6,100 jobs go at Siemens power division as ‘market burns to the ground’
By Paul Homewood
We touched on this story a couple of weeks ago, and now it looks as if the job losses are real:
Siemens is to release two per cent of its global workforce, mainly in Germany, as its power and gas division continues to suffer from the onslaught of clean energy expansion.
6,100 jobs are to go before 2020 in the power division alone, with a further 800 in other departments. “The market is burning to the ground,” Siemens board member Janina Kugel who is in charge of group human resources, told journalists in a call following the announcement.
The company’s lucrative $9bn order for its Egyptian mega-project shielded the company from a much worse situation, as its traditionally strong gas-fired turbine manufacturing business continues to suffer in the shadow of renewable energy revolution.
“The power generation industry is experiencing disruption of unprecedented scope and speed,” Siemens management board member Lisa Davis said. “With their innovative strength and rapidly expanding generation capacity, renewables are putting other forms of power generation under increasing pressure,” she added.
Aside from loss-making wind power venture Siemens Gamesa, Process Industries and Drives was Siemens’s least profitable business last quarter, with a profit margin of just 2.9 percent.
Half of the expected job cuts will be made in Germany, and the timing couldn’t be worse for the country, with talks currently ongoing to form a new government. German Economy Minister Brigitte Zypries urged Siemens to treat employees fairly. “The workers are very concerned and uncertain about their future. I hope that Siemens works closely with the unions to find fair solutions for the affected sites.”
She said particularly sites in structurally weak regions should be preserved.
Both Siemens and rival GE are having to contend with overcapacity in the gas turbine market, where supply outstrips demand by a ratio of three to one, and prices have dropped 30 percent since 2014.
Demand for power plant-sized gas turbines has tumbled and is expected to bottom out at 110 turbines a year, compared with total global manufacturing capacity of around 400 turbines, Siemens said.
It is ironic that they should talk of the onslaught of clean energy expansion, only to mention the loss-making wind power venture Siemens Gamesa a few paragraphs later.
It is the subsidised nature of renewable energy which is causing problems for the gas turbine sector, and not the innovative strength of renewables, which Siemens board member Lisa Davis claims.
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NOT A LOT OF PEOPLE KNOW THAT 
Germany is under the cosh from numerous corners; internal politics, Brexit, high energy prices, shrinking turbine market, pressure from the US, and a faltering wind business. What else can go wrong before the penny drops that they are subsidising the whole country into the ground?
It might also be a really good time for the UK to buy some gas fired power stations whilst prices are bargain basement.
But then I don’t suppose that would ever occur to our all seeing government ministers and civil servants as they always pay top dollar for everything.
The UK power system is privatised so it’s not the government that buys power generation. Ironically some of the generating firms operating in the UK are themselves German e.g RWE, which does have plans for more gas power.
http://utilityweek.co.uk/news/rwe-plans-colossal-energy-centre-at-tilbury-b/1307862
It’s the consumers that buy electricity, but it is the government that sets the policy that determine what generators will be profitable and will get built and thus what consumers can buy and at what price. It is government policy to close coal-fired generation, to build an expensive white elephant at Hinkley and to subsidise non-dispatchable renewable energy generators. It is government policy that is driving up electricity prices and will cause blackouts.
As is evident every day, we are governed by idiots and have been governed by idiots for many years.
oldbrew
Phillip put it rather more robustly than I would but I agree with him. It’s government policy subsidising loony tunes renewables that’s largely responsible for pricing fossil fuels out the market. Typical socialist attitude to running anything, sell off public utilities to the highest bidder than legislate to distort the market to suit socialist government policy.
And whilst I detest socialism, there are three utilities I believe should stay nationalised, Water, Electricity and Gas. The problem is, of course, our successive governments have been raised on a diet of nationalised industries so the only things left for the half wits to bicker over are education, NHS and defence. Now energy has raised it’s ugly head, thanks to government incompetence, it’s a new battleground for them all to exercise their ego’s over.
Our priority should be to reduce the size of our government, not have them elbow deep in things they know nothing about.
To that end I will be renewing my membership with the UK Libertarian Party, albeit I don’t believe they have any meaningful representation, but the Conservative party is just an arm of the labour party with a different smile and no longer represents what I want from our government.
You forgot to mention the collapse of the German Solar Panel Production Companies, they have been wiped out by cheap Chinese Solar Panels, it used to be called “dumping” on the market, but they are now too polite to say such things about the Chinese export policies.
I would love to know what the “innovative strength of renewables” is. Without massive subsidies, renewables are inherently weak and no amount of innovation can get around the intermittency and low capacity factor of wind and solar.
I’m trying really hard to understand the quote above from on of the Board members:
How does that work then? Have found an innovative way for windmills to work when there is no wind; for solar farms to produce when there is no sun; and for any power they do produce to be despatchable?
Six days last summer in South Australia illustrate the current problems for conventional generators (and ultimately for consumers) in areas with high wind power. On the hottest day wind power dropped to only 50 MW at the time of peak demand, but a few days later there was a storm and wind power met all/most of the demand at times, kicking conventional baseload generators off the system. The “innovative strength” wind power demonstrated its intermittency problem at both ends, sometimes vanishing, sometimes destroying the economics of the proper power stations. Hardly surprising that there is a big drop in money going into conventional generators, a situation that will only be reversed when blackouts change the economics:
This announcement is another example of why our energy policy makers are so wrong in claiming the green economy is the way forward for more jobs etc and turning a blind eye (or just not seeing) the catastrophe looming in the conventional power economy – how long will it take them realise what is happening? Give me strength!
Yes, highly skilled jobs which produce 10 times as much power, being replaced by dozens of less skilled jobs.
The EXACT OPPOSITE of “efficiency”.
Good.
This will save real jobs.
Every fake green job destroys 2 real jobs.
This government, and the whole of the civil and public service, have absolutely NO idea of the meaning of efficiency. They think money grows on trees, in other words, the poor tax payer.
How could a real Conservative party have become so incredibly useless.
Hmmm. Perhaps they should be selling to Australia. https://stopthesethings.com/2017/11/21/green-premiers-red-faced-wind-power-fiasco-ends-in-dirty-diesel-debacle/
The story on the GWPF site is that the political crisis in Germany is caused by (firstly) the new Alt De party refusing to agree to Green party demands (if they were to join a coalition) that around 150 coal power stations be shut down. The new Alternative party is saying industry and the economy are more important and about bloody time! This coulkd be a real tipping point 🙂
The above story is not being covered by Sky/BBC/national press.
More reality hits the green economy. They are lying about the efficiency of wind and solar energy generation just like they are lying about so called Climate Change ….. usually called weather.
Paul, the BBC is up to its tricks again, today claiming that Solomon Islands are being drowned by rising sea levels, caused by … you know what:
http://www.bbc.co.uk/programmes/articles/2F01PbMdZ8nD1z1Pp66G2F0/stunning-images-of-a-drowning-nation
Quick googling reveals that volcanoes and tectonic activity is the most likely explanation for most of the drowning, something the BBC totally failed to mention. The presenter was a Marine Biologist (who has no right to pontificate about the causes of sea level changes), but maybe they covered themselves by interviewing a pet Aussie “Climate Scientist”.
Anybody up for a complaint? I’d love to get a grovelling apology like the one they did when Nigel Lawson was allowed to speak.
Reblogged this on Wolsten and commented:
I take no pleasure in anyone losing their job, but this is an inevitable consequence of an artificial market driven by subsidies.
Sadly, Siemens have a lot of power related companies in the UK and employ many UK citizens. Looking back at recent history where European companies have taken-over UK companies (paper, steel, cars… etc) the cut-backs are far cheaper to make in the UK than most of Europe, so guess where the pain will be felt! They will probably blame Brexit.
This will have inevitable consequences at the ballot box for Merkel; the price of her years in power with the backing of the Greens. I wonder which way Germany will turn?