Thirty
two percent of the world market is based here in the U.S., so it obviously is
the biggest market that exists for us, and it will take quite a while to be overtaken
by China, and I'll talk about it a little bit later. It has superseded Germany
which was once our most important region. We have sales of roughly $21.4 billon
here, that's about twenty percent of our total $107 billion sales that we have
worldwide. If
Siemens US were a separate company, we would still be a Fortune 100 company, and
I think that shows not only the size of Siemens but it shows also the big achievement
of Siemens in the U.S. We employ more than 70,000 people here in the U.S. and
that number is certainly growing. Worldwide
we have more than 480,000 global employees. Numbers
Only Part of Story But
frankly that's one side of the story, it doesn't give you a full feel of how important
this region is for us. I mean the way we have structured our organization is not
that we look at the country just as a market. We look at a country as a full resource
idea. I mean our company was founded roughly a 160 years ago, and it was founded
as an international company, and today we have roughly 70 business fields. Ten
of those 70 business units are headquarterd and run out of the U.S. Customers
are here and that's another very, very important point. We are in quite a number
of business fields where innovative and the most entrepreneurial customers are
located. We need to partner with them, because they are the ones that give us
opportunity to work in the forefront, and literally not just to set the trend,
set it together with our customers, but use them to strengthen the U.S. market
to have a global role.
Investments This
also requires investment, and look at our investment pattern. I mean R & D is
obviously something very, very important. We invested last year $1.2 billion in
the U.S. alone out of our roughly $6 billion total R & D investment. We have seven
thousand researchers located here in the U.S., out of our roughly fifty thousand
research and developers worldwide. In terms of patents, we have 12,000 patents
in the U.S. and 62,000 worldwide. We have spent over the last years more then
ten billion dollars in acquisition activities. Energy
One of
the strong businesses is environmental and energy. I mean the future and probably
already today's power generation needs to be clean power. Wheelabrator
was acquired for its pollution control systems for fossil fuel plants, guaranteeing
cleaner energy production. There is a 66 percent increase in orders in its first
full year with us. We
have become in the last year one of the largest wind companies. Our Fort Madison,
Iowa factory just produced its first blades for wind turbines three weeks ago
will full capacity expected by August. I have to tell you, in case you want to
order, we are booked out worldwide. U.S.
Filter is another great example of an environmentally friendly waste water services
company we acquired as well. Infrastructure
Another
growth area is industrial automation, industrial infrastructures. We bought Robicon,
which opens a whole new market segment here in the U.S. One of the largest acquisitions
and the most recent one, UGS is a company that is very strong in digital computer-aided
manufacturing system, and product lifecycle management systems. They
grow the design products for the CDC system that tested out in a computer-aided
manufacturing environment. We are a leader in real automation, in real manufacturing
automation. Healthcare
Healthcare is
another great growth area for us. You see that we built up this business pretty
much here investing in the U.S. We bought Shared Medical in Pennsylvania in 2000
and is a market leader in IT?systems for hospitals and healthcare. In 2005, we
fully acquired CTI. And last year we bought Diagnostic Product Corporation and
Bayer Diagnostics. So with that we have been creating the first integrated healthcare,
global medical diagnostic company. Historically
European firms have been accounting for 70 percent of the foreign direct investment,
which is pretty amazing. About one third of this is actually in manufacturing
industries, and you then look at the numbers, you'd say that foreign companies
employ 5.1 million Americans. So in a way it shows that what I have personally
experienced here, and have valued from the first moment on together with my family
is this great immigrant spirit that the country has, and has really all kinds
of shapes and forms. And I think this spirit is also showing that the country
is open, not only for investment from the outside but also for business and for
companies that want to play here in this marketplace. And certainly I mean the
size of the whole market also matters for many and its 13 trillion U.S. economy
and it will be in 2020, 19 trillion. Education
What
also I think couldn't be valued high enough is the robust and excellent educational
system. A lot of great skilled professionals are produced here, every day, and
frankly I think what you might not value enough in my view is that those schools
are bringing you… are really attracting the best and the brightest from all around
the world. And they like it so much that they won't ever want to leave. It's very,
very important to keep the machine going, and I think it's getting to be more
important in the future. There
are five hundred courses on entrepreneurship and business in the top universities.
And another pretty interesting aspect also on entrepreneurship is this great idea
of investors, and I don't just mean to talk about Silicon Valley or a Route 128,
I mean there are many examples of areas where this has been to a really stable
customer structure. The
risk capital market is a strong market. Venture capital companies account for
about 1.8 trillion of the 13 trillion U.S. economy. U.S.
filed 34 percent of all patents in the world in 2006, Japan is far behind at the
number two spot with 18 percent, and Germany is in third place with 12 percent.
It only takes five days to create a business here, it takes 24 in Germany and
35 in China, if ever. Kleinfeld
addressed the National Chamber Foundation at the U.S. Chamber of Commerce April
18th on "Investing and Competing in the U.S.--Perspectives of a Global Company." BRIC
One thing that
I see here is certainly that there are competitors, new nations coming on the
market. Goldman Sachs coined "BRIC countries--Brazil, Russia, India and China.
In 2005, BRIC received 15 percent of global foreign value investment and contributed
28 percent of global growth between 2000 and 2005. The number one competitor here
is China. Frankly, I
can remember the early days of 2002. I went to some of the rooms here in Congress
and the Senate, and I started to talk about China, and the people looked at me
and were rolling their eyes, and said why is this man talking about China? This
has changed massively is my impression. I?think everybody now in here understands
what is going on there. But what is really going on there? By the year 2020, China
will become the second largest economy, and 2050 predictions I have seen , China
will be the largest economy worldwide.
I unfortunately sometimes see people saying well it is kind of a distribution
of labor, this will be the manufacturing home of the world. Frankly, I think that
people who think that way are flat out wrong. That is not the way things are working,
and that is not the way things are working today, because in reality there is
something much bigger that is happening there. I saw that, we are in China for
over 100 years, and we have about 40,000 people working there, and also all our
metrics are there and we saw points in all angles of the business we are now going
to the second generation. There
is an ongoing debate about the numbers, but Duke University came out with a study
and said China will graduate twice as many four year engineers as the the U.S.
which is 350,000 compared to 137,000. China
launched their inevitable five year plan that calls for innovation in the high
technology areas: satellites, energy, bio-medicine, computer networks and we're
in the second year already. I didn't give the story about India, Russia or Brazil,
so let's turn now back to the U.S. How can we stay attractive to foreign investment?
Look at the numbers--last year Europe had 350 IPOs versus 235 IPOs in the U.S.
On the top of
this you see stricter regulation of foreign acquisitions of U.S. companies. I
was in Dubai, and it was very interesting to see the reaction there, they smelled
already that something different had come up, but it was even more interesting
to see the reaction from foreign companies invested here in the U.S. I think it
is also going to the core of, hey, I mean what do we do here? I mean do we keep
certain people out? I think we must really differentiate between those investments
that truly effect U.S. national security and those that add strength to the U.S.
economy. Immigration
And then we
come to a very, very strong sweet spot, tougher immigration laws. Most important
in my view is to continue to contribute to attract investment buyers. I think
America needs to keep the immigrant spirit and this culture, because it is essential,
always was, and it always will be for the well being of this nation. In the core
of this is entrepreneurship, but the core of it is that in the essence is superiority
of the U.S. model. And then there are a couple of things that one can't do much
about it. Which one just has to manage. I mean the demographic, 77 million baby-boomers
essentially retire in the coming years. That's on the one hand going to be an
interesting thing about healthcare, but on the other hand, I mean we also see
a large amount of knowledge that currently is active in the economy. I mean it
has the risk kind of not being productive use of the economy. And the big question
is, I mean in this day and age where people have average life expectancy of over
80, is that the right model? Is that also the right lifestyle model some would
say? Or we need to take steps on that. So…
and before I come to a close, obviously I wouldn't want to leave this podium before
addressing our zero tolerance policy. As you know, Siemens has been in the headlines
recently for compliance problems. We have ZERO TOLERANCE for illegal behavior
at Siemens. That is why we assembled a First Class team of compliance experts
to get to the bottom of the issue. I'd like to emphasize we turned to the U.S.
for much of this expertise: --Independent law firm: Debevoise & Plimpton;
Deloitte --Anti-corruption adviser: Michael Hershman --Company
law firm: Davis Polk --Ombudsman: Hans-Otto Jordan --Compliance Officer:
Daniel Noe. Our
clear goal is within three to five years to become the role model of transparency.
Klaus Kleinfeld
assumed the position of president and chief executive officer of Siemens AG on
January 27, 2005. Kleinfeld is the 11th company head in Siemens' 160 year history.
Immediately prior to being named CEO, he was a member of the corporate executive
committee since January 2004, and had special responsibility for the groups in
Siemens' information and communications business area and regional companies in
Africa, the Middle East, and the Commonwealth of Independent States.
Kleinfeld began his career with Siemens in 1987 in the corporate sales and marketing
group, moving a year later to Siemens corporate planning and strategy. From 2002
to 2003, he led the company's U.S.A. region as president and chief executive officer,
leading the 65,000 employees in the nearly $17 billion U.S. company, with business
in healthcare technology and information management, power generation and transmission,
automation and controls, lighting, information and communications technology,
transportation, and building technologies. Before stepping into his role as CEO
of Siemens AG, Kleinfeld established and led the Siemens Management Consulting
Group (SMC), an organization formed to develop and oversee a corporate revitalization
and business improvement program. Under his leadership, SMC transformed from a
small corporate cost center to a highly profitable and respected consulting business
that established cutting-edge practices in benchmarking, business re-engineering,
and innovation. |