Siemens

• 1. Introduction

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  Roughly 320,000 people work for Siemens, the German company whose engineering reaches into trains, hospital scanners and factory control rooms. It is the largest engineering company in Europe, and its headquarters are split between Munich and Berlin. Its revenue for 2023 came to around 78 billion euros.

  That scale rests on a long and uneven history of invention, complicity and repair. How did one inventor's small enterprise grow into a sprawling conglomerate? What did the company do in wartime Germany, and what did it later pay for its misconduct? And why does it keep letting go of its own divisions, even the successful ones?

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• 2. Needles and Wires

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  On the 1st of October 1847, Werner von Siemens and Johann Georg Halske founded a telegraph business in Berlin. Their instrument did not depend on Morse code. A needle swung around to point at each letter in turn. The firm, trading as Telegraphen-Bauanstalt von Siemens & Halske, opened its first workshop on the 12th of October.

  In 1848 the young company built the first long-distance telegraph line in Europe. It ran about 500 km from Berlin to Frankfurt am Main. Family then carried the business abroad. In 1850 the founder's younger brother Carl Wilhelm, later Sir William Siemens, began representing the firm in London, and the agency became a branch office in 1858.

  Russia was the next great market. Through the 1850s the company worked on long-distance telegraph networks there. In 1855 another brother, Carl Heinrich von Siemens, took charge of a new branch in St Petersburg.

  The grandest project was finished in 1867. The Indo-European telegraph line stretched more than 11,000 km from London to Calcutta. In 1890 the founder retired and handed the business to his brother Carl and his sons Arnold and Wilhelm.

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• 3. Power, Light and Size

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  In 1867 Werner von Siemens described a dynamo that needed no permanent magnets. Ányos Jedlik and Charles Wheatstone independently arrived at a similar system. Siemens, however, became the first company to actually build such machines.

  The payoff came in 1881, when a Siemens alternator turned by a watermill powered the first electric street lighting in the world. The town was Godalming in the United Kingdom. The company went on to make electric trains and light bulbs.

  A sale in 1885 reached further than anyone then knew. George Westinghouse bought a Siemens generator, and with it he could begin experimenting with AC networks in Pittsburgh, Pennsylvania. Markets kept widening. A first office opened in Japan in 1887. In 1892 Siemens won the contract for the Hobart electric tramway in Tasmania, which opened in 1893 as the first complete electric tram network in the Southern Hemisphere.

  By the start of the twentieth century the structure was changing. Siemens & Halske was incorporated in 1897. In 1903 it merged parts of its activities with Schuckert & Co. of Nuremberg to form Siemens-Schuckert. By 1907 the group employed 34,324 people, which made it the seventh-largest company in the German empire by headcount.

  In 1919 Siemens & Halske and two other companies jointly created the Osram lightbulb company. The 1920s and 1930s added radios, television sets and electron microscopes. During the 1920s the company also built the Ardnacrusha hydro power station on the River Shannon in the then Irish Free State, a world first for its design. Siemens is remembered there for wanting to raise the pay of its underpaid workers, only to be overruled by the Cumann na nGaedheal government.

  In 1932 Reiniger, Gebbert & Schall of Erlangen, Phönix AG of Rudolstadt and Siemens-Reiniger-Veifa mbH of Berlin merged into Siemens-Reiniger-Werke. It was the third of the parent companies that would join in 1966 to form today's Siemens AG.

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• 4. The Camp Factories

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  In 1972 Siemens took the German satirist F.C. Delius to court over Unsere Siemens-Welt, his satirical history of the company. The court found that much of the book contained false claims. Yet the trial itself pulled the company's record under the Nazi regime into public view.

  That record is grim. Siemens, then trading as Siemens-Schuckert, used the forced labour of deported people held in extermination camps, and it owned a plant at the Auschwitz concentration camp. Women deported to Ravensbrück were made to work in a Siemens factory that stood right in front of that camp. The company also supplied electrical parts to concentration camps and death camps.

  Conditions inside these factories were poor, and malnutrition and death were common. Scholarship has shown that the SS created, ran and supplied the camp factories in conjunction with company officials, sometimes at a high level.

  The war also hit Siemens from the air. Allied raids in its last years destroyed numerous plants in Berlin and other major cities. To protect output of war-related and everyday goods, production was scattered to regions the raids had not reached. Records show that at the end of 1944 and in early 1945 the company was running almost 400 alternative or relocated manufacturing plants.

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• 5. Rebuilding in Bavaria

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  From a new base in Bavaria in the 1950s, Siemens & Halske began making computers, semiconductor devices, washing machines and pacemakers. In 1969 the company pooled its nuclear power business with that of AEG to form Kraftwerk Union. It took that unit back in 1987.

  A stake in an American chipmaker came in 1977. Advanced Micro Devices entered a joint venture with Siemens, which wanted both technical expertise and a way into the American market. Siemens bought 20% of AMD's stock, giving AMD fresh cash to widen its product lines. The two also set up Advanced Micro Computers in Silicon Valley and Germany. Their visions diverged, and AMD bought out Siemens's share of the American division in 1979. AMD closed the venture in late 1981, after shifting to second-source Intel x86 processors.

  The company's first digital telephone exchange was produced in 1980. In 1988 Siemens and GEC acquired the British defence and technology company Plessey, and Siemens took the avionics, radar and traffic control businesses. It sold the defence arm to British Aerospace and DaimlerChrysler Aerospace in 1997.

  Buying continued through the early 1990s. In 1991 Siemens acquired Nixdorf Computer to make personal computers, and in October that year it bought the Industrial Systems Division of Texas Instruments. In 1992 it bought out IBM's half of ROLM, five years after buying into it.

  The next decade brought bolder moves. Early in 2003 the company announced annual Xelibri fashion phones, to be launched as spring-summer and autumn-winter collections like clothing. It also set a goal of 10 per cent of the mainland China handset market. In 2004 it acquired Bonus Energy of Brande, Denmark, forming Siemens Wind Power. In 2005 it sold its mobile manufacturing business to BenQ.

  The biggest purchase of the era came in 1998. Siemens paid more than $1.5 billion to CBS Corporation for Westinghouse Power Generation, which lifted it from third to second place in the world power generation market. The Westinghouse name had last crossed its path with the sale of that 1885 generator.

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• 6. The Bribery Reckoning

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  The Greek Olympics of 2004 gave the scandal its most vivid episode. Beginning in 2005, Siemens was accused of striking deals with Greek government officials around those Games. Prosecutors in Italy, Liechtenstein and Switzerland set off investigations in Germany, and an American investigation followed in 2006 because the company was listed on US stock exchanges.

  Investigators found a pattern of paying officials to win contracts. The company spent about $1.3 billion on bribes across several countries and kept separate accounting records to hide them. A mid-level telecommunications executive, Reinhard Siekaczek, supplied critical evidence. He said he had managed an annual global bribery budget of $40 to $50 million, and he described 2,700 worldwide contractors who were typically used to channel money to officials. Large payments were tied to contracts in Argentina, Israel, Venezuela, China, Nigeria and Russia.

  In December 2008 Siemens settled with the United States and Germany for a combined total of about $1.6 billion, then the largest bribery fine in history. It also had to invest $1 billion in new internal compliance. The US portion included $450 million in fines and penalties and a $350 million forfeiture of profits. Siemens admitted violating the accounting provisions of the Foreign Corrupt Practices Act, and its Bangladesh and Venezuela subsidiaries pleaded guilty to paying bribes.

  The bill was expected to be much higher, perhaps as much as $5 billion. Siemens's cooperation helped, as did the coming change of US administration and the firm's role as a US military contractor.

  The habit was old. In 1914 Siemens and Vickers were both caught up in a scandal over bribes paid to Japanese naval authorities. After World War II the company turned to bribery again as it pushed into the developing world. Until 1999 such payments were a tax-deductible business expense in Germany, with no penalty for bribing foreign officials. When the OECD Anti-Bribery Convention arrived that year, Siemens started hiding the money in off-shore accounts.

  Reform followed. Peter Y. Solmssen, a US lawyer, became an independent director in charge of compliance, and Theo Waigel, a former German finance minister, agreed to oversee the effort. The company wrote an anti-corruption handbook, built online due diligence tools, opened a confidential channel for employees and formed a corporate disciplinary committee. It hired about 500 full-time compliance staff worldwide.

  The legal aftershocks ran for years. A Munich court found in October 2007 that the company had bribed public officials in Libya, Russia and Nigeria, among them four former Nigerian Ministers of Communications. Siemens admitted it and agreed to pay 201 million euros, and Nigeria cancelled a contract that December. Two former executives were convicted that year for bribing the Italian energy company Enel. In 2009 Siemens agreed to stay away from World Bank projects for two years and to fund a $100 million anti-corruption effort over 15 years, called the Siemens Integrity Initiative. Nigeria received ₦7 billion in 2010, Greece settled for 330 million euros in 2012, and Israel imposed a US$42.7 million penalty in 2014. Also in 2014, former executive Andres Truppel pleaded guilty to channeling nearly $100 million in bribes to Argentine government officials.

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• 7. Cartels and Contested Contracts

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  In January 2007 the European Commission fined Siemens 396 million euros for price fixing in electricity markets. Eleven companies were in the cartel, including ABB, Alstom, Hitachi, Mitsubishi Electric, Schneider and Toshiba. According to the Commission, "between 1988 and 2004, the companies rigged bids for procurement contracts, fixed prices, allocated projects to each other, shared markets and exchanged commercially important and confidential information." Siemens drew the heaviest fine, more than half the total, for its alleged leadership role.

  March 2007 brought a different shock. A Siemens board member was temporarily arrested and accused of illegally financing AUB, a business-friendly labour association that competes with the trade union IG Metall. He was released on bail, offices of AUB and Siemens were searched, and Siemens denied any wrongdoing.

  In June 2009 news broke that Nokia Siemens had supplied the Iranian telecom company with equipment able to intercept and monitor communications, a facility called "lawful intercept". The equipment was believed to have been used against protesters after the 2009 Iranian election. The European Parliament was among the critics. Nokia Siemens later sold its call monitoring business and scaled back its work in Iran.

  Other contracts drew protest. In 2019 and 2020 Siemens was named as a key engineering company supporting the controversial Adani Carmichael coal mine in Queensland, Australia. In October 2022 the Boycott, Divestment and Sanctions movement targeted the company over its contract for the EuroAsia Interconnector, a planned power link joining the grids of Greece and Cyprus with Israel and with settlements in the West Bank.

  Sometimes Siemens was the victim. In November 2017 the US Department of Justice charged three employees of Guangzhou Bo Yu Information Technology Company with hacking into corporate entities, Siemens among them.

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• 8. Shedding and Software

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  In September 2011, Siemens announced that it would leave the nuclear sector. It had built all 17 of Germany's existing nuclear power plants, and the Fukushima disaster had reshaped German energy policy. Chief executive Peter Löscher backed the government's Energiewende, calling it a "project of the century" and saying its target of 35% renewable energy by 2020 was feasible.

  That exit fit a wider habit. The company pursues a strategy it calls Corporate Clarity, selling off non-core businesses. Deutsche Grammophon and Polydor Records went in 1987, semiconductors became Infineon Technologies in 1999, and Gigaset Communications followed in 2008. Osram left in 2013, and Siemens Healthineers was spun off in 2017. In 2020 the energy division became Siemens Energy, in which Siemens still held 17.1% as of December 2023. In August 2013, Nokia bought out Nokia Siemens Networks, ending Siemens's role in telecommunications.

  In May 2022 Siemens decided to leave Russia after 170 years, cutting ties with the Russian government over the war against Ukraine. The decision affected about 3,000 employees, and the company reported a second-quarter loss of approximately US$625 million tied to sanctions.

  The company that remains is built around software. Roland Busch replaced Joe Kaeser as chief executive in February 2021, and in 2023 he announced a long-term aim of raising software to 20% of sales. In June 2023 Siemens launched Siemens Xcelerator, an open digital platform sold by subscription. In October 2023 it launched the Siemens Industrial Copilot with Microsoft, a generative AI assistant built into its industrial software. Siemens also reports being the global market leader in industrial automation and industrial software.

  The spending matches the ambition. In March 2025 Siemens completed its largest transaction to date, buying Altair Engineering for approximately US$10 billion. In July 2025 it bought Dotmatics, a life sciences research software provider, for $5.1 billion. In 2023 it spent €6.1 billion on research and development. As of the 30th of September 2022 it had approximately 46,900 employees engaged in research and development and held approximately 43,600 patents worldwide.

  For all this change, the founding family has not vanished from the share register. The Siemens family, with 6.9%, is still the largest single shareholder.

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