Siemens CEO booted in light of profit warnings

Siemens' board of directors is set to vote on the early exit of CEO Peter Loescher, four years before his contract expires.

454px-Peter_Loscher

Following poor financial results this year, Siemens has announced the departure of CEO and President Peter Loescher.

The German company said in a statement over the weekend that the supervisory board will both vote on the early departure of the CEO and elect a member of the managing board as President and CEO.

The meeting is due to take place on July 31.

Following the company's statement, German newspaper Sueddeutsche Zeitung reported that the CEO plans to fight for his job. Citing company sources, the publication says that Loescher is only willing to resign if Chairman Gerhard Cromme -- who originally hired Loescher -- also quits. In addition, Loescher hopes to scrape together the necessary two-thirds majority vote to prevent being fired, although the company sources said there was no hope of this succeeding.

Loescher became CEO of the company six years ago. However, original expectations of the CEO have arguably fallen short as poor global demand for Siemens products has resulted in falling exports from Germany; hitting the lowest rate in May since 2009. Profit margins have therefore taken a beating, with the company's latest financial warning hitting the markets on Thursday.

Last week, Siemens admitted that achieving an overall profit margin of 12 percent by 2014's fiscal year is unlikely. The firm said that this original aspiration, mentioned in Siemens' 2014 company program, is unlikely to be achieved due to "lower market expectations." However, cost-cutting exercises and portfolio optimization -- including the sale of the company's 50 percent stake in joint-venture Nokia Siemens Networks (NSN) to Nokia -- is on track.

Siemens' third-quarter results will be posted on August 1, 2013.

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