohibited the production of certain
civilian goods and requisites, and military conscription led to a widening shortage of
labor.
Increasingly, foreign civilians – men and women – were employed in manufacturing.
Initially, they chose to work of their own free will. Later, though, many were forced into
labor. They worked throughout German industry – in the manufacturing sector, in public
services, and in agriculture. By the winter of 1941-42, the German economy had
become entirely dependent on forced labor.
In late 1944, at the height of World War II, Siemens’ total workforce of 244,000
included some 50,000 people who had been put to work against their will. The overall
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number of men and women who served as forced labor at Siemens during the war
years was, however, higher.
During the final years of the war, numerous plants and factories in Berlin and other
major cities were destroyed by Allied air raids. Manufacturing was therefore moved to
alternative places and regions not affected by the air war. The goal was to secure
continued production of important war-related and everyday goods. According to
records, Siemens was operating almost 400 alternative or relocated manufacturing
plants at the end of 1944 and in early 1945.
Germany’s political, military and economic collapse led to the closure of Siemens’
plants in Berlin on April 20, 1945. By the time the war came to an end, the greater part
of Siemens’ buildings and industrial installations had been completely destroyed. The
company’s overall losses resulting from World War II amounted 2.58 billion
reichsmarks – four-fifths of its total assets.
Postwar reconstruction and emergence as a global player (1945 – 1966)
In the aftermath of the war’s destruction and the dismantling of industrial installations,
Siemens’ postwar reconstruction began in earnest in 1946 with initial manufacturing
programs for public services and utilities, such as the rail network, the postal service,
and power generation. Siemens’ workforce had already grown to around 40,000 by the
end of 1945. Besides cleanup and reconstruction tasks, Siemens’ employees were
assigned to the makeshift manufacture of daily-use objects, such as coal shovels,
cooking pots, and stoves.
During the final months of the war, Siemens had set up so-called Group Directorates in
the south and the west of Germany. Acting more or less independently of company
headquarters in Berlin, these directorates began rebuilding the company. Siemens &
Halske in Munich and Siemens-Schuckertwerke, based in Hof initially and later
headquartered in Erlangen and Mülheim/Ruhr, took care of the company’s interests.
Due the uncertainty of the political situation in Berlin, it was decided in April 1949 to
relocate the Siemens companies’ headquarters. Siemens & Halske moved to Munich,
and Siemens-Schuckertwerke moved to Erlangen. In both cases, secondary company
headquarters were retained in Berlin.
Although domestic business gradually began to recover, sales outside Germany
remained negligible. This situation only began to change in 1955, once the company
had succeeded in reacquiring its expropriated foreign companies and the rights of
ownership to its patents and trademarks. The company was then able to set up a new
sales and marketing system and to begin forming new companies.
Prominent examples of Siemens’ expanding export business include the 300MW San
Nicolás power plant in Argentina, completed in 1956, and the installation of a
nationwide telecommunication network in Saudi Arabia. The company also reestablished
its ties with Fusi Denki Seizo KK in Japan and with Westinghouse in the
United States. By the mid-1960s, Siemens had succeeded in regaining its former
standing in world markets.
Having already succeeded in producing high-purity silicon, a crucial material in the
manufacture of microelectronics, in 1953, Siemens in 1965 presented Europe’s first
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mass-produced integrated circuit – a key technology in many areas of modern
engineering and a major driver of innovation.
Housing construction became an important focus of company welfare policy. Traunreut,
an entirely new town, was created in 1951. Just a few years later, Siemens built the first
three high-rise residential buildings in Bavaria on the company housing estate in Munich.
Also during the 1950s, the company began setting up its own apprentice workshops and
vocational schools offering a core instruction program, plus master courses. These were
complemented through the addition of company training centers from 1971 onwards.
United under a single roof (1966 – 1989)
One of the most important milestones in the company’s history came in 1966, when
Siemens & Halske AG, Siemens-Schuckertwerke AG and Siemens-Reiniger-Werke AG
pooled their activities and merged to form Siemens AG. Prompted by the growing
convergence of the power engineering and communications engineering sectors, the
move helped to build a stronger position for Siemens in the global marketplace.
At the same time, the newly formed company was structured specifically to meet the
requirements of the technology sector and its target markets. In 1969 the technical
business units were consolidated into six operating groups: Components, Data
Systems, Power Engineering, Electrical Installations, Medical Engineering, and
Telecommunications. At the time the company had over 270,000 employees worldwide
and annual sales of more than DM10 billion.
A number of company units were managed as independent legal units, including
Bosch-Siemens Hausgeräte GmbH, formed in 1967, and Kraftwerk Union AG (KWU),
set up as a subsidiary of Siemens and AEG in 1969 to pool the two companies’ power
plant construction activities (Siemens later took over KWU completely in 1977).
Siemens also engaged in numerous business partnerships with foreign companies,
including Allis-Chalmers Corporation in 1978.
In 1969, Siemens for the first time made shares available to company employees at a
preferential price. These were common shares, subject to a legally prescribed lockup
period of five years.
A keen sponsor of cultural activities, Siemens supports art projects through a number
of foundations and through the Siemens Arts Program, launched in 1987. The latter
focuses mainly on promoting projects that advance contemporary art and on bringing
art to a wider audience within the company.
Stepping into the third millennium (1989 – 2003)
The organizational structure established in 1969 remained in place for 20 years and
governed how the company operated until the beginning of fiscal 1990, when Siemens
was comprehensively reorganized. The primary objective of the new round of
restructuring was to divide the company’s large business units into smaller entities that
would be better equipped to operate successfully in what was becoming an
increasingly complex global marketplace.
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Siemens also continued to adjust its portfolio: 1990 saw the creation of the largest
European company in the computer industry, Siemens-Nixdorf Informationssysteme
AG (SNI), which in 1999 formed part of Fujitsu Siemens Computers AG. Siemens was
able to further enhance its standing as an IT world market leader through the
acquisition of Plessey in Britain in 1991 and Rolm in the United States in 1992.
In the U.S., Siemens also acquired Westinghouse’s fossil power plant activities in 1998
with the goal of boosting earnings in the power generation sector through an increased
business volume and extensive synergy benefits. In an effort to build a stronger
position in the U.S., the world’s largest market for electrical and electronic products,
Siemens successfully obtained a listing on the New York stock exchange in 2001.
The opening of Central and Eastern Europe created the right conditions for a further
push to expand Siemens’ business activities. This began with industrial and building
systems and medical equipment, but gradually expanded to encompass other
segments, above all telecommunications, environmental protection, and transportation
systems. Asia-Pacific, too, which today is experiencing a period of exceptionally
dynamic growth, became a key market for Siemens. All of the company’s operating
groups are active in the region.
In recent years, Siemens has taken targeted steps to optimize its business portfolio
through disinvestments, acquisitions, the formation of new companies, and the
founding of joint ventures. Besides the deconsolidation of Epcos AG in 1999, these
steps included the acquisition of a majority stake in Atecs Mannesmann AG, and the
merging of Siemens’ nuclear activities with Framatome’s, both in 2001.
To raise employee qualification and motivation levels through greater empowerment
and involvement in business processes, Siemens in 1993 launched its time optimized
processes initiative, better known as top. In 1998, top was upgraded through the
addition of specific management instruments to create top+.
The SiemensForums at a number of Siemens locations provide a valuable interface
through which the company communicates with society. In keeping with their motto,
“Talk to each other,” the Forums seek actively to promote a dialogue with the public on
a range of issues of relevance for society.
Siemens’ history of more than 155 years reveals how visions can become reality. Since
its founder years under Werner von Siemens, a visionary inventor and entrepreneur
who made an enormous contribution to technological progress in the nineteenth
century, the company has grown into a GLOBAL NETWORK OF INNOVATION uniting more
than 400,000 people in over 190 of the world’s countries.