Siemens at Risk

Those who thought that supervisory board chairman Heinrich von Pierer would be the last to go in connection with the Siemens corruption scandal have been proven wrong: Chief executive Klaus Kleinfeld will give up his post, too. And he's unlikely to be the last sacrifice in the executive suite. Siemens managerial board members are facing federal prosecutors; one active member spent time in police custody as did a former board member. In an open power struggle, the supervisory board refused to extend Kleinfeld's contract. Kleinfeld had no choice but to announce his voluntary resignation. Thus, he avoided getting fired.

The fate of top professionals at this globally active company is not the issue. The issue is Siemens itself. The way the crisis has been managed is just as scandalous as the actual events that caused it. Up to 400 million euros ($540 million) -- a gigantic sum -- were embezzled for bribes to win massive contracts in countries prone to corruption. Investigators are feverishly searching for proof of corruption, for the perpetrators and for those responsible.

So far, no one believes that long-time CEO von Pierer or his successor, Kleinfeld, was personally involved in the scandal or even that they were aware of the bribes. But they are nevertheless not free of responsibility.

How could millions and millions disappear into shady channels without the boss knowing anything about it? If that was the case, then there was a lack of control and control mechanisms. Perhaps the company's executives didn't look too closely, because then an otherwise prevalent practice that led so nicely to large contracts wouldn't have worked anymore?

That's just a suspicion. But it's enough.

On top of it all comes a scandal within a scandal: Siemens violated German law by putting millions of euros into the foundation of an employer-friendly organization to represent workers which was meant to undermine the trade union. Divide and conquer was the strategy.

It's true that without a thorough clean-up at the top, Siemens won't be able to make a credible new start. However, the employers' representatives in the supervisory board behaved extremely unprofessionally, causing the company further damage. With nearly 500,000 employees, plants, joint ventures and offices in practically every country in the world, Siemens is one of the biggest global companies -- and now it has no leadership. The concern is desperately searching for a new CEO. That provides an ideal opportunity for carpetbaggers who long ago first suggested breaking up the company and selling off its individual parts.

Karl Zawadsky is a business editor at DW-RADIO (ncy).