Siemens division in Zug to be restructured

For Matthias Rebellius, CEO of the Siemens-Building Technologies Division, these measures are unavoidable in order to secure the site in Zug in the long term. "The recent rise in the Swiss franc exchange rate has had a massive impact on our competitiveness, especially on production here at the site. Since a large part of our global value creation takes place in Switzerland, we are forced to act." However, the company intends to retain Zug as a global center of excellence.

The competitiveness of the Swiss location has deteriorated significantly in recent years due to the exchange rate, especially since the minimum euro exchange rate was abolished in January 2015. Although Siemens implemented several optimizations in production, such as the merger of the Volketswil and Zug sites more than a year ago, the recent rise in the Swiss franc exchange rate has led to a cost level that is no longer sustainable.

For Rebellius, it is therefore urgently necessary to increasingly relocate production to those regions where products and services are also sold, in order to be more independent of currency fluctuations and to take advantage of countries with lower labor costs. The aim, he says, is to manufacture in Zug only those products and components whose design and technology (e.g. fire protection systems) make high demands on production and for which proximity to the development location would offer an important advantage.

That is why the company intends to stick to its plans to build a new headquarters in Zug. "By 2018, we will move into a state-of-the-art development center and production building in addition to the new administration building," says Rebellius.

As the most important measure to optimize production, it is planned to relocate around 30% of the current manufacturing volume in Zug to other Siemens sites as well as to transfer it to external companies. This would better cushion currency risks and thus increase the stability of the value creation structures under the given economic conditions, according to the statement.

The plan is to start relocating the first production lines in January 2016 and to complete the measures by the end of 2016. The Zug production site will then still be of a size that ensures a competitive factory with a focus on the core competencies of electronics and electro-mechanics, with around 350 employees - compared with around 500 today.

The industrial company assumes that part of the planned personnel adjustments can be realized by reducing the number of temporary workers, natural fluctuation and early retirements. Unfortunately, however, it will not be possible to avoid layoffs. The company is in talks with the employee representatives (ANV) in order to make the reduction as socially acceptable as possible.