Monday, October 2, 2006
Siemens said it will defer an executive pay hike and contribute the proceeds to a 35 million euro ($44.3 million) fund to help employees of its former cell phone business.
The German electronics and engineering conglomerate ceded its unprofitable handset business to Taiwan's BenQ Corp. a year ago as part of a restructuring drive under Chief Executive Klaus Kleinfeld.
However, BenQ unexpectedly pulled the plug last week, saying it could not afford to pump more capital into the business because there was only "a very slim chance" of turning it around. The unit filed for insolvency protection on Friday.
In a statement, Siemens confirmed a report in the Bild newspaper that its executives agreed to push back for one year a planned 30 percent pay rise which has drawn allegations of greed.
"We have a new situation now, and we want to signal our solidarity with the people" who could lose their jobs, Kleinfeld was quoted as telling Bild. "If BenQ abandons the work force, we want to help them actively and quickly."
The estimated 5 million ($6.3 million) saved will flow into the fund to pay for training to help the 3,000 employees of Siemens' former cell phone unit find new jobs, Siemens said.
Kleinfeld said at the time of the takeover that he had found a "sustainable" solution for the unit, now called BenQ Mobile. Staff accepted sharp wage cuts and BenQ forecast at the time that the unit could break even in 2006.
By: DocMemory
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