- After talks with trade union IG Metall, global engineering firm Siemens AG has agreed not to sell off its healthcare unit. It will attempt to maintain majority ownership even if the unit is listed on the stock market.
- In early November, the company had taken steps to rid itself of the division, including the formation of subsidiaries in individual countries. But in a major switch, Siemens has agreed to keep its healthcare business as "part of its long-term, strategic core portfolio."
- As part of its agreement with the union, Siemens has agreed that the healthcare division corporate headquarters will remain in Germany and that it will maintain or expand its job base in healthcare in that country.
Siemens will still be selling its hearing-aid unit, Siemens Audiology Solutions, to private equity firm EQT and Germany's Struengmann family for $2.7 billion. But it appears that the company's more ambitious plans to unwind and sell off the entire healthcare division are kaput. The union apparently has enough muscle to force a change in Siemens' plans.
The question now becomes whether Siemens can maintain the level of investment necessary to make the healthcare division thrive. One of the reasons Siemens had planned to get out of the healthcare division, observers said, was that management feared it would take too much capital investment to maintain the division's high margins. Also, Siemens leaders were apparently reluctant to keep up the fight for market share with GE and Phillips in core areas of its healthcare product line. Nonetheless, you can't run an organization without workers, and it seems Siemens did what it had to do.