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Will Siemens pull out from Fujitsu JV?

Posted: 15 Jul 2008 ?? ?Print Version ?Bookmark and Share

Keywords:computer JV? joint venture? job cut?

Siemens AG is reportedly in talks with Fujitsu Ltd over the future of their computer production joint venture Fujitsu Siemens Computers (FSC).

According to media releases, several insiders have told the Reuters that Siemens is preparing to cancel the contract with Fujitsu. The contract between the two partners will automatically be renewed for another five years in fall 2009if not canceled within the next few months.

Reports claim that Siemens executives have already traveled to Japan to negotiate with Fujitsu over a termination of the JV. According to the agreement, both parties have to offer its respective share of the joint venture first to the other partner before it can be sold. It is highly unlikely that Fujitsu is interested in taking Siemens' 50 percent share, reports Financial Times Deutschland. It is equally unlikely that Siemens alone will continue FSC's activities.

Now the future of the computer manufacturerwith 10,500 employeesis unclear. Parent company Siemens recently had announced to cut almost 17,000 jobs.

In recent years, FSC constantly lost market share in an environment characterized by fierce price competition. Siemens CEO Peter Loescher repeatedly has criticized the weak performance of the business unit. Against the background of the weak dollar, which makes imported computers cheaper, it became increasingly difficult for FSC to sell its products. The company has production sites in Augsburg and S?mmerda as well as R&D and sales activities in Munich.

When Siemens joined forces with Fujitsu in 1999, it contributed the hardware business of its subsidiary Siemens Nixdorf Computer into the activities. Later, the company also took over Siemens' IT service business.

- Christoph Hammerschmidt
EE Times Europe

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