Peter Loscher believes green technology is key to Siemens' future

As thousands of gallons of oil wash up on the shores of Louisiana this weekend, one man might be forgiven for thinking it's not all as bad as it seems.

By Jonathan Sibun
Published: 9:48PM BST 20 Jun 2010

Amid the hysteria of Amercia's worst environmental disaster on record, Siemens chief executive Peter Löscher will likely be looking at the longer game.

Löscher is far too guarded to say it, but green technology companies will be waiting with keen expectation to see the results of the Deepwater Horizon spill. As the backlash against big oil builds, there will be winners.

Siemens is already in Barack Obama's good books. The US President visited the German company's new wind turbine facility in Fort Madison, Iowa, in late April and gave employees the kind of Churchillian fillip that company bosses dream of.

"What the employees of Siemens are involved with is helping stake America's claim on a clean energy future," said Obama, praising "a generation [that] chose in a time of crisis to place its bet on the future. A generation that stepped forward to meet the challenges of our time."

The US, Obama claimed, could realistically dream of generating a fifth of its energy from wind by 2020. The prediction was music to Löscher's ears.

For many people in the UK, Siemens remains a foreign concept but the Munich headquartered company is Europe's biggest conglomerate and Löscher one of the most important figures in global industry.

The group employs more than 400,000 people in 190 countries. It generated annual revenues of €77bn (£64bn) in 2009, operates across the fields of healthcare, energy and industry and either runs or has developed anything from the Heathrow Express to London's congestion charging zone.

As we meet in the environmentally-minded offices of Siemens' UK headquarters in Frimley, Surrey, Löscher cannot match Obama's rhetoric but the 52-year-old Austrian is glad to take up the US president's theme.

Löscher is in the UK to talk about Siemens' £30m environmental "pavilion" project in east London and the company's plans to spend £80m on an offshore wind turbine factory on the east coast of Britain.

The pavilion is all about showcasing sustainable urban infrastructure technologies – a typically weighty term for redesigning cities on the back of green initiatives. The topic might be dry, but it's also among the biggest growth stories out there, Löscher claims.

"2007 was the first year when the majority of the global population was living in cities, consuming 75pc of the world's energy and accounting for 80pc of CO2 emissions," he says. "Between now and 2030 the world will need at least 50pc more power than is available today. That can't happen by just burning coal."

The barrage of data is typical of Löscher, little surprise perhaps given how important green technology is to Siemens. The company claims a "green" portfolio generating €23bn in sales and growing at double digit pace last year.

Löscher points out that Siemens spent €1bn on green research and development spending in the heart of the recession. The global downturn, it seems, is little more than a nuisance in the bigger picture.

"We can spend a lot of time talking about how we manage our way through the crisis but it's all rather benign and short-sighted compared to the real challenges that mankind is facing. What does an ageing global population mean as we move from 6.5bn to 9bn people?" he asks rhetorically.

The answer, he claims, is all about successful energy use, waste disposal, the development of efficient buildings and transport, water usage. The list goes on.

And the age of austerity is doing little to put him off his stride. Löscher seems relaxed about the potential impact of the financial crisis and government spending cuts in dampening investment in the technologies that will be necessary to cope with such demographic trends.

In the UK, the previous government's commitment to allocate £60m in port infrastructure grants to help develop wind farms offshore has been put under review by the Coalition.

Löscher and his UK chief executive, Andreas Goss, believe the review will do little to stem the tide or Siemens' wind turbine building plans. "Port infrastructure will be needed on the east coast somewhere. The review is only that, a review of spending. We feel it will still yield the right outcome," Goss says. "If you want to put thousands of turbines out at sea, you may want to have a port that makes that possible."

Löscher's positive outlook also comes from his confidence that the troubles facing Europe will produce fundamental change for the better.

"When you look back into the history of Europe, the biggest changes have always happened in conjunction with a crisis. I have no doubt that this crisis will again be seen as a moment when change for the better takes place," he says. "I am hopeful we will see further economic integration of the single European market. We have the tools in place but putting the growth and stability pact back at the centre of the agenda is important. This will be seen as a defining moment where Europe lived up to its responsibility."

He points out that the euro has had its ups and downs in the past and suggests that Greece is relatively immaterial in the wider scheme of things. "Greece has the GDP of one of the smaller federal states in Germany and as far as the euro is concerned, I can't relate to that debate either," he says. "We started the euro at 97 euro cents, it moved up but it also moved down to 83 and nobody was talking about the crisis of the euro. And from a competitiveness agenda, on a short-term basis [a falling currency] is sometimes helpful."

Löscher has been through enough crises in recent years to recognise a real challenge when it comes along. The first Siemens boss from outside the company in its 162-year history, the former General Electric and Merck executive joined in the wake of what must rank as one of the worst bribery scandals in corporate history.

Siemens was forced to pay a record $1.34bn (£906m) in fines for paying bribes and kickbacks to secure contracts worldwide. Investigations found 4,238 illegal payments amid a culture of "broad-based corruption".

Löscher was hired to clean the company up and he went about the task with impressive zeal, clearing out more than half of Siemens' top 100 executives and overhauling compliance standards.

Three years later it is a subject he wants to put in the past, saying only that it was "a difficult moment in the company's history" and that he has "fundamentally repositioned the company".

As chief executive of the new Siemens, Löscher is clearly keen to make sure he and the company are whiter than white. Holding eye contact with steely intent throughout our conversation and avoiding any comments that could be seen as even mildly controversial, Löscher cannot be accused of not taking his job seriously.

But given Siemens' improving corporate reputation and record operating results last year, isn't it time he relaxed a little? "I relax every weekend with my family. I relax in the Alps when I'm skiing," says the former Austrian ski instructor, before showing a flicker of passion, albeit of the objective teutonic variety. "I love to escape to lakes, mountains, the sea. This generates emotions."

If Siemens and other green technologists fail in their mission, relaxation might be in short supply in years to come.


Peter Löscher, chief executive, Siemens

Lives Munich, Germany

Family Spanish wife and three children

Hobbies Skiing

Career Kienbaum und Partner, Hoechst Group, Aventis Pharma, General Electric, Merck, Siemens