The supervisory board of Siemens will seal the fate of Chief Executive Peter Loescher on Wednesday when it votes for his early dismissal in one of Germany's most dramatic boardroom battles in years.
The board meeting comes after Siemens last week issued its second profit warning this year, adding to signs that Loescher was struggling to turn around one of Germany's biggest engineering conglomerates.
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Loescher had in the past promised that the company, whose products range from gas turbines to fast trains and ultrasound machines, would grow faster than rivals such as ABB , General Electric and Philips .
But bungled acquisitions, charges for project delays and a focus on sales growth caused Siemens to fall behind.
Last week, Siemens rattled shareholders by abruptly abandoning its target of boosting its core operating profit margin to at least 12 percent from 9.5 percent by 2014.
That turned out to be the straw that broke the camel's back. A majority sided against Loescher in emergency meetings of supervisory board members over the weekend, prompting Siemens to issue a tersely worded statement saying that the board would decide at its meeting on Wednesday on Loescher's early departure.
A newspaper cited sources on Monday as saying Loescher was not yet prepared to give up and would fight for his job or else drag supervisory board chairman Gerhard Cromme, who hired him six years ago, down with him.
A spokesman for Siemens denied at the time that Loescher wants Cromme to leave as well, while Loescher did not comment.
The most likely candidate to replace Loescher is finance chief Joe Kaeser, a Siemens veteran who was already on the management board when Loescher joined.
Having earned a reputation as a hands-on pragmatist during his 33 years with the company, Kaeser is seen as having an understanding of Siemens' business and culture that Loescher, an Austrian who was brought in as an external candidate, has always been felt to lack.
Analysts said Kaeser should be well-placed to gradually get Siemens back on track by tightening project control, by selling off more non-core businesses, such as those that make rail technology or healthcare software, and by setting more conservative and realistic targets.
(Reporting by Maria Sheahan; Editing by Giles Elgood)