Siemens Energy has been facing financial challenges due to the troubles at its turbine business Siemens Gamesa. The company has warned of a loss of €4.5bn from its ailing wind turbine division. The troubles at Siemens Gamesa have already wiped more than €6bn off the value of the company. The company has also warned of significantly higher costs, potentially above €1bn, following a review into failure rates of wind turbine components. Siemens Energy’s results of the third quarter were impacted by charges at Siemens Gamesa. These relate mainly to quality issues of certain onshore platforms as well as increased product costs and ramp-up challenges in the offshore business. Despite these challenges, Siemens Energy continues to benefit from a favorable market environment.
According to a recent report by Reuters, Siemens Energy is considering shutting down Siemens Gamesa factories and sales offices as part of a review aimed at reducing losses at the wind turbine business. The review is aimed at providing long-term relief for Siemens Gamesa by outsourcing production of some key components, such as blades, in order to raise margins. The restructuring program could be unveiled in November, when Siemens Energy is scheduled to release annual results and hold a capital markets day. However, no final decisions have been taken yet and details of the restructuring program could still change.
How many employees will lose their jobs?
What will be the costs to shareholders?
What sites will be closed?
I am on the edge of my toilet seat waiting for the giant number 2 to be released in November.